NSW Government Announces Ambitious Cashless Gambling Machine Reform

A retiree plays electronic poker machines at the Randwick Labor Club in Sydney, Australia, on Dec. 21, 2012. William West/AFP via Getty Images

The New South Wales (NSW) government has unveiled an ambitious plan to turn all poker machines in the state cashless by 2028 as it seeks to stamp down on money laundering and reduce the negative impact of gambling.

NSW Premier Dominic Perrottet said it was the largest social, community and law enforcement reform in the Australian state’s history.

Under the new policy, gambling machines in all revenues in the state will be mandated to go cashless by Dec. 31, 2028, with 2,000 devices to be converted first in 2023.

In addition, any new cash-enabled machine purchased from July 2023 is required to have a $500 (US$347) feed-in limit.

The plan also introduced an optional buy-back scheme for 2,000 poker machines over a five-year period.

Premier Dominic Perrottet at a media conference at NSW State Parliament in Sydney, Australia, on Oct. 21, 2021. Brook Mitchell/Getty Images

While players will be required to use a single bank account for gambling purposes and set their own limits that cannot be increased for seven days.

Credit and automatic top-ups will be banned, and players can only draw gambling funds from their bank accounts.

Notably, the reform will introduce mandatory breaks and allow family members to request problem gamblers be prohibited from playing.

“It will save lives. It will protect jobs and ensure that our communities across NSW are stronger now and into the future,” Perrottet said while criticising the previous Labor government for allegedly turning pubs and clubs across the state into mini-casinos.

“That transition will be difficult, but I’ve committed completely to the industry that I'll work very closely to get that done.

“A sign of any great society is how it looks after its most vulnerable people.”

Support for Pubs, Clubs and Affected Groups

The NSW government introduced a number of support measures for pubs, clubs and community groups impacted by the changes to facilitate the transition to cashless gambling.

Specifically, it will provide interest-free loans to help small and medium-sized pubs and clubs cover the total cost of transition.

They will also receive a one-off diversification grant of $50,000 to invest in new income streams such as live music, food and bowling greens.

For clubs and pubs that sponsor community groups such as junior sporting teams or other similar organisations, the government will provide a community grant to help them pay for the full cost of all non-tax deductible donations made each year until 2028.

While large poker machine operators will be excluded from the grant scheme, they can join the state’s optional buy-back program.

A general view taken inside a gaming venue with poker machines in Melbourne, Australia, on April 13, 2011. William West/AFP via Getty Images

To carry out the transition plan, the NSW government will set up a task force made up of gambling regulators, police, the privacy commissioner and industry representatives.

The task force will help provide guidance, establish a roadmap and monitor the rollout of the transition, with a status update every six months.

While the NSW government did not mention any price tag in the announcement, it was estimated that the plan would cost NSW taxpayers around $344 million (US$237 million).

The reform announcement comes following an October 2022 report by the NSW Crime Commission, which indicated that billions of dollars of “dirty cash”–mainly proceeds from drug dealings–were flowing through the state’s poker machines every year.

“Today, we fix money laundering, we fix problem gambling, and we support pubs and clubs,” Perrottet said.

Response from Relevant Parties

The NSW Crime Commission welcomed the government’s reform as it took into account all eight recommendations the agency proposed in the October report and targeted a major legal loophole allowing criminals to gamble in cash.

“Drug dealers don’t bank their money because they are then exposed to law enforcement seizing it,” Commissioner Michael Barnes said.

Tim Costello, a well-known community leader and the chief advocate of the Alliance for Gambling Reform, said while the government’s reform was not perfect, it was pretty good.

“(Setting a limit helps) people who lose all track of time when they’re in front of pokies with their psychologically addictive features,” he said in comments obtained by AAP.

He also noted that the package was the most significant social reform he had seen in his 25 years advocating for changes in the gambling industry.

However, he regretted that the compensation package did not provide any support for the 44 percent of pubs and 20 percent of clubs that did not involve with poker machines.

Meanwhile, ClubsNSW, a peak body representing 1,200 clubs across the state, expressed concerns about the cost and technical challenges of converting poker machines into cashless.

“We’re particularly concerned about the implications for small, regional clubs and the impact this will have on jobs across the industry,” the peak body said.

Nevertheless, ClubsNSW said it remained committed to dealing with disruptive gambling behaviour and keeping criminals out of venues.