Co-authored by Jack Croake
The sporting landscape in Australia
The landscape of Australian sport has experienced a successful period in the wake of the challenging COVID-19 pandemic, spurred on by a series of record broadcasting deals fuelled by increasing viewership for both domestic and international sporting events. A contributing factor to this economic success has been the opportunity to showcase sport in Australia on the world stage, as Australia played host for the 2023 FIFA Women’s World Cup, the 2022 ICC Men’s T20 World Cup and the 2022 FIBA Women’s Basketball World Cup. There will continue to be a focus on Australian sport throughout the next decade, as athletes and spectators turn their attention toward international spectacles including the 2025/26 Ashes Series, the 2027 Men’s and 2029 Women’s Rugby World Cups, and the 2032 Brisbane Olympics.
With this increased attention to sport in Australia, it is an appropriate time to examine the regulatory frameworks in place to reduce the likelihood of money laundering and match-fixing and consider whether the strengthening of these is necessary to ensure a fairer sporting landscape in Australia.
Anti-money laundering
How is AML regulated in Australian sport?
All businesses which are ‘reporting entities’ such as banks, payment remitters and betting agencies must comply with anti-money laundering and counter-terrorism financing (AML/CTF) requirements set out under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) (AML/CTF Act).1 Similarly, the Criminal Code Act 1995 (Cth) (Criminal Code) also recognises money laundering as a criminal offence.2
However, these provisions were not designed with the intention of capturing sporting organisations as reporting entities, and as such, many sporting organisations are not required under the AML/CTF Act to report their dealings with the Australian Transaction Reports and Analysis Centre (AUSTRAC).
What are the implications of money laundering in sport?
The European Union has recently agreed new AML requirements targeting major football (soccer) clubs and associated payments.3 Whilst sport in Australia does not generate the same level of revenue or attract the same amount of foreign investment as European football (the combined revenue of English Premier League clubs alone reportedly exceeded £6 billion in the 2022/2023 season), the domestic and global reach of sport in Australia, as well as the potential for further growth means that it is imperative that the appropriate regulatory framework is put in place to protect the integrity of Australian sport.
What changes are required to safeguard sport from money laundering?
In February 2024, the European Parliament concluded the Sixth Anti-Money Laundering Directive (6-AMLD) which included rules to mandate professional football (soccer) clubs to verify customer identity, monitor transactions and report suspicious activities to Financial Intelligence Units in the European Union Member States. These rules would only come into effect after a longer transition period of five years, when compared to other requirements of the 6-AMLD, to allow clubs additional time to comply. European Union Member States will also have flexibility for football clubs below the top league and for those with an annual turnover of less than €5 million over two years.
The rationale stated by the Council of the European Union was: “The activities of professional football clubs and football agents are exposed to risks of money laundering and its predicate offences due to several factors inherent to the football sector, such as the global popularity of football, the considerable sums, cash flows and large financial interests involved, cross-border transactions, and sometimes opaque ownership structures. All these factors expose football to possible abuse by criminals to legitimise illicit funds and thus make the sport vulnerable to money laundering and its predicate offences.”4
While the Australian sporting environment is not as susceptible to money laundering based on the smaller financial inflows and comparative size of the sporting market, given the growing commercialisation of sport and especially those like cricket which reach a larger audience, putting in place preventive measures would be timely. There are several ways in which the Australian AML/CTF framework could be amended based on the precedent set by the 6-AMLD. This could include:
- introducing due diligence and reporting requirements for transactions involving high-net-worth individuals or international counterparties (including investors, owners and sponsors);
- implementing due diligence and reporting for domestic and international transactions above a pre-determined threshold; and
- increasing transparency and reporting obligations for beneficial ownership and especially where there are multi-layered ownership structures. For example, this could include a requirement for professional sports teams to publicly declare who their ultimate beneficial owners are.
Now would be an opportune time to consider this, as Australia’s AML/CTF Act is presently being reviewed by the Commonwealth Attorney-General’s Department and a public consultation is taking place in an effort to simplify and modernise it.
Match-fixing
What is match-fixing and how is it governed in Australia?
The second issue in Australian sport which requires attention is match-fixing, given the influence betting can have on this and the prevalence in Australia of wagering (race and sports betting). Based on the most recent statistics available, total gambling expenditure in Australia increased from $21.243 billion in 2019-2020 to $24.039 billion in 2020-2021 (13.2 per cent increase). This equates to per adult gambling expenditure increasing from $1,067.73 to $1,200.22. Furthermore, wagering specific to race and sports betting increased from $4.567 billion to $5.815 billion (a 27.3 per cent increase) over the same period.5
Match-fixing, as defined by the National Policy on Match-Fixing in Sport (the Policy) is “the manipulation of an outcome or contingency by competitors, teams, sports agents, support staff, referees and officials and venue staff.”6
Australian sports, including football (soccer), rugby league and harness racing have all been the subject of reported betting and match-fixing allegations in recent years. This trend, coupled with the significance presence of sports gambling in Australia, has prompted the Australian government to consider the implementation of a national match-fixing regime.
Nevertheless, whilst the Policy, which was signed by each state and territory’s respective Minister for Sport in 2011, encourages collaboration and uniformity, Australian match-fixing laws are ultimately subject to the framework of each individual state (if any) and thus lack consistency.
Where does the power to implement a national match-fixing regime reside?
The external affairs power granted under the Australian Constitution enables the Australian government to create legislation ratifying obligations imposed by an international treaty.7
On 1 February 2019 Australia became a party to the Convention on the Manipulation of Sports Competitions (the Macolin Convention) – a multilateral treaty established in 2014 which attempts to protect the integrity of sport through the detection, prevention, and punishment of match-fixing.8 Once the treaty is ratified, the Australian government may exercise its external affairs power to implement a national match-fixing regime, by way of Commonwealth legislation, to create a uniform match-fixing regime across the country.
What would a national match-fixing regime look like?
One way of implementing a national match-fixing regime would be to amend the Criminal Code to introduce national criminal offences for match-fixing. As mentioned above the Criminal Code recognises money laundering as a criminal offence, however this provision does not apply to sports match-fixing. Additionally, whilst under the Crimes Act 1900 (NSW) it is an offence to facilitate conduct that corrupts the outcome of an event, this operates in respect of sports betting, not solely match-fixing.9
The most obvious starting point for a national match-fixing regime is the Model Criminal Law Provisions for the Prosecution of Competition Manipulation (Model Provisions). The Model Provisions are a framework developed and endorsed jointly by the United Nations Office on Drugs and Crime and the International Olympic Committee as a means of harmonising international criminal law, particularly in relation to sport. Notably, the Model Provisions are broader in scope than most current state frameworks which fail to capture betting on a fixed match as an offence. Adopting the key principles enshrined in the Model Provisions would expediate the process of implementing a much-needed national match-fixing regime.
Conclusion
Whilst the future of Australian sport is undoubtedly bright, the threats that money laundering and match-fixing pose must not be understated or ignored. It is essential that sporting codes and bodies understand the implications that money laundering and match-fixing can have on sport and work collaboratively with legal experts, regulators and government to establish the necessary frameworks to ensure that the integrity of Australian sport is preserved.
1 Section 6 of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth).
2 Criminal Code Act 1995 (Cth) pt 10.2.
3 Council of the European Union, Anti-money laundering: Council and Parliament strike deal on stricter rules, (18 January 2024), https://www.consilium.europa.eu/en/press/press-releases/2024/01/18/anti-money-laundering-council-and-parliament-strike-deal-on-stricter-rules/.
4 Council of the European Union, ‘Proposal for a Regulation of the European Parliament and of the Council on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing’, (13 February 2024), https://data.consilium.europa.eu/doc/document/ST-6220-2024-REV-1/en/pdf.
5 Victorian Responsible Gambling Foundation, ‘Latest edition of Australian Gambling Statistics’, (9 October 2023), https://responsiblegambling.vic.gov.au/about-us/news-and-media/latest-edition-of-australian-gambling-statistics/.
6 Sport and Recreation Ministers’ Council, National Policy on Match-Fixing in Sport, (Policy, 10 June 2011) https://www.sportintegrity.gov.au/sites/default/files/National%20Policy%20on%20Match-Fixing%20in%20Sport%20%28FINAL%29.pdf.
7 Australian Constitution s 51(xxix).
8 Council of Europe Convention on the Manipulation of Sports Competitions, opened for signature 18 September 2014, CETS 215 (entered into force 1 September 2019).
9 Crimes Act 1900 (NSW) ss193H-193Q.
