The Black Economy Taskforce is recommending a crackdown on illegal gambling after investigations revealed illegal betting exchanges operating in Australia, some connected to Asian crime gangs.
The taskforce's chairman, Michael Andrew, told Fairfax Media it knew of at least 10 illegal exchanges, turning over $1 billion annually. The bulk of the money is flowing into one exchange alone, he said.
![Punters are being warned not to get involved with illegal betting exchanges in the lead-up to spring racing.](http://web.archive.org./web/20170914122846im_/https://www.fairfaxstatic.com.au/content/dam/images/g/x/t/o/d/u/image.related.articleLeadwide.620x349.gydqbf.png/1505013552269.jpg)
The illegal operators consisted of international crime syndicates and local criminals, who were known to authorities and under investigation.
"During our work we have identified numerous illegal betting exchanges operating in Australia, many connected to Asian crime gangs," Mr Andrew said, ahead of the taskforce's final report which is due to be released next month.Â
![Michael Andrew is finalising his recommendations to the federal government on strategies to combat the black economy.](http://web.archive.org./web/20170914122846im_/https://www.fairfaxstatic.com.au/content/dam/images/g/s/a/6/5/8/image.related.articleLeadwide.620x349.gydqbf.png/1505013552269.jpg)
The taskforce has received 147 submissions to date, some of which have come from racing industry insiders.
Mr Andrew warned punters not to get involved with illegal operators in the lead-up to spring racing, including the Melbourne Cup.
The taskforce would be urging the racing industry to warn off punters and agents acting illegally and name and shame them, he said.
"The consequences could be serious," he said, noting the Interactive Gambling Amendment Act will soon become law and ban such betting exchanges.
Mr Andrew said there have also been changes to the way multinationals are taxed, and these could place taxation liabilities on their agents and participants.
"Illegal gambling undermines the integrity of our racing and sports entertainment industries," he said.
"It makes no economic contribution to social infrastructure, state taxation nor to the cost of the racing product. Â
"It puts legal betting operators at a large competitive disadvantage especially with high volume professional punters."
They use these illegal betting exchanges to convert black money into white money.
Michael Andrew, Black Economy Taskforce head
The fees typically charged by licensed bookmakers and TAB can range anywhere up to 15 per cent. But illegal operators charge low fees of around 1 per cent to 2 per cent.
He said they were attracting professional punters and criminals.
"They use these illegal betting exchanges to convert black money into white money," he said, adding that it also creates money laundering opportunities.
"We have for several months been gathering information on these agents and punters but welcome any more intelligence from the community."
The problem stems beyond the racing industry, Mr Andrew said, and the taskforce was collecting more information on illegal betting generally.
Australia's major sports, including the AFL, and online bookmakers have been lobbying for live in-play betting to be legalised online.
But the Turnbull government recently confirmed it is illegal and that bets on an event can only be made during play in person or over the phone.
The taskforce has called on businesses, professional bodies and ethnic and religious community leaders to suggest ways the government could reshape cultural norms that have led to illegal cash economy activity becoming "almost a national sport".
The taskforce wants to help the federal government claw back an estimated $15 billion in lost federal tax revenue and illegitimate welfare payments due to the black economy. It noted that some ethnic groups were predisposed to deal in cash.
To tackle the problem, one of the options being considered include banning cash wages.
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