Minister of Finance Larry Howai has advised all private members clubs to look for certain red flags in determining suspicious transactions or activity by their customers.
They must report such activity to the Financial Intelligence Agency (FIA), without tipping off the customer, he said.
Howai said Government recognised the existing laws on gambling were in dire need of reform and fail to protect the vulnerable or to prevent unfair practices and criminal infiltration
He was speaking yesterday in the House of Representatives in the Provisional Collection of Taxes Order which approves the budget tax measures with respect to the increases in taxes on gaming industry and amendments to the motor vehicle tax to include motorcycles, private school buses and private omnibuses.
Howai said private members clubs would not have to pay the new taxes until January. He said that while he had announced in the budget the measure would take effect from October 15, he was advised the gaming tax is payable by private members' clubs annually, in four tranches with the last payment being made by October 15. "In order to avoid any appearance of a measure being in the nature of a retrospective tax, it was felt that the increase in the gaming tax should take effect from January 1, 2013," he said.
Howai said it was clear private member clubs which were operating mainly as casinos were contravening the existing law and the certificates issued by the Licensing Committee to permit gambling activities on their premises can be cancelled.
He said many members clubs operate a business and the taxation of gambling tables, machines and devices was only a small measure of the profits derived from gambling activities. He said there was information to suggest if Government went the route of corporation tax, it could increase revenue by a further $300 million a year from this industry.
"I propose to establish a committee to review the existing laws, policies and practices relating to all forms of gambling as well as to design a new regulatory framework for the industry," Howai said.
He said all clubs were required to register with the FIU within the time stipulated and if they didn't it was an offence and clubs are liable on summary conviction to a fine of $50,000 and a further fine of $5,000 for each day the offence continues.
He said the clubs in examining the operations should look the following type of customers:
• Those who inject high amounts of money into a gaming machine and cash it out after limited gambling activity, claiming a jackpot win where there is none.
• Customers who purchase a large volume of chips with cash in limited gambling activity and then cash them for a casino cheque.
• Customers with large amounts of currency.
• Customers who request winning cheques in the name of a third party or without a payee being named.
• Customers who add cash to their winnings in return for a casino cheque.
• Customers who purchase chips and leave shortly after with them (the chips).
• Customers who attempt to purchase legitimate jackpot winnings from other customers, usually for a value higher than that of the actual jackpot win.