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Criminals are targeting Auckland's Sky City and other casinos because they see them as an easy way of laundering hundreds of thousands of dollars from crimes such as drug dealing.
Inspector Rob Abbott, area commander for Auckland central business district and liaison officer for Sky City casino, said police and the department of Internal Affairs knew Sky City casino was a target for money launderers.
"We know that certain criminals go through there and try to launder money through there," he said. Apart from that, the casino itself was a relatively crime-free area, except for "run-of-the-mill" disorder.
A Weekend Herald inquiry has identified a former Sky City staff member who was a dealer at the casino and alleged that money laundering happened "all the time" in the VIP room.
The former dealer, who did not want to be named, said Sky City was "fully aware" that money was laundered through the casino, just as it knew that loan sharks operated there.
"Over 50 per cent of VIP players are involved in criminal activity such as money laundering," said the former dealer, who worked at Sky City for a decade.
"I clearly recall this being mentioned to a group of gaming staff in a briefing to us from a senior manager."
Three high-stakes gamblers, who also did not want to be identified, said they were aware of money being laundered in New Zealand casinos.
A Sky City spokeswoman said it was difficult to respond to anonymous, unsubstantiated allegations about money laundering. The casino encouraged anyone with problems to advise the casino directly so it could act.
Stephen Lyttelton, the former acting chief executive of Christchurch Casino until he quit three weeks ago, said he raised concerns about money laundering there during a board meeting on May 31.
The South Australian state government claimed last week that Sky City's Adelaide casino was being used to "wash criminal cash" by motorcycle gangs.
Police in South Australia are to be given extra powers to issue barring orders for the Adelaide Casino that "will help curb money laundering and other criminal activity at the venue".
The claims about Christchurch casino are being investigated by the Department of Internal Affairs, and Minster Rick Barker said he was prepared to broaden the inquiry to include either Sky City or loan sharks in general if it was felt to be necessary.
Mr Barker also told the Weekend Herald he wanted Internal Affairs to "clamp down further" on money laundering in casinos.
The Green Party and Problem Gambling Foundation are calling for a public inquiry into loan sharks, money laundering and other criminal activity in casinos.
The Weekend Herald was given a number of examples of how money was laundered in casinos.
The examples centred around customers gambling with cash they had gained illegally, turning it into winnings, and leaving with a cheque from the casino.
If they were ever investigated, they could point to the money being won at the casino.
Police and the Department of Internal Affairs acknowledged that money was laundered in Sky City and other New Zealand casinos but were confident security at the casinos could pick it up.
Mike Hill, director of gambling compliance at the Department of Internal Affairs, admitted he wanted certain casino operators to be "more aware" of criminality on their premises - but he refused to name the problem casinos.
Clean, and tax-free
Laundering money at a casino is not necessarily for drug dealers.
A former casino staff member took the Weekend Herald through how a property developer and a friend did an $800,000 deal across the roulette table - and paid no tax.
The former staff member said one man owed the other for a big load of materials for a development. Both men took $400,000 each.
They devised a system where over time they essentially bet against each other on red or black - covering each other. The system worked in such a way that it was not too obvious and the ex- staff member said the odds meant over time they would come out roughly even.
They might lose - one dropping to $320,000 - but they were prepared to take a loss because it was a cost of cleaning the money. They might also win.
At the end they walked out of the casino with cheques stamped casino winnings, and paid no tax on their $800,000 deal.
