It is a little-known fact that it can be an offence to gamble leading up to your bankruptcy. This is because Section 271 of Bankruptcy Act 1966 (the Act) provides that it is an offence for a person to gamble away funds within two years of the commencement of their bankruptcy.
This offence can be punishable by imprisonment of up to 1 year.
What must a bankruptcy Trustee do if they identify gambling?
A bankruptcy Trustee has an obligation to refer any offences identified to the Australian Financial Security Authority (“AFSA”). AFSA is the Federal Government regulator for bankruptcy in Australia. This includes if they identify that a bankrupt has incurred any material losses through gambling within two years of the commencement of their bankruptcy.
To refer an offence a Trustee has to set out brief details of what has occurred along with providing relevant documents.
Prosecution for the offence of gambling
AFSA has a general policy of not referring a case for prosecution to the Commonwealth Director of Public Prosecutions where it appears that a debtor could be categorised as having been a problem gambler and had not been involved in any associated criminal activity in respect of their gambling.
If the debtor is not prosecuted, the debtor is informed and put on notice of this offence provision. AFSA’s view is that an official caution is a good outcome as it provides a level of deterrence for persons contemplating engaging in high levels of gambling when they are in financial difficulty.
AFSA may refer a matter for prosecution if the case involves:
- Clear criminality;
- A person who is not a problem gambler, but has made a small number of significant apparent wagers prior to bankruptcy;
- Where gambling is part of a number of offences; and
- Ongoing allegations of repeat offending such as where someone becomes bankrupt twice and has lost money through gambling both times.
Contact us for assistance
If you have financial problems and wish to obtain advice and assistance we are here to help.
If you have a gambling problem you should consider seeking advice and support. You can find out more information about how to do this on the Queensland Government’s website.