I wonder if this might unintentionally incentivize _more_ cases of embezzlement. After all, gambling addicts with dysfunctional moral compasses could say, “and if I lose, grandma can still get her money back”. Much in the way that employees/friends/family members justify stealing credit cards because ‘they can just report it as fraud’.

I think this might also incentivize better policy and behavior from casinos, requiring income checks and fraud checkpoints as the gambler spends money

So I should require a full investigation of every customer's finances before any purchase?

If you want to make the victim whole, that's what insurance is for.

I'm not saying this as some sort of matter of moral conviction. I can't speak for Australia, but in the U.S., if you are found in possession of stolen property, you have to give it back. And if a prosecutor thinks they can prove you knew or should have known, they can charge you with a crime. I don't see why businesses should get a pass on this when individuals don't.

If I rob a bank and use a bunch of marked bills to buy a nice dinner, the restaurant doesn’t get to keep that money when the police come knocking, does it?

The courts will do the investigation for you. Why not have insurance on your end, in case the government seizes the money because it wasn't the criminal's to give to you?