Australian authorities have initiated legal proceedings against Entain, the global gambling operator behind brands like Ladbrokes and Coral, over alleged non-compliance with anti-money laundering (AML) and counter-terrorism financing (CTF) laws. The Australian Transaction Reports and Analysis Centre (AUSTRAC) announced the case, marking its first civil penalty action against an online gambling operator.
AUSTRAC accusations and allegations:
AUSTRAC’s investigation into Entain began in September 2022 as part of a broader review of corporate bookmakers. The agency alleges “serious and systemic non-compliance” with AML/CTF regulations, claiming the operator failed to establish adequate measures to identify risks and safeguard its platforms from criminal exploitation.
According to AUSTRAC, Entain lacked robust controls to verify customer identities and determine the sources of their funds. Additionally, it claims that third parties were allowed to make deposits on behalf of customers, enabling the use of proceeds from criminal activities to fund gambling accounts.
One of the more concerning allegations is that Entain intentionally obscured customer identities by using pseudonyms, purportedly to protect their privacy. Moreover, AUSTRAC noted the operator failed to conduct sufficient checks on 17 high-risk customers, further exposing the platform to financial crime risks.
AUSTRAC chief executive Brendan Thomas underscored the severity of the allegations, stating, “We are alleging this left the company at serious risk of criminal exploitation. Money laundering is often a symptom of serious criminal activity, including fraud, scams, and corruption, all of which have equally serious effects on our communities.”
Entain’s position as one of the largest global sports betting and gaming companies adds to AUSTRAC’s concern. Thomas emphasized the responsibility of major operators to maintain rigorous compliance standards to protect communities and the financial system.
Entain’s response and ongoing compliance efforts:
In response to the allegations, Entain acknowledged the potential for significant penalties but emphasized its commitment to improving compliance. The company highlighted that it has fully cooperated with AUSTRAC during the investigation and has been implementing a program to enhance its AML/CTF systems since December 2022.
As This is Money reports, Entain CEO Gavin Isaacs stated, “We note the allegations made, which we take extremely seriously. We are committed to keeping financial crime out of gambling and continue to play our part in supporting a well-regulated and compliant sector for our customers, stakeholders, and the wider community.”
The company expects to complete its compliance improvements by June 2025, in line with plans submitted to AUSTRAC in 2023. However, Entain warned investors that the legal proceedings could result in a material penalty, though the timeline for resolution remains uncertain.
Entain is not the first gambling operator to face AUSTRAC’s scrutiny. The agency has targeted several land-based casino operators in recent years for AML/CTF breaches, leading to substantial penalties. Crown Resorts, for instance, was fined AU $450 million in 2022 over compliance failures at its Melbourne and Perth properties. Similarly, SkyCity Entertainment Group agreed to pay AU $67 million in penalties following issues at its Adelaide casino.
Online operators are increasingly under AUSTRAC’s lens as well. SportsBet reached an enforceable undertaking earlier this year after an investigation into its AML/CTF practices. Bet365 is also being audited for potential breaches, signaling AUSTRAC’s expanding focus on digital gambling platforms.
The Federal Court of Australia will now determine whether Entain has contravened AML/CTF laws and, if so, what penalties it should face. In the meantime, AUSTRAC has stated it will not provide further commentary until the case progresses in court.
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Vanja Mitic 2024-12-16 14:31:23
