Australia’s financial crime regulator AUSTRAC has launched civil penalty proceedings against Entain Group Pty Ltd, the operator of online betting platforms Ladbrokes and Neds, alleging serious breaches of anti-money laundering (AML) and counter-terrorism financing (CTF) laws. This marks the first legal action by AUSTRAC against an online betting company.
The Federal Court case, filed on December 16, accuses Entain of “serious and systemic” non-compliance, including insufficient oversight by senior management, vulnerabilities in customer identity verification, and inadequate safeguards to prevent criminal exploitation.
AUSTRAC’s investigation, launched in September 2022, uncovered multiple failings in Entain’s AML/CTF protocols:
- Board oversight deficiencies: AUSTRAC alleged that Entain’s leadership failed to adequately monitor its AML/CTF programs, leaving the business exposed to risks of criminal exploitation.
- Third-party transactions: Entain allegedly allowed third parties to deposit cash on its behalf, potentially facilitating the use of funds derived from criminal activities.
- High-risk customers: The company reportedly failed to conduct proper due diligence on 17 high-risk customers and was accused of using pseudonyms to obscure the identities of certain individuals.
- Operational risks: Entain’s 24/7 betting platforms were cited as being susceptible to misuse by unidentified individuals through third-party providers.
If found guilty, Entain could face significant financial penalties. Precedent suggests that fines for AML/CTF breaches can total in the hundreds of millions of dollars.
AUSTRAC Chief Executive Brendan Thomas described the case as particularly concerning given Entain’s size and influence as a global gambling operator.
“AUSTRAC’s proceedings allege that Entain did not develop and maintain a compliant anti-money laundering program, leaving the company at serious risk of criminal exploitation,” Thomas said. “Money laundering often accompanies crimes such as fraud, scams, and corruption, which have profound impacts on communities.”
AUSTRAC emphasized that all businesses it regulates must ensure robust compliance systems to identify customers and prevent money laundering risks, especially in sectors as vulnerable as online betting.
Entain acknowledged AUSTRAC’s allegations. CEO Gavin Isaacs highlighted the company’s commitment to improving compliance. “We note the allegations made, which we take extremely seriously,” Isaacs said. “We are committed to keeping financial crime out of gambling and supporting a well-regulated, compliant sector.”
The operator outlined its ongoing efforts to enhance AML/CTF controls, with a remediation program launched in December 2022 and scheduled for completion by June 2025.
AUSTRAC’s action against Entain is part of a broader crackdown on money laundering in Australia’s gambling industry:
- Crown Resorts: Penalized $450 million in 2023 for systemic failures.
- SkyCity Entertainment: Fined $63 million earlier this year.
- Star Entertainment Group: Facing ongoing Federal Court proceedings over similar breaches.
- Sportsbet: Entered an enforceable undertaking to address compliance issues.
AUSTRAC’s National Risk Assessment has identified the online betting sector as highly vulnerable to money laundering, prompting intensified regulatory scrutiny.
Original article: https://www.yogonet.com/international/news/2024/12/17/88886-austrac-launches-landmark-legal-action-against-entain-over-money-laundering-failures
