Australia’s financial watchdog AUSTRAC is suing Entain, the owner of online betting sites including Ladbrokes and Neds, over serious non-compliance with Australia’s anti-money laundering and counter-terrorism financial (AML/CTF) laws.
“AUSTRAC’s proceedings allege that Entain did not develop and maintain a compliant anti-money laundering program and failed to identify and assess the risks it faced. We are alleging this left the company at serious risk of criminal exploitation,” AUSTRAC CEO Brendan Thomas said.
AUSTRAC alleges the UK-based gambling giant’s board and senior management did not have appropriate oversight of its AML/CTF program, which limited its ability to identify the ML/TF risks it faced and its vulnerability to criminal exploitation.
It also alleges Entain deliberately hid the identity of 17 “higher risk” customers, on its own systems, through the use of pseudonymous to “protect their privacy”, and that it operated a 24/7 business through its website and app, which created risks that persons unknown to the company could access and use Entain’s betting platform including through third party providers.
Additionally, AUSTRAC alleges third parties, including businesses and individuals, accepted cash and other deposits on behalf of Entain to be credited into betting accounts in ways that could obscure the proceeds of crime.
The financial crime regulator also claims the company did not have appropriate controls to confirm the identity of customers making these deposits and the source of this money.
In a statement, Entain CEO Gavin Issacs said: “We note the allegations made, which we take extremely seriously. We have co-operated fully with AUSTRAC throughout its investigation and we are implementing further enhancements to Entain Australia’s AML and CTF compliance arrangements.”
The company had previously announced it was making further enhancements to Entain Australia’s AML/CTF systems and processes, which is due to be completed in June 2025.
“Whilst we still have some further improvements to make, we expect these to be implemented in line with the plan we communicated to AUSTRAC in 2023,” Iassacs said.
“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.”
This is the first time AUSTRAC has sued against a business that operates in the online gaming space, a move that the licensed clubs sector has been calling for.
“The online betting sector, and all other businesses regulated by AUSTRAC, must take their AML/CTF obligations seriously. This includes ensuring they have appropriate procedures to know who their customer is, even when they rely on third parties to process transactions,” Thomas said.
Since the start of the year, AUSTRAC has been cracking down hard on money laundering exploitation in the clubs and pubs sector.
At the start of December, reforms to the AML/CTF Amendment Bill 2024 was passed through parliament, with Thomas citing the bill will ease the regulatory burden on businesses by making it easier for them to meet obligations.
This piece was first published by our sister publication, Club Management.
