The parent company of Ladbrokes and Ned has been sued by the financial crimes regulator for allegedly not doing enough to prevent money laundering on their products.
The Australian Transaction Reports and Analysis Centre (AUSTRAC) has commenced civil proceedings against the Australian arm of Entain Group, in the first case of its kind against an online betting business.
AUSTRAC alleges the company had “serious and systemic non-compliance” with Australia’s anti-money laundering and counter-terrorism financing (AML/CTF) laws.
It alleges Entain did not develop and maintain a compliant anti-money laundering program and failed to identify and assess the risks it faced, leaving the company at serious risk of criminal exploitation.
AUSTRAC’s allegations include that:
- The board and senior management did not have appropriate oversight of its AML/CTF program
- The company operated a 24/7 business through its website and app, which created risks that persons unknown to the business could access and use the betting platform including through third party providers
- 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 company did not have appropriate controls to confirm the identity of customers making these deposits and the source of this money
- The company did not conduct appropriate checks on 17 higher-risk customers
- The company deliberately obscured the identity of some high-risk customers, on its own systems, through the use of pseudonyms to “protect their privacy”
Entain CEO Gavin Isaacs said the company took the allegations extremely seriously on a notice posted on the London Stock exchange.
“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,” Mr Isaacs said.
“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.
“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 matter is now before the Federal Court.
Anti-money laundering action
Several gambling companies have faced penalties for contraventions to the AML/CTF laws in recent years.
In 2023 Crown Resorts was ordered to pay $450 million for breaching money laundering laws.
AUSTRAC probes Sportsbet, Bet365
The Australian Transaction Reports and Analysis Centre (AUSTRAC) launches an investigation into two of the nation’s biggest sports betting companies.
This year Adelaide’s SkyCity was fined $67 million over allegations the casino had customers with links to organised crime, loan sharking, human trafficking and sex slavery.
Online betting company Sportsbet also accepted an enforceable undertaking to uplift its compliance with AML/CTF laws in May this year.
Independent federal MP Andrew Wilkie in November re-introduced a bill that would give courts the power to return the gambled proceeds of crimes to victims.
The bill would put obligations on gambling companies to report to AUSTRAC if they have reason to suspect a person is paying for a gambling service with money they’ve obtained illegally.
It also enables the Federal Court to order a gambling company to return stolen funds, where it’s found that a bettor has paid for a gambling service using funds they obtained illegally.
