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Australia’s financial crimes watchdog has launched legal action against Ladbrokes owner Entain over “serious and systemic non-compliance” with anti-money laundering rules.
The Australian Transaction Reports and Analysis Centre (Austrac) said on Monday that the FTSE 100 group failed to identify and assess anti-money laundering risks. It is the first time the regulator has brought civil penalty proceedings against an online betting company, it added.
Austrac said the company, which operates as Neds and Ladbrokes in Australia, created risks that individuals unknown to the company could access and use its betting platform, including through third-party providers.
Entain did not have appropriate controls to confirm the identity of customers making these deposits and the source of this money, the regulator alleged, following a probe launched in 2022. Shares in Entain were down 3 per cent in early trading in London.
Austrac added that the betting company failed to conduct appropriate checks on 17 high-risk customers and did not deal with the risk that its sites could be exploited to spend the proceeds of crime in those cases. It alleged that Entain “deliberately obscured the identity of some high risk customers, on its own systems, through the use of pseudonyms to ‘protect their privacy’.”
Entain said it “co-operated fully” with Austrac throughout its investigation and warned that the outcome of the legal action might result in a penalty that “could be potentially material.”
“We note the allegations made, which we take extremely seriously,” said Entain chief executive Gavin Isaacs, who assumed the role in September.
The Federal Court of Australia will determine whether Entain contravened laws related to money laundering and risk and what penalties should be imposed.
The civil proceeding is the latest blow for Entain, which last year agreed to pay £615mn as recompense for failing to prevent bribery at its former Turkish subsidiary as part of a deferred prosecution agreement, following a probe by HM Revenue & Customs. That resulted in an £879mn loss last year.
It was also ordered to pay £17mn in 2022 for anti-money laundering failures in the UK as part of the Gambling Commission’s largest-ever enforcement action.
Austrac has cracked down on Australia’s gambling sector and lax controls in relation to money laundering, with much of the attention focused on the once-thriving casino sector.
Crown Resorts, which was sold to Blackstone, paid a A$450mn (US$290mn) fine for breaching anti-money laundering laws, while a separate case against Star Entertainment is ongoing. A third casino group, SkyCity, has also paid a A$63mn penalty over similar issues.