Entain Plc is facing scrutiny in Australia as its brands, Ladbrokes and NEDs, are being investigated for alleged “serious and systemic non-compliance” with laws concerning anti-money laundering and counter-terrorism financing (AML/CTF).
The Australian financial authority, AUSTRAC, revealed today that it has initiated legal actions against Entain. AUSTRAC’s CEO, Brendan Thomas, explained: “We believe Entain did not establish or maintain a compliant anti-money laundering program and inadequately identified or assessed the risks it encountered, which made the company vulnerable to significant criminal activity.”
AUSTRAC considers Entain’s brands susceptible to crime, including fraud, scams, and corruption, with specific allegations comprising:
– Inadequate board and senior management oversight of its AML/CTF program.
– Risks associated with Entain’s Australian brands due to the operation of a 24/7 online platform accessible to anonymous users and third-party providers.
– The acceptance of cash deposits by third parties for betting accounts, amplifying money laundering risks.
– Failure to verify the identity and funding sources of certain customers, notably 17 high-risk individuals.
Additionally, there are accusations that Entain intentionally disguised the identities of high-risk customers using pseudonyms, purportedly to protect privacy, concealing potential criminal behavior.
“For the first time, AUSTRAC has initiated civil penalty proceedings against companies in the online betting sector, with Entain’s Australian operations being part of one of the largest sports betting and gaming groups globally,” Brendan Thomas stated.
“The online betting sector and other AUSTRAC-regulated businesses must prioritize their AML/CTF responsibilities. This includes ensuring they have effective processes to identify clientele, even when relying on third parties for transaction processing.”
AUSTRAC’s investigation results will be submitted to the Federal Court, which will decide on Entain’s compliance with the AML/CTF Act and any resulting penalties. As the case proceeds, AUSTRAC will not provide further remarks but emphasizes the necessity for businesses to implement thorough customer identification and strong risk management to mitigate money laundering in Australia’s gambling industry.
AUSTRAC is bolstering its focus on curbing money laundering within the gambling sector. This comes after noteworthy penalties, such as the Federal Court’s decision ordering Crown to pay $450 million over two years in 2023, and SkyCity’s $63 million fine this year for AML/CTF Act violations.
Entain’s board acknowledged that AUSTRAC has initiated civil penalty proceedings against its Australian division. The FTSE-listed company asserts that it has fully cooperated with AUSTRAC since the investigation’s start in September 2022 and has commenced a program to enhance its AML/CTF systems and processes.
Emphasizing Australia’s strategic importance as a growth market, Group CEO Gavin Isaacs remarked, “We have worked collaboratively with AUSTRAC during its investigation and are making further improvements to Entain Australia’s AML and CTF compliance systems.”
“While there are still some enhancements to be made, these are expected to be in line with the plan we presented to AUSTRAC in 2023.”
“We are dedicated to eliminating financial crime from gambling, supporting a well-regulated and compliant sector for our clients, stakeholders, and the broader community.”