Australia’s financial crimes watchdog, Austrac, has taken legal action against Entain, citing failures in its anti-money laundering (AML) and counter-terrorism financing (CTF) measures. This is the first time Austrac has pursued civil penalties against an online betting company.
Entain, which owns Ladbrokes and Neds in Australia, revealed the penalties could have a “potentially material” impact on its business. Austrac’s investigation, launched in September 2022, found multiple breaches in Entain’s compliance framework, exposing it to criminal risks.
Key Findings of the Investigation
Austrac’s review highlighted that Entain’s management and board lacked proper oversight of AML/CTF processes. This weakened its ability to identify risks and left the company vulnerable to misuse by criminals.
One issue involved third parties depositing cash on behalf of customers, which Entain failed to adequately monitor. Without proper controls, funds from illicit activities could be used to gamble. The company also did not verify the identities or fund sources of these customers.
Additionally, Austrac found that Entain did not conduct proper checks on 17 high-risk customers and allowed the use of pseudonyms to obscure their identities. Its 24/7 online operations heightened these risks, with opportunities for anonymous users to exploit the system.
Austrac’s Concerns
Austrac’s CEO, Brendan Thomas, criticized the lapses, noting Entain’s global status in the gambling industry. He warned that money laundering often signals deeper crimes like fraud and corruption, which harm communities.
“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,” said Thomas.
The Federal Court of Australia will now determine whether Entain violated AML/CTF laws and what penalties it may face.
Entain’s Response
Entain acknowledged the investigation and stated it is cooperating fully with Austrac. The company has already begun implementing changes to strengthen its AML and CTF programs, with a completion target of June 2025.
Entain CEO Gavin Isaacs emphasized the company’s commitment to preventing financial crime. “We are committed to keeping financial crime out of gambling and continue to play our part in supporting a well-regulated and compliant sector,” he said.
The case could lead to substantial penalties, as seen in previous fines against Australian land-based casinos, which reached hundreds of millions of dollars. Court proceedings are expected to take time, and Austrac will not comment further while the matter is ongoing.
It’s not the first time that Entain is involved in a scandal, earlier this year it was involved in bribery charges in Turkey.
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