Entain Plc has been investigated in Australia along with Ladbrokes and NEDs for “serious and systemic failures to comply” with anti-money laundering and counter-terrorist financing (AML/CTF) laws.
AUSTRAC, Australia’s financial watchdog, has announced that it has launched proceedings against Entain.
Brendan Thomas, CEO of AUSTRAC, stated: “We allege that Entain failed to develop and maintain a compliant anti-money laundering programme and did not adequately identify or assess the risks it faced. This, in turn, left the company exposed to serious risks of criminal exploitation.”
The watchdog believes that Entain’s brands could be used for criminal exploitation, including fraud, deception and corruption. The allegations against Entain include:
- Failure to adequately oversee its AML/CTF program by its board and senior management.
- Entain’s Australian brands are exposed to risks due to the operation of a 24/7 online platform accessible to unknown users and third party providers.
- Accepting third party cash deposits into gaming accounts, increasing the risk of money laundering.
- Failure to confirm the identity and funding sources of certain customers, including 17 high-risk individuals.
It adds that Entain deliberately concealed the identities of high-risk customers by allowing pseudonyms to be used under the guise of protecting their privacy, potentially concealing criminal activity.
“This is the first time AUSTRAC has brought civil penalty proceedings against businesses operating in the online betting sector, and the Australian arm of Entain is part of one of the world’s largest sports betting and gaming groups,” Brendan Thomas said.
“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.”
The findings of AUSTRAC’s investigation will be referred to the Federal Court, which will determine whether Entain breached the AML/CTF Act and impose appropriate fines.
While the case is ongoing, AUSTRAC will not comment further, reiterating the importance of companies ensuring they have robust customer identification processes and effective risk management to combat money laundering in the Australian gambling industry.
AUSTRAC continues to increase its focus on the gambling industry as part of its efforts to combat money laundering. The Federal Court previously fined Crown $450 million over two years in 2023 and SkyCity $63 million this year for breaching the AML/CTF Act.
The Entain board acknowledged that AUSTRAC had commenced civil penalty proceedings in the Federal Court against its Australian subsidiary. In a statement, the group said it had fully co-operated with AUSTRAC throughout the investigation, which commenced in September 2022, and had also initiated a program of improvements to its AML/CTF systems and processes.
Entain maintains Australia’s strategic importance as a key growth market.
Group CEO Gavin Isaacs said:“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.
“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.”
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