Online and hospitality bet-maker Entain P/L is shaking things up, as it’s pursued in the Federal Court by Australia’s financial watchdog AUSTRAC.
After two years investigating, AUSTRAC (the Australian Transaction Reports and Analysis Centre) commenced civil penalty proceedings in December alleging serious and systemic non-compliance with Australia’s anti-money laundering and counter-terrorism financing (AML/CTF) laws.
AUSTRAC described the situation as a “systemic failure” in the company’s approach, prompting the first time it has brought such penalty proceedings against an online bookmaker.
“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,” stated CEO Brendan Thomas.
“We are alleging this left the company at serious risk of criminal exploitation.
“Money laundering is often a symptom of serious criminal activity, including fraud, scams and corruption, all of which have equally serious effects on our communities.”
AUSTRAC’s allegations include:
- Entain’s board and senior management not having appropriate oversight of its AML/CTF program, which limited its ability to identify risks – exacerbated by its 24/7 website and app, risking persons unknown, including through third party providers, accessing the platform
- Third parties accepted cash and other deposits on Entain’s behalf, credited into betting accounts in ways that could obscure the proceeds of crime, and the company did not have appropriate controls to confirm the identity of customers or source of these deposits
- Appropriate checks of higher risk customers were not conducted, and allegations include Entain deliberately obscuring the identity of some high-risk customers on its systems
Entain operates betting and gaming services including Ladbrokes, Neds, Coral, Gala, Foxy Bingo and PartyPoker.
It acknowledged the accusations by AUSTRAC and says it is “carefully considering” the Originating Application and Concise Statement filed and served.
An investigation by AUSTRAC was first announced in September 2022, and Entain says it has co-operated fully, in December 2022 commencing a dedicated programme of further enhancements to its AML and CTF systems and processes, which is due for completion June 2025.
This month the company reportedly cut its Ladbrokes Racing Club (LRC) program, launched in 2023, on the basis of rising operational costs, and after only five months since coming out of retirement to join the UK-based betting giant, chief executive Gavin Isaacs has resigned.
Sixty-year-old Isaacs is an Australian lawyer, who brought 25 years’ experience in the gaming sector. His resignation was effective immediately, and is said to have been by mutual agreement and reportedly not related to Entain’s strategy or performance. Chairperson Stella David will take over as interim CEO again, having been in the role for nine months prior to Isaacs’ appointment.
Britain’s biggest bookmaker (LSE:ENT) projects profits at the top end of its £1.04-1.09bn 2024 forecast. This is a strong rebound from its after-tax loss of £879m in 2023, coming after a £585m settlement and £190m write-down on its Australian operation.
AUSTRAC is Australia’s agency for detecting, deterring and disrupting criminal abuse of the financial system. This action continues its work focusing on gambling businesses in Australia, fighting money laundering opportunities.
It is in line with the 2023 Federal Court ruling that Crown pay $450m in penalties, and 2024 order that SkyCity pay a $63m penalty for breaches to the AML/CTF Act. AUSTRAC has secured an enforceable undertaking from Sportsbet, and is still pursuing a Federal Court case against Star as it continues regulatory focus “on a number of other gambling entities across Australia”.
The department also launched the money laundering National Risk Assessment, developed to support business better understanding and developing appropriate measures to mitigate risks.
The case involving Entain is now a matter for the Federal Court of Australia, which will determine if Entain contravened the Act.
Entain’s share price took a hit on the news, dropping almost 20 per cent by mid-January, to 614 (GBX). It has since recovered to 744.4 GBX.
