- AUSTRAC began a probe into Coral and Bwin owner Entain in September 2022
- Entain was previously fined a record £17m by Britain’s Gambling Commission
Australian authorities have brought legal action against Entain over claims the Ladbrokes owner breached anti-money laundering rules.
The Australian Transaction Reports and Analysis Centre (AUSTRAC) has accused the FTSE 100 company of ‘serious and systemic non-compliance’ with the country’s anti-money laundering and counter-terrorism financing regulations.
It is the first time Australia’s financial intelligence agency has begun civil proceedings against an online gambling business.
AUSTRAC began a probe into Entain, which also owns Coral and Bwin, in September 2022 following a supervisory campaign covering the corporate bookmaking industry.
Among its claims, AUSTRAC says Entain lacked ‘appropriate controls’ to confirm the identity of customers and the source of their money.
It also accuses the firm of not making sufficient checks on 17 ‘higher-risk’ customers and even intentionally hiding the identity of some to ‘protect their privacy’.
Sued: Australian authorities have brought legal action against Entain, claiming the Ladbrokes owner breached anti-money laundering laws
Brendan Thomas, chief executive of AUSTRAC, alleged that Entain ‘did not develop and maintain a compliant anti-money laundering program and failed to identify and assess the risks it faced’.
He added: ‘We are alleging this left the company at serious risk of criminal exploitation.’
Entain told investors that it was fully cooperating with AUSTRAC and expects to complete a programme to improve its anti-money laundering and counter-terrorist financing systems and processes in June 2025.
However, it warned them that while the probe’s outcome was uncertain, it could result in a material penalty.
Recent fines handed out under AUSTRAC’s ongoing money laundering review of gambling businesses have included penalties amounting to AUS$450million levied at casino and hotel resort Crown.
Britain’s Gambling Commission fined Entain a record £17million in August 2022 for ‘completely unacceptable’ social responsibility and anti-money laundering failures.
It found that the betting group let some customers bet hundreds of thousands of pounds without sufficient checks, including one person living in social housing who had deposited £186,000 in six months.
Over a year later, Entain agreed to pay a £615million settlement to avoid going to trial over alleged bribery at a former Turkish-facing subsidiary.
Gavin Isaacs, chief executive of Entain, said: ‘We note the allegations made, which we take extremely seriously.
‘We have cooperated fully with AUSTRAC throughout its investigation, and we are implementing further enhancements to Entain Australia’s AML (anti-money laundering) and CTF (counter-terrorist financing) 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.’
Entain shares were 5.2 per cent lower at 773p on Monday morning, making them the FTSE 100’s biggest faller.
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