(Reuters) -Australia’s financial crime watchdog has launched legal proceedings against Ladbrokes owner Entain, alleging breaches of the country’s anti-money laundering (AML) and counter-terrorism financing (CTF) laws by its online betting platforms.
The Australian Transaction Reports and Analysis Centre (AUSTRAC) said on Monday that Entain Group Pty Ltd’s management failed to adequately oversee its AML and CTF program, leaving the company vulnerable to exploitation through its online betting platforms and third-party cash deposit systems.
AUSTRAC claimed that Entain’s unit failed to implement adequate identity and fund-source checks, particularly for 17 high-risk customers, and reportedly used pseudonyms to obscure identities.
In a statement, Entain’s CEO Gavin Isaacs warned investors of a potentially significant financial penalty from the legal proceedings.
Violations of the anti-money laundering and counter-terrorism act can result in fines of up to A$22.2 million ($14.14 million) per infraction under Australia’s AML/CTF Act.
“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. … We expect these to be implemented in line with the plan we communicated to AUSTRAC in 2023,” Isaacs said.
Shares of London-listed Entain fell as much as 5.5% in early trade.
The watchdog’s crackdown on money laundering in Australia’s gambling industry extends beyond Entain, with UK-based online gambling firm Bet365 facing a potential penalty in Australia following a 2022 investigation into suspected dirty money.
Australia is considering a range of potential reforms after an online gambling inquiry in 2022, including possible bans on advertising, sponsorships, and inducements, as well as modifications to gambling app algorithms.
The watchdog’s efforts have resulted in significant penalties for Crown and SkyCity, ongoing litigation against Star Entertainment, and continued scrutiny of other global gambling entities.
($1 = 1.5701 Australian dollars)
(Reporting by Roushni Nair in Bengaluru; Editing by Mrigank Dhaniwala and Sonia Cheema)
