Entain hit with money-laundering lawsuit in Australia

(Sharecast News) - Australia's financial crime regulator has started civil penalty proceedings against Entain Group related to alleged contraventions of an anti-money laundering and counter-terrorism financing act. The Australian Transaction Reports and Analysis Centre (AUSTRAC) said on Monday that it found "systemic failures" in the company's approach to its AML/CTF obligations, such as not having adequate controls to confirm customers' identities and not conducting appropriate checks on higher-risk customers.

This is the first time AUSTRAC has brought civil penalty proceedings against a business operating in the online betting sector.

"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. We are alleging this left the company at serious risk of criminal exploitation," said AUSTRAC chief executive Brendan Thomas.

Entain, which operates out of Australia and New Zealand through the Ladbrokes, Neds, Entain Venues, TAB and Trackside brands, said it takes the allegations "extremely seriously", and has co-operated fully with AUSTRAC throughout its investigation, which started in September 2022.

However, the company said that, judging by the fines handed out for similar cases in the past, the investigation "may result in a penalty being levied which could be potentially material". Proceedings in the Federal Court of Australia may take some time, it said.

Back in 2023, a $450m fine was handed out to casino operator Crown for breaches of AML/CTF laws, which had to be paid out over a two-year period, while SkyCity Adelaide was ordered to pay a $63m penalty in June.

In December 2022, Entain started a programme to improve anti-money laundering and counter-terrorist financing systems and processes at its Australian subsidiary, which is expected to complete in June 2025.

"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," said Entain's chief executive Gavin Isaacs.

"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."