AUSTRAC Announces Legal Action Against Entain Group Over AML Failures

The Australian Transaction Reports and Analysis Center (AUSTRUC) is pursuing civil penalty proceedings against Entain Group. This is the financial crimes regulator’s first civil penalty action against an online gambling company.

The global gambling operator, renowned for operating brands like Ladbrokes, Coral, and Ned in Australia, is being accused of “serious and systemic non-compliance” with the country’s anti-money laundering (AML) and counter-terrorism financing (CTF) laws. The watchdog alleges Entain failed to incorporate a compliant AML program, exposing the company to criminal exploitation.

Alleged Litany of Failings

AUSTRUC began investigations into Entain in September 2022 as one of several corporate bookmakers being reviewed. The agency underscored several concerns against the company, including:

• Entain’s board and senior management lacked appropriate AML/CTF program oversight.
• The company did not have adequate controls to complete KYC verifications and determine the source of players’ gambling funds.
• Customers could make deposits using third-party accounts, potentially obscuring the proceeds of crime.
• The operator did not run proper checks on 17 vulnerable customers.
• The company deliberately obscured the identities of some high-risk customers using pseudonyms.

Criminal Exploitation Risks

Brendan Thomas, AUSTRUC Chief Executive, explained that the case was concerning since Entain is one of the most prominent global sports betting and gaming companies. He emphasized that major operators must comply with set standards to secure customers and merchants.

“AUSTRUC’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,” Thomas stated. “We are alleging this left the company at serious risk of criminal exploitation. Money laundering is a symptom of serious criminal activity, including fraud, scams, and corruption, all of which have equally serious effects on our communities.”

Increased Regulatory Scrutiny

Entain is one of several gambling operators under AUSTRUC’s scrutiny for non-compliance. The agency has uncovered AML/CTF breaches by land-based casino operators, resulting in massive penalties. One such case is Crown Resorts, which had to pay an AU$2 million fine for responsible gambling failures.

Entain acknowledges that it could face a material penalty. The company noted in its response to the filing that court proceedings may take some time. Entain CEO Gavin Isaacs said, “We note the allegations made, which we take extremely seriously. We are committed to keeping financial crime out of gambling and continue to play our part in supporting a well-regulated and complaint sector for our customers, stakeholders and the wider community.”