Gambling industry giant Entain said Dec. 16 it was facing a "potentially material" penalty after Australia's financial crime watchdog launched legal proceedings against the company.
The Australian Transaction Reports and Analysis Centre (Austrac) proceedings against Entain, which follow an investigation that started in September 2022, allege "serious and systemic" non-compliance with Australia's anti-money laundering and counter-terrorism financing (AML/CTF) laws.
Austrac's allegations include that Entain's board and senior management did not have appropriate oversight of its AML/CTF program, which left it vulnerable to "criminal exploitation".
It also alleges that Entain did not conduct appropriate checks on 17 higher-risk customers and that it deliberately obscured the identity of some high-risk customers on its own systems through the use of pseudonyms to "protect their privacy".
Austrac chief executive Brendan Thomas said: "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.
"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."
In a statement, Entain, which operates the Ladbrokes and Neds brands in Australia, said it had co-operated fully with Austrac throughout its investigation and that a program of enhancements to its AML and CTF systems was due to be completed in June 2025.
The company added that while the outcome of the action against its Australian arm was uncertain, "it may result in a penalty being levied, which could be potentially material".
Gavin Isaacs, who took over as chief executive of Entain in September, added: "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 and CTF compliance arrangements.
"While 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."
Last year, Entain paid a total of £615 million in penalties, charitable donations, and costs following the conclusion of a long-running investigation by HMRC into bribery claims surrounding a Turkish-based business owned by Entain's predecessor, GVC Holdings.
