Unlock Editor’s Digest for free
FT editor Roula Khalaf has chosen her favorite stories in this weekly newsletter.
Australia’s financial crime watchdog has launched legal action against Ladbrokes owner Entain, citing “serious and systematic non-compliance” with anti-money laundering rules.
The Australian Trade Reporting and Analysis Center (Austrac) said on Monday that the FTSE 100 group had failed to identify and assess anti-money laundering risks. It added that this is the first time the regulator has brought civil penalty proceedings against an online gambling company.
Mr Austrak said the company, which operates in Australia as Neds & Ladbrokes, created a risk that individuals unfamiliar with the company could access and use its betting platform, including through third-party providers.
Following an investigation that began in 2022, regulators alleged that Entain did not have adequate controls in place to verify the identity of customers who made these deposits and the source of their funds. Entain shares fell 3% in early trading in London.
Austrak added that the gambling company had failed to properly screen 17 high-risk customers and had not addressed the risk that its site could be misused and criminal proceeds spent in such cases. Entain “intentionally concealed the identities of some high-risk customers on its systems by using pseudonyms to ‘protect their privacy,'” the lawsuit said.
Entain said it had “fully co-operated” with Austrac throughout the investigation and warned that the consequences of legal action “could result in significant fines”.
“We have brought the allegations to our attention and we take them extremely seriously,” said Gavin Isaacs, Entain’s chief executive who took over in September.
The Federal Court of Australia will decide whether Entain breached money laundering and risk laws and what penalties should be imposed.
The civil suit is the latest blow for Entein, which last year was investigated by Revenue and Customs authorities and, as part of a deferred prosecution agreement, was awarded 600 million yen in compensation for failing to stop bribery at a former Turkish subsidiary. They agreed to pay £15 million. As a result, it suffered a loss of £879m last year.
It was also ordered to pay £17m in 2022 for failings to fight money laundering in the UK as part of the Gambling Commission’s biggest ever enforcement action.
Austrac has cracked down on Australia’s lax gambling sector and money laundering regulations, drawing much attention to Australia’s once-thriving casino sector.
Crown Resorts, which was sold to Blackstone, paid a A$450 million (US$290 million) fine for violating anti-money laundering laws, but a separate case against Star Entertainment is ongoing. A third casino group, Sky City, also paid a A$63 million penalty over similar issues.