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Australia’s financial crimes watchdog has taken legal action against Ladbrokes owner Entain for “serious and systematic non-compliance” with anti-money laundering rules.
The Australian Transaction Reports and Analysis Center (Austrac) said on Monday the FTSE 100 group had failed to identify and assess anti-money laundering risks. It is the first time the regulator has initiated civil penalty proceedings against an online gambling company, it added.
Austrac said the company, which operates in Australia as Neds and Ladbrokes, created risks that people unknown to the company could access and use the gambling platform, including through third-party providers.
Entain did not have proper controls in place to confirm the identities of customers making these deposits and the source of these funds, the regulator alleged, following an investigation launched in 2022. Shares in Entain fell 3 percent in early trading in London.
Austrac added that the gambling company failed to implement appropriate checks on 17 high-risk customers and failed to deal with the risk that its sites could be exploited to spend the proceeds of crime in those cases. It alleged that Entain “intentionally obscured the identities of some high-risk customers on its own systems through the use of pseudonyms to ‘protect their privacy’.”
Entain said it was “fully cooperating” with Austrac during the investigation and warned that the outcome of the legal action could result in a penalty that “could potentially be material.”
“We note the allegations made, which we take extremely seriously,” said Entain CEO Gavin Isaacs, who took on the role in September.
The Federal Court of Australia will determine whether Entain breached the laws relating to money laundering and risk and what penalties should be imposed.
The civil action is the latest blow to Entain, which last year agreed to pay £615 million in compensation for failing to prevent bribery at its former Turkish subsidiary as part of a deferred prosecution agreement, following an investigation by HM Revenue & Customs. That resulted in a loss of £879 million last year.
It was also ordered to pay £17 million by 2022 for anti-money laundering failures in Britain, as part of the Gambling Commission’s largest ever enforcement action.
Austrac has cracked down on Australia’s gambling sector and lax controls over money laundering, with much of the focus on the once booming casino sector.
Crown Resorts, which was sold to Blackstone, paid a A$450 million (US$290 million) fine for breaching anti-money laundering laws, while a separate case against Star Entertainment is ongoing. A third casino group, SkyCity, has also paid a A$63 million fine for similar issues.