Allegations that Entain brands Ladbrokes and NEDs failed to comply with regulations have prompted a probe in Australia.
The operator is accused of “serious and systemic non-compliance” with regulations pertaining to counter-terrorism funding and anti-money laundering (AML/CTF).
“We allege that Entain failed to develop and maintain a compliant anti-money laundering program and did not adequately identify or assess the risks it faced,” said Brendan Thomas, CEO of AUSTRAC. This thus exposed the business to significant dangers of illegal exploitation.
According to the watchdog, Entain’s brands are susceptible to illegal exploitation, including as corruption, fraud, and frauds. Among the accusations made against Entain are:
• Inadequate board and senior management monitoring of the company’s AML/CTF program.
• Because Entertaine operates a round-the-clock online platform that is accessible by unidentified individuals and third-party suppliers, its Australian brands are at danger.
• Third parties accepting cash deposits for betting accounts, which raises the possibility of money laundering.
• A number of clients, including 17 higher-risk people, had their identities and financial sources not verified.
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According to other accusations, Entain may have concealed illegal activities by purposefully hiding the identity of high-risk clients by permitting the use of pseudonyms in the sake of preserving their privacy.
“The Australian division of Entain is a part of one of the biggest sports betting and gaming groups in the world, and this is the first time AUSTRAC has brought civil penalty proceedings against companies operating in the online betting sector,” Brendan Thomas stated.
“The AML/CTF responsibilities of the online betting industry and all other AUSTRAC-regulated enterprises must be taken very seriously. This includes making sure companies have the right processes in place to identify their clients, particularly in cases where they depend on other parties to handle transactions.
The Federal Court, which will decide whether Entain breached the AML/CTF Act and apply any necessary sanctions, will be presented with the results of AUSTRAC’s investigation. AUSTRAC would not comment more while the case is pending, emphasizing how crucial it is for companies to have strong client identification procedures and efficient risk management in order to prevent money laundering in Australia’s gaming sector.
As part of its ongoing efforts to stop money laundering, AUSTRAC is focusing more intently on the casino sector. This comes after major fines, such as the $63 million SkyCity paid this year for violations of the AML/CTF Act and the $450 million Crown was ordered to pay over two years in 2023 by the Federal Court.
The Entain board recognized that AUSTRAC had filed a civil penalty lawsuit against its Australian business before the Federal Court. The FTSE-listed company insists that since the start of the inquiry in September 2022, it has provided AUSTRAC with complete cooperation. Additionally, it has started a campaign to improve its AML/CTF procedures and systems.
“We have fully cooperated with AUSTRAC throughout its investigation, and we are implementing further enhancements to Entain Australia’s AML and CTF compliance arrangements,” stated Gavin Isaacs, CEO of the Entain Group.
“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,” the statement reads, adding that although there are still some improvements to be made, they should be implemented in accordance with the plan we communicated to AUSTRAC in 2023.
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