Entain Faces Investigation Over Serious Anti-Money Laundering Breaches in Australia

Entain, along with its Australian betting brands Ladbrokes and Neds, is under legal scrutiny in Australia for alleged breaches of anti-money laundering (AML) and counter-terrorism financing (CTF) laws.

The Australian Transaction Reports and Analysis Centre (AUSTRAC) has initiated Federal Court proceedings, citing “serious non-compliance” and raising concerns about Entain’s risk management systems and failure to meet regulatory obligations.

Allegations Against Entain

AUSTRAC alleges that Entain failed in several key areas:

1. Risk Management Controls: Lacking adequate measures to manage money laundering and terrorism financing risks.
2. Customer Due Diligence: Failing to properly assess and monitor 17 high-risk customers, resulting in gaps in identifying and reporting suspicious activity.
3. Suspicious Transaction Monitoring: Not sufficiently monitoring financial transactions for potential illicit activities.

AUSTRAC CEO Brendan Thomas commented:
“Entain failed to develop and maintain a compliant AML program, leaving it at risk of criminal exploitation. Money laundering often signals serious criminal activities like fraud, scams, and corruption, which impact our communities.”

This marks the first civil penalty proceedings by AUSTRAC against an online betting operator, underscoring the agency’s push for stricter compliance in the industry.

Entain’s Response

Entain has acknowledged AUSTRAC’s concerns and emphasized its commitment to regulatory compliance. The company stated that it has invested significantly in improving its AML/CTF systems in recent years.

A spokesperson for Entain said:
“We acknowledge AUSTRAC’s concerns and remain committed to working closely with regulators to ensure full compliance with all legal requirements.”

Previous Regulatory Issues

This is not the first time Entain has faced scrutiny in Australia.

• 2019 Ladbrokes AML Warning: Regulators flagged deficiencies in Ladbrokes’ AML processes, urging improvements in risk management.
• 2021 Northern Territory Licensing Breaches: Entain was reviewed for potential violations of licensing conditions.
• 2022 Responsible Gambling Inquiries: Authorities investigated compliance with responsible gambling guidelines.
• 2023 Ladbrokes Fined AU$80,000: A fine was issued for allowing stolen money to be used for gambling.
• 2023 ACMA Fines: Ladbrokes and Neds faced penalties for breaching in-play betting regulations.

Industry Implications

AUSTRAC’s action highlights the growing regulatory focus on the online betting sector. The case against Entain is expected to intensify scrutiny of AML/CTF compliance across the industry, pushing operators to enhance risk management and governance practices.

While Entain is prepared to defend itself in court, this legal battle may have significant consequences for its reputation and operations.