Entain and its Australian betting brands Ladbrokes and Neds are facing legal action in Australia for allegedly breaching money laundering and counter-terrorism financing laws.

The Australian Transaction Reports and Analysis Centre (AUSTRAC) has started Federal Court proceedings against Entain over what it terms as ‘serious non-compliance’, raising concerns about the company’s risk management systems and their failure to meet regulatory obligations.

According to AUSTRAC’s statement, Entain is alleged to have failed to:

1. Adopt Appropriate Risk Management Controls: Entain reportedly failed to adequately manage risks associated with money laundering and terrorism financing.
2. Conduct Sufficient Customer Due Diligence: AUSTRAC claims Entain neglected to conduct proper checks on 17 high-risk customers, leaving gaps in identifying and reporting suspicious activity.
3. Monitor and Report Suspicious Transactions: Entain allegedly fell short in its responsibility to monitor financial transactions for potential money laundering and other illicit activities.

AUSTRAC CEO Brendan Thomas said of the case:

“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.”

He went on to add:

“This is the first time AUSTRAC has brought civil penalty proceedings against businesses operating in the online betting sector, and the Australian arm of Entain is part of one of the world’s largest sports betting and gaming groups.

The online betting sector, and all other businesses regulated by AUSTRAC, must take their AML/CTF obligations seriously. This includes ensuring they have appropriate procedures to know who their customer is, even when they rely on third parties to process transactions.”

Entain’s Response

In response to AUSTRAC’s legal action, Entain has reiterated its commitment to compliance with Australian regulations. The company stated that it takes its obligations seriously and has invested heavily in improving its AML/CTF systems in recent years.

A spokesperson for Entain commented: “We acknowledge AUSTRAC’s concerns and will continue working closely with regulators to ensure we meet all legal and regulatory requirements.”

While Entain is expected to defend itself in court, the proceedings will place intense scrutiny on the company’s systems and controls, as well as its corporate governance.

Entain’s Previous Breaches in Australia

The current AUSTRAC proceedings are not the first time Entain or its brands have faced scrutiny in Australia.

1. 2019 Ladbrokes AML Warning: In 2019, Ladbrokes, one of Entain’s primary brands, received warnings from Australian regulators over deficiencies in its anti-money laundering processes. At the time, regulators urged the company to strengthen its risk assessment and monitoring systems to prevent illicit activities.
2. Northern Territory Licensing Breaches (2021): In 2021, Entain’s Australian operations came under review by the Northern Territory Racing Commission (NTRC), which questioned the company’s adherence to licensing conditions. Although no significant penalties were issued, the incident highlighted ongoing compliance concerns.
3. 2022 Inquiries into Betting Limits and Customer Protection: Entain faced further scrutiny in 2022 amid inquiries into how betting operators managed customer protections and betting limits. The inquiries focused on whether operators, including Entain, complied with responsible gambling guidelines designed to protect Australian consumers.
4. 2023 Ladbrokes Fined for AML Breaches: Ladbrokes fined AU$80,000 (€50,000) by the Northern Territory Racing Commission (NTRC) for allowing a fraudster to gamble with stolen money.
5. 2023 Ladbrokes and Neds Warned and then Fined by ACMA: The Australian Communications and Media Authority (ACMA) found that Ladbrokes, and Neds breached online gambling regulations relating to in-play betting. It then fined Entain for another breach of the same rules.

Olivia Richardson

Olivia has worked as an editor and writer for major brands across multiple niches. She now focuses on the iGaming and sports betting industries.