Ladbrokes and Neds: Business behind gambling sites in Federal Court fight with AUSTRAC

Australia’s financial crimes watchdog is taking a top online betting business to the Federal Court for alleged money laundering failures.

The Australian Transaction Reports and Analysis Centre revealed on Monday that it has launched civil legal action against the local division of London-based Entain PLC.

Entain is the business behind gambling sites Ladbrokes and Neds.

AUSTRAC is set to claim Entain “serious and systemic non-compliance with Australia’s anti-money laundering and counter-terrorism financing laws”.

“(The) 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,” AUSTRAC chief executive Brendan Thomas said.

“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.”

That comes more than two years after the watchdog commenced an investigation into the business.

Scrutiny over Entain’s compliance in 2022 also poured cold water on the company’s hopes of buying Western Australia’s TAB licence, when the State Government was pursuing privatisation of the bookmaker.

The regulator will claim that Entain’s board and senior management did not have sufficient oversight over compliance, and the business did not have proper controls to confirm customer identity.

But the allegations go further.

AUSTRAC claims Entain did not “not conduct appropriate checks on 17 higher risk customers” and that “Entain deliberately obscured the identity of some high risk customers, on its own systems, through the use of pseudonyms to protect their privacy”.

Entain chief executive Gavin Isaacs said the company takes the allegations “extremely seriously”.

“We have co-operated fully with AUSTRAC throughout its investigation and we are implementing further enhancements to Entain Australia’s AML and CTF compliance arrangements,” he said.

“Whilst we still have some further improvements to make, we expect these to be implemented in line with the plan we communicated to AUSTRAC in 2023.

“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 business reckons it co-operated fully with AUSTRAC’s investigation.

But Entain is not the first big betting company to get the watchdog barking.

Casino operator Crown was forced to pay a huge $450 million penalty by the Federal Court in 2023 for breaches of money laundering rules.

Tabcorp was hit with a $45m Federal Court smack in 2017.

Sportsbet inked an enforceable undertaking with AUSTRAC in May, pledging to sharpen up compliance.

The regulator has also kept a close eye on the State Government’s Gold Corporation — operator of the Perth Mint — with an enforceable undertaking running until April next year.

The Mint was accused of more than 3,000 breaches.