Australia’s financial watchdog has commenced civil penalty proceedings against the Entain Group, alleging ‘serious and systematic non-compliance with Australia’s anti-money laundering and counter-terrorism financing (AML/CTF) laws’.
The Australian Transaction Reports and Analysis Center (AUSTRAC) indicated on Monday that the proceedings commenced ‘today’.
The investigation was announced by AUSTRAC in September of 2022.
In the Monday release, AUSTRAC CEO Brendan Thomas noted that “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”.
Allegations include:
- Entain’s board and senior management ‘did not have appropriate oversight of its AML/CTF program’;
- Entain’s 24/7 business model meant that there were ‘risks that persons unknown to Entain’ could access and use its betting platform, ‘including third party providers’;
- Third parties ‘accepted cash and other deposits on behalf of Entain to be credited into betting accounts in ways that could obscure the proceeds of crime’;
- Entain lacked ‘appropriate controls to confirm the identity of customers’ both making deposits and the source of funds;
- Entain ‘did not conduct appropriate checks on 17 higher risk customers’, with allegations ‘Entain deliberately obscured the identity of some high risk customers […] through the use of pseudonyms’.
Speaking of the move, AUSTRAC’s CEO noted that “This is the first time AUSTRAC has brought civil penalty proceedings against businesses operating in the online betting sector”.
Thomas furthered that “The online betting sector, and all other businesses regulated by AUSTRAC, must take their AML/CTF obligations seriously”.
The matter will now proceed in the Federal Court of Australia, which will decide if Entain Australia violated the AML/CTF act and what potential action to be taken.
Entain acknowledged the civil penalty proceedings against its Australian subsidiary, noting that since December 2022 it has been making ‘further enhancements’ to its AML/CTF systems and processes – an initiative set to be completed in June of 2025.
Entain’s CEO, Gavin Isaacs, noted “We note the allegations made, which we take extremely seriously.
“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.”
Isaacs joined Entain as CEO in September of this year.
The group notes that the outcome of the civil penalty proceeding ‘is uncertain’ and could result in a penalty ‘which could be potentially material’.
The group indicated it expects the proceedings ‘may take some time’.
