Entain Accused of Neglecting Money Laundering Red Flags in Australia

The parent company of Ladbrokes and Neds, Entain, is facing scrutiny in Australia, where the body responsible for preventing, detecting and responding to criminal abuse of the financial system, the Australian Transaction Reports and Analysis Centre (AUSTRAC), claims the company systemically breached the country’s anti-money laundering (AML) laws and failed to conduct proper checks for more than a dozen of its highest-spending customers.

AUSTRAC Claims Breaches to AML, CTF Regulations, Insufficient Supervision

It was back in December when AUSTRAC initiated civil penalty proceedings against London-listed Entain, which operates Neds, Ladbrokes and other online betting brands in Australia and has a market share of approximately 17%. Per the regulatory body’s announcement, the lawsuit filed in the Federal Court, alleges “serious and systemic non-compliance with Australia’s anti-money laundering and counter-terrorism financing (AML/CTF) laws.”

On Tuesday of this week, the Australian Financial Review released new details regarding the alleged breaches by Entain. AUSTRAC’s legal claim is described in a document with more than 640 pages where more than a dozen cases of alleged breaches are outlined.

The parent company of the popular betting and gaming brands is accused not only of AML and CTF breaches but also poor supervision of a minimum of 17 of its highest-spending customers. The sum involved in transactions by individuals, some of which were allegedly involved in criminal activities such as drug trafficking, was the mind-blowing AU$152 million ($95.8 million).

Allegedly, the money deposited and withdrawn by those customers were “materially above average total annual deposits and withdrawals for Entain’s customers.” AUSTRAC’s court documents further allege that a “pattern of large amounts of money being regularly moved … on an ongoing basis is not consistent with the transactional activity of an average gambler and involves heightened money laundering and terrorism finance risk.”

The Regulatory Body Describes Several Cases of Suspected Insufficient Checks

In the court documents, the identities of the players with heightened risk were redacted. Still, AUSTRAC described several cases where customers spent significant sums, but their sources of funds were not scrutinized.

In one case, a client referred to as “Customer 7” spent AU$20.2 million ($12.7 million) between 2015 and 2022 via Neds and Ladbrokes. Per the regulatory body’s lawsuit, despite that customer being a drug trafficking convict, Entain allegedly failed to properly check his source of funds for years until August 2021.

In another case, a client referred to as “Customer 17” in the court documents spent AU$30.8 million ($19.4 million). The person gambled with Ladbrokes for five years and was depositing AU$1 million ($630,000) per month at some point.

According to AUSTRAC’s lawsuit, Entain was notified that the customer’s source of funds was many “speculative investments.” However, the customer never verified the aforementioned “speculative investments,” and when they were asked about specific details, they said this was “private” information.