Entain Hit With Civil Penalty Proceedings in Australia

The Australian Government agency responsible for deterring, detecting and disrupting financial crimes and organized criminal activities, AUSTRAC (the Australian Transaction Reports and Analysis Centre), announced it initiated civil penalty proceedings against a recognizable betting and gaming operator.

The Agency Claims Entain Breached AML, CTF Regulations

On Monday, the agency confirmed that Ladbrokes and Neds’ operator and global gaming and betting company, Entain Group Pty Ltd, is subject to civil penalty proceedings in Federal Court. AUSTRAC said that the legal action comes after it uncovered alleged “systemic” non-compliance by the company with the country’s laws on counter-terrorism financing (CTF) as well as anti-money laundering (AML) regulations.

Allegations against Entain claim that the company “created risks” after enabling unknown individuals to access its gambling platform which operated 24/7. To exacerbate things further, Entain allegedly granted access to its platform via third-party providers. The aforementioned third-party providers, allegedly “accepted cash and other deposits on behalf of Entain to be credited into betting accounts in ways that could obscure the proceeds of crime,” the regulatory body in Australia explained.

AUSTRAC also alleges that Entain did not have sufficient know-your-customer policies which prevented the company from effectively identifying the identities of its customers and uncovering the source of the customers’ funds. “Entain’s board and senior management did not have appropriate oversight of its AML/CTF program, which limited its ability to identify the ML/TF risks it faced and its vulnerability to criminal exploitation,” the agency claimed.

Another allegation by AUSTRAC claimed insufficient checks for a total of 17 “higher-risk customers.” Per the agency’s announcement, the leading betting and gaming company allegedly failed to appropriately address the risk of its websites being exploited by criminal organizations or criminals who may spend money derived from unlawful activities. Allegedly, some of those higher-risk customers’ identities was “deliberately obscured” with the use of pseudonyms.

The Betting Failed to Identify and Assess the Potential Risks It Faced

Brendan Thomas, AUSTRAC’s CEO, said this case marks the first civil penalty against an online gambling operator in the country. He acknowledged that although it has an Australian-facing operation, Entain is a recognizable betting and gaming company that also operates across the globe.

Thomas spoke about the importance of adhering to AML and CTF policies. “This includes ensuring they have appropriate procedures to know who their customer is, even when they rely on third parties to process transactions,” he added.

“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.“

Brendan Thomas, CEO at AUSTRAC

Focusing on the allegations against Entain, Thomas explained that AUSTRAC alleges the company wasn’t able to successfully mitigate risks it may be facing when it comes to money laundering. This, according to the agency, left it at risk of exploitation by criminal organizations, Thomas added.

Finally, the executive pointed to the destructiveness of money laundering, confirming that it is often tied to other unlawful activities, including corruption, fraud and scams which have a negative impact on communities.