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AUSTRAC alleges AML breaches by Ladbrokes, Neds operator

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AUSTRAC - Entain Group
AUSTRAC has commenced civil penalty proceedings in the Federal Court against Entain Group Pty Ltd, operator of two of the top Australian bookmakers, Ladbrokes and Neds, for alleged systemic violations of Australia’s anti-money laundering and counter-terrorism financing (AML/CTF) laws.

The regulator claims the company failed to address critical risks, leaving its platforms vulnerable to criminal exploitation.

Key Allegations Against Entain:

  • Failure of Oversight: AUSTRAC accuses Entain’s board and senior management of neglecting to properly oversee its AML/CTF program, undermining its ability to address risks of money laundering and terrorism financing.
  • Online Vulnerabilities: The company’s 24/7 online operations allegedly enabled unidentified individuals to exploit the platform through third-party providers.
  • Third-Party Cash Risks: AUSTRAC claims third parties, including businesses and individuals, accepted cash deposits on Entain’s behalf, obscuring the origin of funds and heightening money laundering risks.
  • Weak Identity Verification Controls: The regulator alleges insufficient controls to verify customer identities and assess the sources of deposited funds.
  • Inadequate High-Risk Customer Checks: Entain is accused of failing to perform due diligence on 17 high-risk customers, exposing the platform to potential criminal exploitation.
  • Deliberate Obscuring of Identities: AUSTRAC claims Entain used pseudonyms in its systems to conceal the identities of high-risk customers, purportedly to “protect their privacy.”

    • AUSTRAC CEO Brendan Thomas emphasised the seriousness of the allegations, stating, “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.”

    He continued, “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.”

    The case marks the first time AUSTRAC has initiated civil proceedings against a business in the online bookmaker sector.

    It follows hefty penalties for other gambling entities, including $450 million against Crown Resorts and $63 million against SkyCity, with ongoing cases against The Star Entertainment Group.

    AUSTRAC’s 2024 National Risk Assessment flagged online betting apps and platforms as high-risk environments for criminal activity, aiming to help businesses mitigate these vulnerabilities.

    The Federal Court will determine whether Entain breached the AML/CTF Act and decide the applicable penalties. Non-confidential court documents will be accessible via AUSTRAC’s enforcement actions page.

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    Topics: AUSTRAC, Entain, Featured, Ladbrokes, Neds

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