Sports betting firms await findings of AUSTRAC investigation

February 20, 2024 11:52 am.by Staff Writer

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Australia’s premier sports gambling companies, including Sportsbet, Ladbrokes, and Bet365, are bracing themselves for a potential reckoning as the Australian Transaction Reports and Analysis Centre (AUSTRAC) nears the conclusion of its investigation into suspected breaches of money-laundering laws.

This inquiry, initiated in late 2022, holds significant implications for the future regulatory landscape of the sports betting industry, amid mounting calls for stricter oversight and even a complete ban on gambling advertisements.

A spokesperson from AUSTRAC confirmed that the agency had received independent audits highlighting suspected non-compliance within these major gambling entities.

The investigation was prompted by an extensive supervisory campaign aimed at scrutinising the financial operations of these major online bookmakers.

Dr Jamie Ferrill, an authority on financial crimes at Charles Sturt University, emphasised the gravity of money laundering within the online gambling sector, cautioning that regulatory consequences could be imminent.

“It will likely shine a spotlight on some of the weaknesses or loopholes in their AML/CTF (anti-money-laundering and counter-terrorism financing) programs and perhaps other areas of their operations,” Ferrill said.

“It will likely result in initial increased costs to improve their programs and clamp down on illicit activity – but that needs to be the cost of doing business.”

Companies operating in this space are mandated to diligently assess customers and monitor financial transactions to detect and prevent potential money laundering or terrorism financing activities.

Failure to adhere to these obligations could result in severe penalties.

Anton Moiseienko, a money-laundering expert at the Australian National University, underscored the vulnerability of the online gambling industry to illicit activities.

His research revealed that some companies have inadequately fulfilled their regulatory obligations, leaving gaps that could be exploited by criminals seeking to launder illicit funds or utilise stolen credit card information.

“We’re not talking about controls being defeated by some sophisticated attempts at money laundering,” Moiseienko said.

“The failings in that context are pretty basic most of the time.”

In response to the escalating threat posed by money laundering within the gambling sector, AUSTRAC established a specialised unit dedicated to addressing these concerns.

The move underscores the recognition within regulatory circles that the industry represents a high-risk environment susceptible to financial crimes.

Former AUSTRAC chief executive Nicole Rose emphasised the broader societal implications of enforcing compliance within the gambling industry.

She highlighted the pivotal role businesses play in curbing money laundering, citing its ties to organised crime and the resultant harm inflicted on communities.

Sportsbet, Bet365, and Ladbrokes’ parent company, Entain, have previously expressed their commitment to collaboration with AUSTRAC and their dedication to upholding anti-money laundering regulations.

The spectre of AUSTRAC’s investigation evokes memories of Tabcorp’s historic $45 million fine in 2017 for lapses in reporting suspicious activities related to money laundering and credit card fraud.

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