AUSTRAC accuses Entain of failing to stop $152M in suspicious gambling activity
AUSTRAC, the Australian financial crime watchdog, has called out London-listed Entain for allegedly repeatedly dropping the ball when it comes to anti-money laundering rules. According to the Australian Transaction Reports and Analysis Centre, Entain did not put proper checks in place to see how some of its top customers were funding their multi-million dollar betting habits year after year.
New court filings revealed numerous cases of suspicious activity, including millions of dollars moving in and out of customer accounts between 2019 and 2022.
AUSTRAC took things to court back in December, accusing Entain of what they called “serious and systematic” failures to comply with anti-money laundering and counter-terrorism financing laws. At the time, Entain admitted it might be hit with a hefty fine once everything plays out.
AUSTRAC has commenced proceedings against Entain Group Pty Ltd, which operates online betting sites including Ladbrokes and Neds, to the Federal Court for alleged serious and systemic non-compliance with Australia’s AML/CTF laws.
Read more: https://t.co/L87BZFIzu1 pic.twitter.com/WlBI8i7gW4
— AUSTRAC (@AUSTRAC) December 16, 2024
The case, which was filed with the Federal Court in New South Wales, points to a number of issues tied to four customer accounts spread across Entain’s different brands. These details just became public on March 31.
AUSTRAC submitted more than 640 pages outlining how Entain’s board and senior executives may have put not just the company, but even their banking partners, at risk through years of compliance failures.
AUSTRAC claims Entain allowed criminal activity on platformAccording to AUSTRAC’s claim, Entain’s lack of proper oversight opened the door to potential money laundering risks involving at least 17 customers and $152 million.
In some cases, the customers used pseudonyms or funneled money through third parties. AUSTRAC stated: “Entain accepted deposits of money to be credited into betting accounts in ways and in forms that could obscure the identity of the depositor or the source of money.”
AUSTRAC also raised concerns about how Entain handled payments, saying the company took in money from sources it couldn’t properly trace or verify. It also accused Entain of not doing enough to keep an eye on transactions or assess the risks tied to its customers.
The document claims that Entain allowed customers “repeatedly displaying suspicious
behaviour to continue to hold accounts.”
According to the watchdog, these gaps in oversight created a system that was easy for people to take advantage of. And because these issues went on for years and affected multiple brands under Entain, the agency believes the company knew there were problems but failed to fix them.
One of the high-risk customers flagged by AUSTRAC was identified as Customer E15. In January 2022 alone, the individual deposited over $276,000 into their Ladbrokes betting account, which was more than double their usual monthly average. Over $105,000 of that was deposited using payment methods that may have involved cash, increasing the risk of money laundering.
That same month, the customer also withdrew nearly $293,000, showing a clear pattern of cycling large sums of money in and out of the account. AUSTRAC pointed out that this type of behavior should have raised red flags, but Entain failed to adequately monitor or investigate the activity.
Drug money allegationsThe statement of claim also includes serious concerns about connections between certain customers and drug-related criminal activity.
For instance, one customer, whose identity is redacted, had been convicted of violent criminal conduct linked to drug disputes. According to the statement, Entain had access to open-source media reports which indicated this person had held someone at gunpoint to extract information about another man who owed him and a second person money from a drug deal. Despite this, there was no evidence Entain adequately addressed these red flags or adjusted their risk assessments accordingly.
The body is now going after Entain with civil penalties. Each alleged breach could come with a fine ranging from $21 million to $33 million.
Entain has admitted the allegations are serious and says it’s working with AUSTRAC to sort things out and strengthen its internal checks.
Stella David, interim CEO of Entain, stated: “We are taking these allegations extremely seriously and continue to fully co-operate with AUSTRAC.
“We are committed to keeping financial crime out of gambling and continue to play our part in supporting a well-regulated and compliant sector for our customers, stakeholders and the wider community.”
Featured image: Entain / Canva
The post AUSTRAC accuses Entain of failing to stop $152M in suspicious gambling activity appeared first on ReadWrite.