Online betting giant Entain tries to settle blockbuster case brought by financial crimes cop

Entain, which owns online betting platforms Ladbrokes and Neds, is hoping to nip an anti-money laundering case brought against it last year in the bud.

The gambling giant who owns online betting platforms Ladbrokes and Neds is trying to settle a blockbuster case launched against it by Australia’s financial crimes cop.

It could scupper an enforcement run-on-the-board for Australian Transaction Reports and Analysis Centre chief executive Brendan Thomas, whose agency alleged last year Entain Group breached anti-money laundering and counter-terrorism financing laws.

During a brief hearing on Friday, the Federal Court heard Entain and Austrac are working with a “leisurely mediation timetable”.

Austrac CEO Brendan Thomas.

“(The) theory is that the respondent (Entain) will come to mediation with what … (a) settlement might look like. There is a huge amount of work to be done by the respondent in light of the magnitude of the (case),” barrister appearing for Austrac, Kate Morgan SC said.

For Entain, Ruth Higgins SC told the court her client was undertaking a “very substantial” amount of work to respond to the case.

She said Entain could obtain a settlement, but if mediation fails the parties could move to a conflict and Entain would need to put on a defence to the allegations it is facing.

Several gambling sources have claimed Entain has offered a sum believed to be as high as $300m to settle the case.

Austrac has previously denied the offer was made, and on Friday a spokesman for Entain said no offer has been made.

For Austrac, Ms Morgan said if the parties don’t settle, experts will put on evidence about what Entain needed to do to manage money laundering risks and what they allegedly failed to do.

The court heard a 269-page statement of claim has been filed, and there are “multiple” case studies included in the case.

A spokesman for Austrac would not comment on the possible settlement.

“The Entain civil penalty proceedings follow an in depth investigation by AUSTRAC and a broader industry compliance campaign focused on online bookmakers,” he said.

“While the matter is before the court, AUSTRAC will not comment further.”

Interim Entain CEO Stella David said Entain is taking the allegations seriously and continue to cooperate 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,” she said.

In December, Mr Thomas said there were “systemic failures” in Entain’s approach to anti-money laundering and counter-terrorism financing rules.

“This is the first time Austrac has brought civil penalty proceedings against businesses operating in the online betting sector, and the Australian arm of Entain is part of one of the world’s largest sports betting and gaming groups,” Mr Thomas said.

“The online betting sector, and all other businesses regulated by Austrac, must take their (anti-money laundering and counter-terrorism financing) obligations seriously,” he said.

“This includes ensuring they have appropriate procedures to know who their customer is, even when they rely on third parties to process transactions.”

Mr Thomas said Austrac’s proceedings allege 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 said.

“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.”

Austrac has alleged Entain’s board and senior management did not have oversight of its anti-money laundering and counter-terrorism financing program which limited its ability to identify risks and made it vulnerable to criminal exploitation.

As well, Austrac claimed businesses and individuals accepted cash and other deposits on behalf of Entain to be credited into betting accounts which could obscure the proceeds of crime.

Further, it is alleged Entain did not conduct appropriate checks on 17 “higher risk customers”, including examples where Entain did not deal with risks that its online betting sites were being exploited by criminals to spend the proceeds of serious crime.

This includes allegations that Entain deliberately obscured the identity of some high risk customers, on its own systems, through the use of pseudonyms to “protect their privacy”.

Originally published as Online betting giant Entain tries to settle blockbuster case brought by financial crimes cop