Action taken against Ladbrokes, Neds parent on money laundering, counter-terrorism breaches

Financial crimes regulator Austrac is taking Federal Court action against Entain Group for alleged breaches of anti-money laundering and counter-terrorism financing laws.

Entain operates high-profile online wagering sites Ladbrokes and Neds.

The financial crimes regulator is suing Entain Group, the owner of Ladbrokes and Neds, for alleged breaches of anti-money laundering and counter-terrorism financing laws.

Austrac on Monday alleged there had been systemic failures in Entain’s approach to its various money-laundering obligations for its online betting platforms, resulting in the decision to launch legal action in the Federal Court.

“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,” Austrac chief executive Brendan Thomas said.

“We are alleging this left the company at serious risk of criminal exploitation. Money laundering is often a symptom of serious criminal activity, including fraud, scams and corruption.”

The regulator’s allegations include that Entain’s board and senior management did not have appropriate oversight of its anti-money laundering and counter-terrorism financing laws. Its initial investigation into Entain was announced in September 2022.

Entain operated a 24/7 business through its website and app, which created risks that people unknown to Entain could access and use its betting platform, including through third-party providers. Third parties, such as businesses and individuals, accepted cash and other deposits on behalf of Entain to be credited into betting accounts in ways that could obscure the proceeds of crime.

Cash is less transparent than other forms of money and is at higher risk of being the proceeds of crime. Austrac said Entain did not have appropriate controls to confirm the identity of customers making these deposits and the source of this money.

Entain did not conduct appropriate checks on 17 higher-risk customers, including examples where Entain did not appropriately deal with the risk that its online betting sites were being exploited by criminals to spend the proceeds of serious crime, Austrac said.

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”.

Mr Thomas said this was the first time Austrac had brought civil penalty proceedings against businesses operating in the online betting sector.

Entain chief executive Gavin Isaacs said took the allegations made by Austrac “extremely seriously”.

“We have co-operated fully with Austrac throughout its investigation and we are implementing further enhancements to Entain Australia’s compliance arrangements,” he said.

“Whilst we still have some further improvements to make, we expect these to be implemented in line with the plan we communicated to Austrac in 2023.”

He said Entain was 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”.