Tabcorp accused by AUSTRAC of noncompliance on money launder

Betting giant Tabcorp has been hit with legal action for ­alleged noncompliance with money laundering rules.

Betting giant Tabcorp has been hit with legal action by the financial intelligence agency for ­alleged noncompliance with rules designed to stop money laundering and terrorism financing.

Paul Jevtovic, chief executive of the Australian Transaction ­Reports and Analysis Centre, said the action taken against Tabcorp and its NSW and Victorian ­wagering businesses related to “extensive, significant and systemic” noncompliance.

“This action follows a long and comprehensive process of assessment by AUSTRAC of the Tabcorp companies’ anti-money laundering and counter-terrorism financing compliance,” he said. “AUSTRAC has provided a number of opportunities for these companies to improve their standards and compliance, however they have failed to take the necessary steps. Noncompliance of this nature provides opportunities for organised crime to exploit vulnerabilities and puts at risk the integrity of the Australian financial system.”

Shares in Tabcorp, one of the world’s largest publicly listed gaming companies, took a hit yesterday as news of the court action, which carries a maximum penalty of $17 million, was digested, falling 4.21 per cent to $4.77.

Tabcorp is being taken to task for a failure of its systems, with the level of due diligence on its customers being questioned. The statement of claim filed in the Federal Court in NSW on Tuesday outlined a long list of credit-betting incidents, credit card fraud related to online gambling and millions of dollars worth of business with customers identified as “high risk”.

The claims also cover the 2010 NRL betting scandal, which involved illegal betting ­activity on a match between the Cowboys and Bulldogs. The bulk of the civil ­action covers “credit betting incidents”, where a Tabcorp agent has approved a line of credit, which is illegal, to a customer. AUSTRAC’s issue with these incidents is they were not lodged with the agency in the time required under the legislation.

Tabcorp, which manages TAB, Luxbet, Sky Racing and Sky Sports Radio, said that it took its compliance obligations seriously. “Tabcorp is reviewing the nature of the proceedings and will inform the market of its intended response,” the company said.

Victoria’s gambling regulator has launched its own inquiry into the claims, seeking further information from Tabcorp about the nature of the allegations.

A spokeswoman said the Victorian Commission for Gambling and Liquor Regulation would also monitor any outcomes of the Federal Court proceedings.

NSW Police and Justice Minister Troy Grant said he had asked for a briefing on the matter.

The statement of claim alleges that over a two-year period one address in Guildford, NSW, was used to open about 31 TAB ­accounts, with fraudulent credit card deposits and fake names used on most of those ­accounts. There was also an allegation of more than $9m of designated services, which refers to bets made and winnings received, provided to “persons” at a Campsie, NSW, address, including to a person previously identified by Tabcorp as “high risk”.

Mr Jevtovic said the agency worked to keep dirty money out of the financial system, which helped protect the community from serious and organised crime.

Additional reporting: Christine Lacy