Tabcorp facing $45m fine in settlement with Austrac

Tabcorp has agreed to a $45m fine by the financial intelligence agency over anti-money laundering failures.

Tabcorp CEO David Attenborough. Pic: Stuart McEvoy

Wagering giant Tabcorp is set to be hit with a $45 million fine in a case brought against it by Australia’s financial intelligence agency.

The Australian-listed company (TAH) has revealed the terms of a settlement with the Australian Transaction Reports and Analysis Centre, known as Austrac, which the parties now need the Federal Court to approve.

Tabcorp, which handles around 875 million bets each year on top of the other transactions, has agreed to the $45m penalty and also agreed to make several admissions of noncompliance with its anti-money laundering and counter-terrorism financing (AML/CTF) obligations under its old AML/CTF program. Austrac has said it will withdraw the remaining allegations of noncompliance.

“Tabcorp acknowledges that there were a number of deficiencies in its former AML/CTF program, which resulted in a serious contravention of the AML/CTF legislation,” the company said.

Tabcorp, which manages TAB, Luxbet, Sky Racing and Sky Sports Radio, is one of the world’s largest publicly listed gaming companies.

The Austrac case hit the company’s half-year profit, which the company revealed this month had fallen 28.1 per cent to $58.9 million.

Significant items registered by Tabcorp totalled $43.8m. Almost half went towards the Austrac case.

The company said today if the court agreed to orders sought it would recognise the $45m penalty as a significant item in its full-year results.

Austrac launched legal action against Tabcorp and its NSW and Victorian wagering businesses in July 2015. The agency said at the time that the action was taken after a comprehensive assessment of the Tabcorp companies’ compliance with anti-money laundering and counter-terrorism financing provisions.

The original statement of claim by ­Austrac had outlined a 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”.

Austrac amended its statement of claim against Tabcorp last April, adding further alleged contraventions under Tabcorp’s former anti-laundering program.

At the time the case was launched, ­Austrac chief executive Paul Jevtovic warned that noncompliance ­provided op­por­tunities for organised crime to exploit vulnerabilities and threatened the integrity of the Australian financial system.

Following the Austrac action, Tabcorp appointed a new chief risk officer, for the first time. Clinton Lollback was recruited from a similar job at Macquarie to join Tabcorp earlier last year.

The company also adopted a new anti-laundering program in 2015, which it said included substantial investment in enhanced capability, processes, systems and controls.