Australia's anti-money-laundering watchdog has launched an investigation into two of the nation's biggest online sports betting companies and warns that it wants the multi-billion-dollar gambling industry to "lift its game".
The Australian Transaction Reports and Analysis Centre (AUSTRAC) told the ABC it has "reasonable grounds to suspect that Sportsbet and Bet365 may have contravened or are contravening the anti-money laundering and counter-terrorism financing law and rules".
AUSTRAC has appointed external auditors to assess Sportsbet's and Bet365's compliance with the anti-money-laundering and counter-terrorism financing laws.
However, the regulator said it was unable to comment on specific details of the Sportsbet or Bet365 matters, or pre-empt the auditor’s findings and final reports.
The move comes after an extensive supervisory campaign by AUSTRAC that assessed entities within the corporate bookmaking sector and the recent investigation into Ladbrokes' owner, Entain, about its compliance.
Sportsbet and Bet365 are among the largest operators in the sports betting sector.
"AUSTRAC is putting the whole industry on notice to lift their game," Nicole Rose, AUSTRAC chief executive, said in a statement.
"Ultimately, enforcing non-compliance is about protecting the community.
"Money laundering feeds organised crime and all the harm that comes with it."
Ms Rose said the regulator wanted businesses at the front line to fully comply with the laws and to understand and mitigate their risks and report suspected crimes.
"AUSTRAC will not hesitate to take action where suspected non-compliance is identified," she added.
A Sportsbet spokesperson told the ABC the company takes its responsibilities under the Anti-Money Laundering and Counter-Terrorism Financing Act and Rules "very seriously".
"AUSTRAC's notice requires us to appoint an external auditor to look into our compliance with the Act and Rules," they said.
"The appointment of an external auditor is not an enforcement investigation.
"It comes following a periodic compliance assessment of Sportsbet for the period of 2016 to 2020. Since then, we have enhanced our program and practices, including conducting an independent review. Sportsbet continues to invest heavily in AML/CTF compliance and in our people, processes and systems."
They added Sportsbet would continue to work closely with AUSTRAC.
A Bet365 spokesperson said they were "strongly committed to maintaining high levels of compliance with Australian law".
"Bet365 has robust policies and procedures in place to minimise risks associated with money-laundering and counter-terrorism financing.
"The company is working co-operatively with AUSTRAC."
In 2017, gaming company Tabcorp was fined $45 million — then one of the largest penalties in Australian corporate history — for breaches of anti-money-laundering and counter-terrorism financing laws.
The Federal Court found Tabcorp had failed to alert regulators to reports of suspicious behaviour on 108 occasions over more than five years.
Two of Australia's big four banks — the Commonwealth and Westpac — have paid even bigger fines for non-compliance with anti-money-laundering and terrorism financing rules, with Westpac's $1.3 billion penalty the largest in the nation's corporate history.
AUSTRAC has issued audit notices to both Sportsbet and Bet365, and said it would give the external auditors 180 days after their appointment to determine whether both companies have risk-based systems and controls in place to effectively identify, mitigate and manage money laundering and terrorism financing risks.
The extent of the auditor's examination of each company will be determined by AUSTRAC and will be at Sportsbet and Bet365's expense.
AUSTRAC also said the outcomes of the audit would assist Sportsbet and Bet365 to comply with anti-money-laundering and counter-terrorism financing obligations, as well as inform the regulator whether any further regulatory action is required.
