The Australian financial crime watchdog has launched an investigation into gambling companies Sportsbet and Bet365 on suspicions they have failed to comply with anti-money laundering laws.
The Australian Transaction Reports and Analysis Centre (Austrac) announced on Thursday that it had “reasonable grounds to suspect” Sportsbet and Bet365 had or were still contravening multiple sections of the anti-money laundering and counter-terrorism financing laws.
External auditors will be appointed to investigate the suspected noncompliance. Notices to this effect were issued to Sportsbet and Hillside (Australia New Media) Pty Ltd, which owns Bet365, on Wednesday.
Bet365 is a large online British gambling empire founded by the Coates family in 2000, with offices in Gibraltar, Malta, Bulgaria and Australia. Its CEO, Denise Coates, is one of Britain’s wealthiest women.
The Australian watchdog said the probes into the two companies followed “an extensive supervisory campaign” assessing corporate bookmakers.
The law requires betting companies to assess customers and monitor their financial transactions in order to identify, mitigate and manage the risk that they might be engaging in money laundering or terrorism financing. Companies are also required to engage in regular reporting of any identified risks.
Senior management and boards are expected to oversee and regularly review anti-money laundering and terrorism financing compliance processes and programs, and are ultimately responsible for any decisions made about engaging in higher-risk business relationships.
The chief executive of Austrac, Nicole Rose, said in a statement on Thursday that by investigating two of the largest operators in the corporate bookmaking sector, “Austrac is putting the whole industry on notice to lift their game”.
“Ultimately, enforcing non-compliance is about protecting the community. Money laundering feeds organised crime and all the harm that comes with it. We need businesses at the front line to fully comply with [the] Act – to understand and mitigate their risks and report suspected crimes,” Rose said.
“Austrac will not hesitate to take action where suspected non-compliance is identified, to protect businesses from being exploited and protect the Australian community from harm.”
It is not the first time Bet365 has been investigated: in 2016, the federal court of Australia ordered Bet365’s parent company Hillside and its UK counterpart to pay penalties totalling $2.75m for offers of “free bets” that were deemed to be misleading and deceptive.
The new probes follow the announcement in September that the watchdog was investigating betting company Entain, which owns Ladbrokes.
Noncompliance can result in multimillion-dollar penalties. In 2017, Austrac fined Tabcorp a record $45m for failing to report more than 100 suspicious activities that might relate to money laundering or credit card fraud. It was widely reported as the highest civil penalty issued in Australian corporate history at the time. Tabcorp admitted that its processes and oversight were insufficient.
The gambling industry has come under increasing scrutiny in recent months. The federal government launched new consumer protection rules on Wednesday that will require online gambling companies to run taglines in their ads including “Chances are you’re about to lose”, “What’s gambling really costing you?” and “Think. Is this a bet you really want to place?”
The rules go beyond the current requirement that companies include the tagline “Gamble responsibly” in their ads.
In October, an inquiry led by the New South Wales Crime Commission inquiry found “large sums” of money were being laundered in pubs and clubs across the state, “rewarding and perpetuating crime in the community”.
In September, the Australian federal police charged three people in Victoria with money laundering, alleging they laundered some $4.7m through a Springvale pokies venue by paying patrons in cash to sign over jackpot cheques they had received from poker machine winnings.
Representatives from Sportsbet and Bet365 said in statements to Guardian Australia that they were working cooperatively with Austrac and took their responsibilities under the anti-money laundering laws seriously.
A spokesperson for Sportsbet said the company had enhanced compliance measures, including conducting an independent review, since a period of compliance assessment in 2016-2020. “Sportsbet continues to invest heavily in AML/CTF compliance and in our people, processes and systems,” the spokesperson said.
A spokesperson for Bet365 said the company had “robust policies and procedures in place to minimise risks associated with money-laundering and counter-terrorism financing”.
