Gambling giant Entain accepted $152m in bets from 17 high-risk customers who had “suspected criminal profiles and associations” despite being aware they may have been laundering money, federal court documents allege.
Entain’s share price fell by almost six percent after Australia’s financial intelligence agency (Austrac) announced civil penalty proceedings against it on Monday, alleging it “deliberately obscured the identities” of high-risk customers and failed to stop a “serious risk of criminal exploitation”.
Austrac’s notice of filing in the federal court alleges Entain, a global company that runs the Ladbrokes and Neds brands in Australia, committed “serious and systemic non-compliance with anti-money laundering and counter-terrorism financing laws”.
The 17 “high-risk” customers identified by Austrac allegedly “deposited in excess of $152m into their betting accounts and withdrew in excess of $105m from their betting accounts”.
The filing said Entain submitted at least one suspicious matter report to Austrac relating to each of the 17 customers, raising concerns about “source of wealth, source of funds, proceeds of crime, money laundering and/or tax evasion”.
“In spite of often being aware of the high money laundering and terrorism financing risks, Entain chose to continue business relationships with these customers, including customers with suspected criminal profiles and associations,” Austrac’s notice of filing said.
“The failure to monitor these customers exposed Entain to the risk of being exploited by criminals and to the risk that proceeds of crime were being used to obtain designated services.”
Austrac also alleges Entain was unable to “comprehensibly or consistently detect” unusually large deposits, cash bets, anonymous gambling, and bets from a foreign country “on Entain’s restricted jurisdiction list”.
The bookmakers is also accused of running a “pseudonym register” and disguising the identities of customers who wanted to “protect their privacy”.
Austrac also accused Entain of failing to properly screen for “politically exposed persons”. The agency has warned people in public positions such as politicians or public servants “can be a target for corruption and bribery attempts and ultimately for money laundering or terrorism financing activities”.
Entain is also accused of accepting cash from “exclusive affiliates” who were paid to act as intermediaries who accepted bets and generated new revenue streams.
“Entain paid commissions to business development managers and exclusive affiliates, which created a conflict of interest with respect to the application of ongoing customer due diligence,” the Austrac filings said.
The chief executive of Entain, Gavin Isaacs, said “we note the allegations made, which we take extremely seriously”. The company is yet to lodge its defense in court.
A notice posted by Entain on the London Stock Exchange, where the company is listed, said the civil proceedings “may result in a penalty being levied which could be potentially material”.
“We have cooperated fully with Austrac throughout its investigation and we are implementing further enhancements to Entain Australia’s anti-money laundering and counter-terrorism compliance arrangements,” Isaacs said.
“We are 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.”
The Austrac CEO, Brendan Thomas, said the court proceedings would allege Entain “did not develop and maintain a compliant anti-money laundering program and failed to identify and assess the risks it faced”.
“We are alleging this left the company at serious risk of criminal exploitation,” Thomas said in a statement.
“Money laundering is often a symptom of serious criminal activity, including fraud, scams and corruption, all of which have equally serious effects on our communities.”
In Australia, Gambling Help Online is available on 1800 858 858. The National Debt Helpline is at 1800 007 007. In the UK, support for problem gambling can be found via the NHS National Problem Gambling Clinic on 020 7381 7722, or GamCare on 0808 8020 133. In the US, call the National Council on Problem Gambling at 800-GAMBLER or text 800GAM.
