Entain sued for “serious and systematic” failures in the fight against money laundering

Australian authorities have taken legal action against Entain over allegations that the Ladbrokes owner breached anti-money laundering rules.

The Australian Transaction Reporting and Analysis Center (AUSTRAC) accused the FTSE 100 company of “serious and systemic non-compliance” with the country’s anti-money laundering and anti-terrorist financing regulations.

It is the first time Australia’s financial intelligence agency has launched a civil case against an online gambling company.

AUSTRAC launched an investigation into Entain, which also owns Coral and Bwin, in September 2022 following an oversight campaign covering the corporate betting industry.

Among its claims, AUSTRAC says Entain lacked “appropriate controls” to confirm the identity of customers and the origin of their money.

It also accuses the company of not carrying out sufficient checks on 17 “higher risk” clients and even of intentionally hiding the identity of some to “protect their privacy.”

Brendan Thomas, chief executive of AUSTRAC, alleged that Entain “failed to develop and maintain a compliant anti-money laundering program and failed to identify and assess the risks it faced”.

He added: “We allege this left the company at serious risk of criminal exploitation.”

Entain told investors it was cooperating fully with AUSTRAC and expects to complete a program to improve its anti-money laundering and counter-terrorism financing systems and processes by June 2025.

However, he warned them that although the outcome of the investigation was uncertain, it could result in a material sanction.

Recent fines imposed under AUSTRAC’s ongoing money laundering review of gambling companies have included fines totaling A$450 million imposed on the Crown casino and hotel complex.

Britain’s Gambling Commission fined Entain a record £17 million in August 2022 for “completely unacceptable” failings in social responsibility and anti-money laundering.

It found the betting group allowed some customers to bet hundreds of thousands of pounds without sufficient checks, including one person living in social housing who had deposited £186,000 in six months.

More than a year later, Entain agreed to pay a £615m settlement to avoid going to trial for alleged bribery at a former Turkey-oriented subsidiary.

Gavin Isaacs, chief executive of Entain, said: “We take note of the allegations made, which we take very seriously.

‘We have fully cooperated with AUSTRAC throughout their investigation and are implementing further improvements to Entain Australia’s AML (anti-money laundering) and CTF (counter-terrorism financing) compliance arrangements.

“While we still have some additional improvements to make, we expect these to be implemented in line with the plan we communicated to AUSTRAC in 2023.

“We are committed to keeping financial crime out of the game and continue to play our part in supporting a well-regulated and compliant sector for our customers, stakeholders and the wider community.”

hold shares They fell 5.2 per cent to 773p on Monday morning, making them the biggest faller on the FTSE 100.