Ladbrokes and Coral owner Entain is in hot water in Australia over allegations that it allowed 17 individuals with a ‘suspected criminal profile’ to deposit more than $150 million AUD – around £76 million – into their betting accounts in order to ‘spend the proceeds of serious crime’.
The sensational accusation has been levelled by Austrac, a financial intelligence agency in Australia, who have filed a civil writ against Entain in the federal court.
They claim that Entain must have been ‘aware’ of the likelihood that the individuals were laundering money, and filed the court motion for what they describe as ‘… serious and systemic non-compliance with anti-money laundering and counter-terrorism financing laws.’
The allegations have rocked Entain to the extent that their share price fell by more than 6% on Monday as the news broke.
Funny Money
Austrac makes the sensational claim that Entain ‘deliberately obscured the identity’ of the big money bettors, which meant that in turn they had failed to manage the ‘serious risk’ of criminal exploitation.
The 17 individuals, described as ‘high risk’, deposited the huge sum into their accounts, before later withdrawing a collective $105 million AUD (£52.5 million) – allegedly, in a bid to ‘wash’ the money.
The main bone of contention, as far as Austrac are concerned, is that Entain had submitted at least one report of suspicious activity about each of the customers to the financial agency, however they continued to allow them to deposit and bet without suspending their accounts.
And that may just be constituted as a breach of Entain’s licensing conditions, if the courts feel that the firm has failed in its obligations as per ‘source of wealth, source of funds, proceeds of crime, money laundering and/or tax evasion.’
The agency has also questioned how Entain failed to identify the huge sums being deposited, while bets were also placed from countries that feature on the gambling conglomerate’s list of restricted jurisdictions.
“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,” reads Austrac’s legal filing.
“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.”
Perhaps the most damning allegation is that Entain employed some kind of ‘private register’ of punters who did not want their identities to be revealed.
Entain’s defence is yet to be heard in court at the time of writing, although the company’s chief executive – Gavin Isaacs – has commented that ‘we note the allegations made, which we take extremely seriously.’
“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,” he continued.
It would appear that they are preparing for punitive action – possibly a sizable fine – after informing shareholders via the London Stock Exchange that the court action ‘may result in a penalty being levied, which could be potentially material.’
The news has spooked investors, with Entain’s share price falling 6.75% at opening on Monday morning – making it the FTSE 100’s biggest loser, with a further 0.6% drop on Tuesday.
On Track
The court filing is the culmination of an investigation that dates as far back as 2022.
That commenced in the same year that Entain were fined a mammoth £17 million by the UK Gambling Commission, after they were found guilty of a separate set of anti-money laundering failings.
In that case, the regulator found that Entain had also failed in their social responsibilities, which saw customers deposit and bet thousands without any intervention – including one punter living in social housing who deposited more than £180,000 in just six months.
And in 2023, Entain opted to pay an eye-watering £615 million to settle another legal matter, in which they were accused of bribery by a subsidiary company in Turkey.
Austrac, meanwhile, have been busy cracking the whip themselves. Back in 2023, they played their part in the Federal Court fining Crown – the Australian casino outfit – some $450 million AUD (around £225 million) for their anti-money laundering failings.
And earlier this year, following an Austrac probe, the Federal Court fined SkyCity $63 million AUD (£31 million) after the firm was found to have contravened anti-money laundering rules, with more than 100 customers able to bet huge sums without any additional proof of source checks being made.