AUSTRAC Investigating Entain For Money Laundering

Entain is one of the largest gambling companies in the world, but it is also a company that is experiencing various legal issues. Those issues are about to compound as Australian regulators are opening an investigation into the company.

According to various reports, the Australian Transaction Reports and Analysis Centre (AUSTRAC) is conducting an enforcement investigation into the company. AUSTRAC is investigating whether the company is complying with money laundering laws.

AUSTRAC Launches Investigation Into Entain

Various sources, including Reuters, are reporting the Australian financial crimes watchdog AUSTRAC is investigating Britain’s Entain. The investigation follows a comprehensive review of the entire corporate bookmaking sector.

According to a statement from AUSTRAC CEO Nicole Rose, “Reporting entities have a responsibility to ensure they identify, assess and manage risks of money laundering and terrorism financing, develop adequate processes and devote the necessary resources to comply with their AML/CTF obligations.”

Rose also stated in the press release that all companies, not just those in the bookmaking sector, must be proactive in combatting money laundering and organised crime. AUSTRAC didn’t comment on any motivating factors behind the investigation but will opt to disclose findings at a later date.

Investigation Comes After Record Fine from UKGC

This new investigation was not unexpected for some following the industry. In August, the UK Gambling Commission levied the largest fine in history against Entain. The company received a £17m fine for failure to combat money laundering and failing in other areas of social responsibility.

Approximately £14m of those penalties were against LC International, the company that operates 13 gambling sites for Entain. The remaining fines were issued to Ladbrokes Betting & Gaming, which operates 2,700 gambling locations around the UK.

The majority of the complaints surrounding Entain in the UK involve failures to enforce risk management procedures. Focusing on a period from December 2019 to October 2020, the Gambling Commission found the company failed to conduct adequate risk management in regard to customer deposits.

For example, the company failed to do adequate checks on funding sources for various players. This can lead to players using the company for money laundering activities. While the Gambling Commission did not find any evidence of criminal activity, Entain still failed to adequately protect itself and its players.

Gambling Commission CEO Andrew Rhodes released a statement in August warning Entain against future violations. He states, “They should be aware that we will be monitoring them very carefully, and further serious breaches will make the removal of their licence to operate a very real possibility. We expect better, and consumers deserve better.”

Entain Could Face Massive Fines From AUSTRAC

The investigation from AUSTRAC will focus on activity from July 2016 to June 2020. AUSTRAC states that Entain is cooperating with the investigation. The organisation also states it will act against Entain if they find the company is in non-compliance.

Those actions could include massive fines against Entain. A report from the Sydney Morning Herald claims that Entain could face fines totaling AU$22 Million ($15.2 Million USD). However, it is unclear as to the impact on the company’s licence. The company represents one-sixth of the nation’s total legal online gambling market.

The investigation into Entain comes after the announcement of the NSW investigation findings into Star Entertainment Group. Star Sydney was found to have committed various violations of its anti-money laundering policies. The company may be facing revocation of its license. Meanwhile, Queensland is also opening an investigation into Star Entertainment group.

Australia is working diligently to clean up its gambling industry. The investigation into Entain is a continuation of a multi-year process that will continue to seek out and prosecute violators.