The federal government’s financial intelligence watchdog has decided to take a close look at the bookmaking activities in this country of Entain, one of the world’s biggest gambling businesses.
AUSTRAC, the Australian Transaction Reports and Analysis Centre revealed on Monday that it had launched an ‘enforcement investigation’ of Entain’s bookmaking business.
Austrac will investigate whether Entain has complied with its anti-money laundering and counterterrorism financing obligations.
Entain, which operates in more than 20 countries, offers sports betting, as well as online casino, poker and bingo in addition to operating major betting brands including Ladbrokes, Coral, and BetMGM.
AUSTRAC said in the statement the action “follows an extensive supervisory campaign that assessed entities within the corporate bookmakers sector.” which indicates the agency has found something that warrants a tougher investigation.
AUSTRAC head Nicole Rose said all reporting entitles including bookmakers must actively combat serious and organised crime.
“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,” Ms Rose said Monday’s statement.
The local probe into Entain comes less than a month after the UK’s Gambling Commission ordered the group to pay a record $28 million (17 million pounds) for social responsibility and anti-money laundering failures.
The UK Gambling Commission chief Andrew Rhodes said the investigation revealed “serious failures,” and the penalty was the watchdog’s largest enforcement to date.
“There were completely unacceptable anti-money laundering and safer gambling failures. Operators are reminded they must never place commercial considerations over compliance.
It was also Entain’s second regulatory settlement in as many years – it was fined 5.9 million pounds in 2019 for similar failings.
The investigation also comes as Entain is looking at bidding for the WA and Victorian gaming businesses, along with Tabcorp
(ASX:TAH) and several other gambling companies.
At one stage Entain was a front runner to buy Tabcorp’s wagering and gambling business for $3.5 billion. It was denied a bid when Tabcorp decided to keep the punting business and spin off the lotteries operations.
Entain is now taking on Tabcorp for both state businesses.
The Financial Review commented on Tuesday that the AUSTRAC action puts Entain’s interest under a cloud.
Victoria has started talks on a new licence that is due to commence in August 2024. The Victorian licence is held by Tabcorp and its 30-year licence is falling due. Tabcorp has to maintain exclusive control to justify its current market ranking.
Tabcorp also needs to hold on to its Victorian licence to claw back investor support after increased dominance from rivals including the London-based Entain.
State licence negotiations for WA are also underway.
Investigating Entain means AUSTRAC has added another betting business to the long list of casino companies it has probed or is still investigating. These include Crown, Star, Sky City in Adelaide, while banks such as the Commonwealth, the NAB and Westpac have been probed as well – with Westpac and the Commonwealth eventually hit for penalties totalling more than $2 billion.
Tabcorp itself has also been investigated by AUSTRAC back in 2017 and was fined a then record $45 million for non-compliance with the Anti-Money Laundering and Counter-Terrorism Financing legislation.
Tabcorp shares rose 1% to 94.5 cents.
