Australia Investigating Entain Over Possible Anti-Money Laundering Failures

Posted on: September 12, 2022, 07:05h. 

Last updated on: September 12, 2022, 03:49h.

Global gaming giant Entain recently found itself facing a record £17 million (US$21 million) fine in the UK for anti-money laundering (AML) failures. It’s now looking at the possibility of a similar penalty in Australia.

Entain CEO Jette Nygaard-Andersen
Entain CEO Jette Nygaard-Andersen in a media photo. The global gaming giant faces an investigation in Australia for possibly violating anti-money laundering rules. (Image: Financial Times)

The Australian Transaction Reports and Analysis Centre (AUSTRAC) has launched an investigation into the company, according to a notice from the agency. As with the UK fine, the Ladbrokes owner may have violated AML rules in the country.

There is no concrete evidence that Entain broke any laws. However, if it did, it could pay as much as AU$22 million (US$15 million) for its transgressions. AUSTRAC could also opt not to issue a financial penalty. Instead, it could put the company on “probation” or give it an infringement notice.

How the investigation impacts Entain, in the long run, depends on how long it takes. AUSTRAC says it might need up to two years to wrap up its review.

Heightened Scrutiny

The scrutiny comes following a closer look at Entain and other gaming companies in the country. AUSTRAC said it’s completed a campaign that dove into the operations of several sports betting companies, which prompted a closer look at the London-based outfit.

AUSTRAC didn’t reveal specifically what prompted its decision to start an “enforcement investigation” into Entain. The case may stem from the fine the company received in the UK. However, the financial watchdog is particularly interested in the company’s activity from 2016 to 2020.

Entain, which tried and failed to buy Tabcorp last year, has been on a mission in Australia, just like in other jurisdictions it serves. It’s continuously seeking to secure new online gaming licenses and has competed with Tabcorp in Western Australia and Victoria.

Depending on the investigation’s outcome, AUSTRAC could throw a larger net over Australia’s gaming industry. It hinted that it would conduct further reviews of other operators if the Entain review uncovered significant failings.

Entain has acknowledged the investigation and says it’s cooperating with the financial watchdog.

Investigation Could Cost Entain on Several Fronts

Should AUSTRAC determine that Entain failed to comply with AML regulations, the monetary fine it might have to pay is just the beginning. Entain also hopes to gain a license to operate Western Australia’s TAB, an online and retail outlet wagering services provider. If the investigation doesn’t go well, it could find itself in a weakened position.

Victoria is auctioning its TAB license as well. That process began in 2019 and is still ongoing. Entain hasn’t confirmed that it’s in the running. Still, if it is, the company will face difficulty if found guilty.