Tabcorp Hit with AU$45 Million Fine Over AML Failures

Posted on: February 16, 2017, 02:00h. 

Last updated on: February 16, 2017, 12:04h.

Australian betting giant Tabcorp has agreed to pay a AU$45 million ($34.6 million) penalty for violations of its anti-money laundering (AML) and counter-terrorism financing (CTF) obligations.

Tabcorp to pay record AML fine
Tabcorp, one of the world’s largest publicly listed gaming companies will admit to numerous AML violations as part of its record settlement with Australian authorities. (Image: Tabcorp Park)

It’s by far the highest ever fine imposed for such transgressions by Australian authorities.

The Australian Transaction Reports and Analysis Centre (AUSTRAC), the country’s financial intelligence agency, said it found hundreds of separate transgressions by Tabcorp, including a failure to report that over 30 TAB accounts had been opened under false names and used to launder fraudulent credit card funds for organized crime.

It also found numerous instances in which Tabcorp processed transactions for customers who were labeled “high risk.”

Tabcorp Faced Billions in Penalties

The regulator brought civil penalty proceedings against the bookmaker in the federal courts in 2015, alleging a culture of “systematic” non-compliance.

Last year it raised fresh claims against Tabcorp, bringing the total number of alleged violations to 236. Tabcorp potentially faced billions in fines as each violation carried a AU$18 million ($13.8 million) penalty.

Tabcorp, which manages the TAB, Luxbet, Sky Racing and Sky Sports Radio brands, and is one of the world’s largest publicly listed gaming companies, will admit to failures of past AML and CTF compliance under the terms of the settlement and has committed to improving its AML protocols. The settlement is awaiting federal court approval.   

“Tabcorp is firmly committed to being the industry leader in regulatory compliance across all of our operations,” Tabcorp managing director David Attenborough said in a filing to the Securities Exchange Commission on Thursday. “We are pleased to have reached an agreement with AUSTRAC on this matter and we will continue to work co-operatively with AUSTRAC going forward.”

Tabcorp has spent over $35 million in legal fees fighting the two-year case, bringing the total costs to the company to around $80 million. But with a proposed merger with Tatts looming, the bookmaker is anxious to wipe the slate clean as it pursues approval for the merger from regulators.

Tatts Misses the Jackpot

Tatts, meanwhile, has announced its half-year net profit dropped 16.5 percent on the previous year thanks to a dearth in the kind of monster jackpots which entice non-regular players to buy tickets.   

Tatts said that, during the six months to December, its lottery operations generated 15 jackpots above $15 million in comparison with a record 24 during the corresponding period last year.

“It was always going to be a huge ask to match this jackpot run and the outstanding revenue it delivered,” said Tatts chief Robbie Cooke .