Entain Faces AUSTRAC Lawsuit Over $152 Million in Bets Linked to High-Risk Customers

Ladbrokes owner Entain is facing civil proceedings initiated by AUSTRAC, Australia’s financial intelligence unit, over allegations of accepting $152 million in bets from 17 customers with suspected criminal connections.

According to AUSTRAC, these transactions occurred despite the company categorizing some of these individuals as “high risk” for money laundering or terrorism financing (ML/TF) and filing suspicious transaction reports about their activities.

AUSTRAC's court filings revealed that the 17 customers deposited “in excess of $152 million into their betting accounts” and withdrew “in excess of $105 million.” The filings highlighted Entain’s failure to conduct adequate due diligence on these high-risk customers.

“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 service,” AUSTRAC stated in the filings.

The regulator further disclosed that Entain had submitted multiple suspicious matter reports (SMRs) to AUSTRAC regarding unusual activity associated with the 17 customers. These reports demonstrated that Entain had doubts about the legitimacy of the customers' sources of wealth. “Some of the customers were also rated ‘high’ ML/TF Risk by Entain at various points, sometimes for extensive periods,” AUSTRAC noted.

However, the filings allege that Entain continued to offer its services to these individuals without implementing proper ongoing due diligence measures. “Despite the ML/TF Risks, Entain continued to provide designated services to the 17 customers, without carrying out appropriate ongoing due diligence,” the filings added.

Responding to the lawsuit, Entain issued a statement asserting that the company takes AUSTRAC’s allegations “extremely seriously.” Entain CEO Gavin Isaacs said, “We have cooperated fully with AUSTRAC throughout its investigation, and we are implementing further enhancements to Entain Australia’s AML and CTF compliance arrangements.” Isaacs acknowledged that while improvements are still needed, Entain is on track to meet its compliance goals. “Whilst we still have some further improvements to make, we expect these to be implemented in line with the plan we communicated to AUSTRAC in 2023,” Isaacs added.

The civil proceedings against Entain underscore regulatory concerns about financial oversight in the sports betting industry, particularly when it comes to mitigating the risks of money laundering and financial crime. 

By fLEXI tEAM