The Australian Transaction Reports and Analysis Center (AUSTRAC) has filed a civil penalty against Entain Group in which it accuses the operator of allegedly failing to meet anti-money laundering and counter-terrorism financing (AML/CTF) duties.
More specifically, the case that has already reached the Federal Court will focus on alleged AML/CTF deficiencies from Entain. AUSTRAC is adamant that the company was ineffective in developing robust safety systems to pinpoint and deal with risks, specifically those that stem from its dependency on third parties to process cash deposits.
According to AUSTRAC, such practices have allegedly made the source of funds unclear, and as a result, increased the risk of money laundering.
Brendan Thomas, the CEO of AUSTRAC, commented on the proceedings and stated that the way that Entain conducted business “left the company at serious risk of criminal exploitation”.
AUSTRAC’s proceedings allege that Entain did not develop and maintain a compliant anti-money laundering program and failed to identify and assess the risks it faced. We are alleging this left the company at serious risk of criminal exploitation.
Furthermore, AUSTRAC claims that Entain displayed inadequate oversight mechanisms, further stating that both its senior management and board of directors failed to address security vulnerabilities in its day-to-day operations.
The specific allegations made by AUSTRAC include:
- Bad monitoring of high-risk clients, some of whom were allowed to use fake names in the systems of Entain.
- Poor verification of customer identities and source of deposits.
- Faulty risk assessments for its 24/7 operations have created opportunities for exploiting its betting platform.
As of this moment, the case is in the hands of the Federal Court, which will have the task of determining whether the operator breached the AML/CTF act and if so, decide the fine or the penalty if that turns out to be the case.
It remains to see how this case will unfold, as this is not the first time Entain was ordered to pay a hefty fine, as the giant was ordered to pay a penalty of £585m ($737.4m) for breaching Section 7 of the Bribery Act 2010 in Turkey in 2023.
