Investing.com -- Entain Group (LON:ENT), the operator behind online betting platforms such as Ladbrokes (LON:LCL) and Neds, has come under fire from AUSTRAC, for alleged systemic breaches of anti-money laundering and counter-terrorism financing laws, sending its shares down over 7% on Monday.
The Australia’s anti-money laundering regulator, alleges that Entain failed to implement a compliant anti-money laundering program, leaving its platforms vulnerable to criminal exploitation.
As per AUSTRAC CEO Brendan Thomas, these shortcomings reflect serious failings within Entain’s governance, risk management, and operational controls.
AUSTRAC’s claims include accusations that Entain’s board and senior management did not exercise sufficient oversight of its AML/CTF program, undermining the company’s ability to identify and address risks associated with money laundering and terrorism financing.
The company’s round-the-clock betting operations, accessible via its website and app, allegedly exposed it to the possibility of unidentified individuals using third-party channels to fund gambling accounts with potentially illicit cash.
A particular focus of the allegations is the use of third parties—both businesses and individuals—to accept cash deposits for Entain accounts.
AUSTRAC says these practices obscure the origins of funds, creating opportunities for criminals to launder money.
The regulator also claims that Entain did not implement adequate customer verification processes or checks to confirm the source of funds in these transactions, increasing the risk of facilitating financial crimes.
Further scrutiny has been placed on Entain’s handling of higher-risk customers. AUSTRAC alleges that the company failed to conduct proper due diligence on 17 such accounts, including instances where customer identities were deliberately concealed using pseudonyms.
This practice, purportedly done under the guise of protecting customer privacy, is alleged to have hindered Entain’s ability to monitor for potential misuse of its platforms by criminals.
This case shows the risks the online betting sector faces when it does not take its anti-money laundering obligations seriously, Thomas said in a statement, adding that money laundering is often linked to serious crimes such as fraud, scams, and corruption.
Entain is the latest in a string of gambling operators to face legal action or penalties over AML/CTF compliance issues.