Ladbrokes owner took $152m from customers with ‘suspected criminal associations’, court documents claim | Gambling

Gaming giant Entain accepted $152 million in bets from 17 high-risk customers who had “suspected criminal profiles and associations” despite knowing they may have laundered money, federal court documents allege.

Entain’s share price fell by almost six percent after Australia’s Financial Intelligence Service (Austrac) announced civil penalty proceedings against it on Monday, alleging it “deliberately obscured the identities” of high-risk customers and failed to stop a “serious risk of criminal exploitation”.

Austrac’s notice of filing in the Federal Court alleges that Entain, a global company that operates the Ladbrokes and Neds brands in Australia, committed “serious and systemic non-compliance with money laundering and terrorist financing laws”.

The 17 “high risk” customers identified by Austrac allegedly “deposited more than $152 million into their gaming accounts and withdrew more than $105 million from their gaming accounts”.

The filing said Entain submitted at least one suspicious case report to Austrac regarding each of the 17 clients, raising concerns about “source of wealth, source of funds, proceeds of crime, money laundering and/or tax evasion”.

“Despite being frequently aware of the high risks of money laundering and terrorist financing, Entain chose to continue doing business with these clients, including clients with suspected criminal profiles and associations,” Austrac’s notice of filing said.

“The failure to monitor these customers exposed Entain to the risk of being exploited by criminals and to the risk of the proceeds of crime being used to obtain designated services.”

Austrac also alleges that Entain was unable to “intelligibly or consistently detect” unusually large deposits, cash bets, anonymous gambling and foreign country betting “on Entain’s restricted jurisdiction list”.

The bookmakers are also accused of running a “pseudonym register” and hiding the identity of customers who wanted to “protect their privacy”.

Austrac also accused Entain of failing to properly screen for “politically vulnerable individuals”. The agency has warned people in public positions such as politicians or civil servants “may be a target for corruption and attempted bribery and ultimately for money laundering or terrorist financing activities”.

Entain is also accused of accepting cash from “exclusive affiliates” who were paid to act as intermediaries who accepted bets and generated new revenue streams.

“Content paid commissions to business development managers and exclusive affiliates, which created a conflict of interest with regard to the application of ongoing customer due diligence,” the Austrac documents said.

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The chief executive of Entain, Gavin Isaacs, said “we take note of the allegations made, which we take extremely seriously”. The company has not yet filed its defense in court.

A notice issued by Entain on the London Stock Exchange, where the company is listed, said the civil action “may result in the imposition of a fine which could potentially be significant”.

“We have cooperated fully with Austrac throughout the investigation and we are implementing further enhancements to Entain Australia’s anti-money laundering and counter-terrorism agreements,” Isaacs said.

“We are committed to keeping financial crime at bay and continue to play our part in supporting a well-regulated and compliant sector for our customers, stakeholders and the wider community.”

Austrac CEO Brendan Thomas said the lawsuit would allege Entain “failed to develop and maintain a compliant anti-money laundering program and failed to identify and assess the risks it faced”.

“We allege this left the company at serious risk of criminal exploitation,” Thomas said in a statement.

“Money laundering is often a symptom of serious criminal activity, including fraud, deceit and corruption, all of which have equally serious consequences for our communities.”