Suspected non-compliance

Australia's major sports betting companies face regulatory scrutiny over money laundering concerns

Reading time 1:53 min

Australia's leading sports gambling companies, including Sportsbet, Ladbrokes, and Bet365, are on edge as the country's financial crime watchdog, the Australian Transaction Reports and Analysis Centre (Austrac), finalizes its investigation into suspected breaches of money-laundering laws.

The outcome of this investigation could have significant ramifications for the industry and potentially influence the federal government's plans to regulate the sector amid mounting calls for stricter measures, including a total ban on gambling advertisements.

According to an Austrac spokesperson, the investigation into Sportsbet, Ladbrokes, and Bet365 commenced in late 2022 following an extensive supervisory campaign and the receipt of independent audits highlighting suspected non-compliance. Austrac is currently assessing whether further regulatory action is necessary.

Dr. Jamie Ferrill, an expert on financial crimes at Charles Sturt University, underscored the gravity of the situation, emphasizing that money laundering poses a substantial risk within the online gambling sector. Ferrill warned that companies should brace themselves for potential regulatory intervention, which could shed light on weaknesses in their anti-money-laundering and counter-terrorism financing programs.

It will likely shine a spotlight on some of the weaknesses or loopholes in their AML/CTF (anti-money-laundering and counter-terrorism financing) programs and perhaps other areas of their operations,” Ferrill said, as per The Guardian. “It will likely result in initial increased costs to improve their programs and clamp down on illicit activity – but that needs to be the cost of doing business.”

Betting companies are obligated to conduct thorough assessments of customers and monitor financial transactions to detect and mitigate the risk of money laundering or terrorism financing.

However, Anton Moiseienko, a money-laundering expert at the Australian National University, highlighted instances where companies failed to fulfill even basic obligations, allowing criminals to exploit vulnerabilities within their systems.

Moiseienko explained that online gambling platforms present an avenue for criminals to launder illicit funds, either by converting them into legitimate winnings or utilizing stolen credit card details. He emphasized that deficiencies in compliance measures are often straightforward and do not involve sophisticated tactics.

In response to the growing threat of money laundering within the gambling industry, Austrac established a dedicated unit last year. The agency views the sector as high risk due to the substantial volume of legitimate funds flowing through it, making it an attractive target for illicit activities.

While Ferrill refrained from speculating on the investigation's outcome, she expressed hope that it would serve as a wake-up call for the industry, prompting a renewed focus on combating money laundering. For her part, former Austrac CEO Nicole Rose emphasized the importance of enforcement in safeguarding the community against organized crime fueled by money laundering activities.

“Money laundering feeds organized crime and all the harm that comes with it," Rose said. "We need businesses at the frontline to fully comply with [the Anti-Money Laundering and Counter-Terrorism Financing] Act – to understand and mitigate their risks and report suspected crimes.”

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