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Australian financial intelligence agency and anti-money laundering (AML) enforcer AUSTRAC has launched an “enforcement investigation” into the Australian arm of bet365 after reviewing an external audit of the British online gambling giant.
The probe into Hillside (Australia New Media) Pty Limited “will focus on whether bet365 has complied with its obligations under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006,” AUSTRAC said in a statement on Thursday (March 7).
The probe also “follows a supervisory campaign of entities within the corporate bookmaker sector”, a process that amounted to reading the Riot Act to an industry segment that had been largely untroubled by federal or state regulatory intervention.
AUSTRAC in November 2022 ordered bet365 and its Flutter-owned rival Sportsbet, Australia’s leading sportsbook, to nominate three auditing companies each, from which AUSTRAC selected one company to perform an anti-money laundering/counter-terrorism financing (AML/CTF) audit.
The auditors’ reports were required to be submitted to AUSTRAC after six months, suggesting the regulator has considered the reports for more than six months in turn.
An AUSTRAC statement at the time of the audit instruction said both companies were suspected of breaching sections of the act that required ongoing customer due diligence and formulation of a risk-based AML program.
The auditors were required to weigh these questions, including whether the company boards had adequate, ongoing oversight of any AML program and whether provisions for risk mitigation and customer monitoring were in place.
Applicable breaches could result in civil penalties amounting to tens of millions of dollars, in addition to other corrective measures.
“Corporate bookmakers must have robust systems in place to ensure they can manage and mitigate risks associated with money laundering and terrorism financing,” AUSTRAC chief executive Brendan Thomas said in Thursday’s statement.
“Businesses without adequate processes in place to manage those risks leave themselves vulnerable to exploitation by criminals.”
AUSTRAC is yet to release any decision on the Sportsbet audit. An AUSTRAC spokesperson told Vixio GamblingCompliance on Thursday that the regulator had no comment on the matter.
The regulator is also yet to announce its verdict on a similar AML/CTF enforcement investigation into gambling giant Entain – trading locally through its Ladbrokes and Neds subsidiaries – that was announced in September 2022.
The latest AUSTRAC announcement comes as the federal government prepares its response to a parliamentary committee report that unanimously recommended a complete ban on online gambling advertising, to be phased in over three years.
Political pressure is building on the Labor government to deliver on that report amid intense industry lobbying.
Anti-gambling advocates, including an independent senator, have suggested that associated legislation would honour the legacy of committee chair Peta Murphy, who died of cancer in December.
