Australian Regulator Orders AML Audits For bet365, Sportsbet

November 3, 2022
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Australia’s financial transactions regulator has ordered Flutter Entertainment-owned Sportsbet and bet365 to be audited after claiming “reasonable grounds” to suspect the bookmakers violated or are violating anti-money laundering (AML) legislation.

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Australia’s financial transactions regulator has ordered Flutter Entertainment-owned Sportsbet and bet365 to be audited after claiming “reasonable grounds” to suspect the bookmakers violated or are violating anti-money laundering (AML) legislation.

The Australian Transaction Reports and Analysis Centre (AUSTRAC) said on Thursday (November 3) that it ordered the probes after an “extensive supervisory campaign that assessed entities within the corporate bookmaking sector”.

AUSTRAC’s letters to the companies on November 2 say both are suspected of contravening Sections 36 and 81 of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006, which require ongoing customer due diligence and the existence of an AML program, respectively.

Sportsbet is also suspected of contravening Section 82 of the act that requires compliance with “Part A” of an AML program. "Part A" of the program requires identification, mitigation and management of AML risk.

These three sections of the act attract civil penalties, including potential fines in the tens of millions of dollars and other enforcement actions.

The probes come less than two months after AUSTRAC launched an “enforcement investigation” into the Australian operations of Isle of Man-based Entain, confirming that the AML regulator accelerated industry-wide scrutiny.

The AUSTRAC chief executive said in the statement that the probes not only target companies that are “among the largest operators in the corporate bookmaking sector”, but also are “putting the whole industry on notice to lift their game”.

“Our work on the gambling sector in the last couple of years [shows] there’s certainly a common theme: that they don’t think enough about their money laundering and financial crime systems,” she said.

Bet365 and Sportsbet are required to nominate three auditing candidates by the end of this month. AUSTRAC will select one from each list to perform the audit on the companies.

The auditors, paid for by the companies but answerable to AUSTRAC, are required to submit their reports within 180 days of their engagement.

The reports must assess if the companies have adopted adequate risk-based AML programs, particularly in regard to risk from “customer types” and “designated services”, if their boards have “ongoing oversight” of the programs, and if appropriate customer monitoring and mitigation risk systems are in place.

After years of state government crackdowns on the disgraced land-based casino sector and expert scrutiny of criminal activity at ubiquitous slot machine outlets, Australian federal agencies are now paying much closer attention to online wagering.

Most litigation against Australia’s corporate bookmakers in the last decade has been at the hands of the New South Wales (NSW) state government, which has secured mostly modest fines over advertising breaches, but with little deterrent effect.

A notable exception to this trend occurred in 2016, when the Australian Competition and Consumer Commission, a federal agency, fined bet365 A$2.75m (then £1.4m) for deceptive and misleading practices involving a “free bet” promotion.

However, an expansive public and political backlash against sports betting, and sports-betting advertising in particular, forced the federal government in 2018 to develop a National Consumer Protection Framework ​​​for online gaming across all states and territories.

The framework was tweaked again on Tuesday when the federal government ordered seven toughly worded responsible gambling warnings to be rotated in all online wagering advertisements and promotions, replacing the generic “gamble responsibly”.

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