Entain Group Under Investigation for AML Violations

Overview

Entain Group (LON:ENT), operator of platforms like Ladbrokes (LON:LCL) and Neds, has faced criticism from AUSTRAC for alleged breaches of anti-money laundering (AML) and counter-terrorism financing (CTF) laws, resulting in a 7% drop in shares.

AUSTRAC Allegations

Australia’s anti-money laundering regulator claims that Entain did not implement a compliant AML program, making its platforms susceptible to criminal exploitation.

AUSTRAC CEO Brendan Thomas stated that these issues reveal significant failings in Entain’s governance, risk management, and operational controls.

Lack of Oversight

The regulator alleges that the company's board and senior management failed to provide adequate oversight of its AML/CTF program, compromising its ability to manage risks related to money laundering and terrorism financing.

Operational Vulnerabilities

Entain's 24/7 betting operations, accessible online, allegedly allowed unidentified individuals to fund gambling accounts using illicit cash through third-party channels.

A key focus of the claims is Entain's use of third parties for cash deposits, which AUSTRAC argues obscures the true origins of funds, enabling money laundering.

AUSTRAC also alleges that Entain lacked adequate customer verification and source-of-funds checks, increasing the risk of facilitating financial crimes.

Scrutiny on High-Risk Customers

Further scrutiny involves Entain's handling of high-risk customers. The regulator alleges inadequate due diligence was performed on 17 such accounts, with some identities concealed with pseudonyms.

This confidentiality practice is accused of hindering Entain’s ability to detect potential criminal misuse of its platforms.

Conclusion

This situation underscores the risks within the online betting sector when AML responsibilities are neglected, according to Thomas, who notes that money laundering often coincides with serious crimes like fraud and corruption.

Entain joins a growing list of gambling operators facing legal action over AML/CTF compliance deficiencies.