The FTSE 100 gambling behemoth Entain has been dragged into legal proceedings by Australia’s financial crime watchdog over alleged “systemic failures” in its anti-money laundering protocols. The Australian Transaction Reports and Analysis Centre (Austrac) has initiated civil penalty proceedings against Entain’s Australian subsidiary, marking a significant escalation in regulatory scrutiny.
The investigation, which commenced in September 2022, centres on claims that Entain’s online betting platforms were left vulnerable to criminal exploitation. Austrac’s allegations paint a concerning picture of inadequate oversight from the board and senior management, particularly regarding the handling of 17 high-risk customers.
In a troubling revelation, the watchdog asserts that Entain employed pseudonyms to mask the identities of high-risk clients within its systems. The company’s shares plummeted 6.3 per cent to 763¾p following the announcement, reflecting investor unease about potential penalties.
Gavin Isaacs, who took the helm as chief executive in July, emphasised the company’s commitment to compliance, stating they take the allegations “extremely seriously.” Despite the regulatory cloud, Entain maintains optimistic financial projections, with adjusted underlying earnings expected to reach the upper end of their £1.04 billion to £1.09 billion guidance range.
The gambling giant’s regulatory woes extend beyond Australian shores. Last year, Entain reached a settlement with HM Revenue & Customs, agreeing to pay £585 million over alleged bribery offences in its former Turkish operations. The company also faced a £17 million fine from the UK Gambling Commission for regulatory breaches in 2022.
Industry analysts at Jefferies suggest the Australian proceedings could span up to two years, with potential penalties ranging from £20 million to £225 million, based on precedent cases. The outcome remains uncertain, but Entain acknowledges the possibility of a “potentially material” penalty.
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