bwin parent Entain violates money laundering and terrorist financing laws in Australia

Gambling providers repeatedly come into conflict with regulations - usually not deliberately, but rather by mistake. This is probably also the case with the current case involving the bwin operator Entain. As announced by the Australian authority for combating serious abuse of the local financial system, legal proceedings have been initiated against the group. The accusation of "breaches of the Anti-Money Laundering and Counter-Terrorism Financing Act" sounds pretty awesome at first. Let's take a look at what's behind it.

Australians gamble with a passion that is unparalleled anywhere in the world. Whether it's slot machines, the lottery, betting or horse racing - the whole country seems to be in the throes of happiness. But with the desire to take risks comes the burden of problems: Australians are losing more and more money on gambling, for example, and gambling addiction is apparently getting increasingly out of control. That's why advocates have long wanted a ban on advertising, which many celebrities also campaigned for in 2024 - but somehow the decision is still stalling.

Strict and strange laws at the same time

Of course, such a passion for gambling cannot remain unregulated. Australia has some of the strictest and most curious laws in the world.

• The Interactive Gambling Act of 2001 makes short work of many online offers such as casinos and poker sites - at least officially. The black market is more or less tolerated.
• Sports betting, on the other hand, is officially allowed to run online. But beware of live betting: They are only allowed over the phone, as if the year 1999 had never ended.
• Advertising? Strictly prohibited during sports broadcasts. And using credit cards for gambling is also no longer an option in many places.

Gambling as a playground for criminals

The Anti-Money Laundering and Counter-Terrorism Financing Act (AML/CTF Act for short) plays a central role in all of this. As gambling is seen as a hotspot for criminals, the industry is under close scrutiny by the financial authorities. The main aim is to put a stop to money laundering and terrorist financing. And if someone breaches these rules, whether deliberately or accidentally, it quickly becomes expensive - very expensive. Fines in the millions are not the exception, but rather the rule.

Entain on the hook

Now a really big fish has been caught in the net of the Australian regulators: Entain, the giant behind brands such as bwin, Ladbrokes and BetMGM. With a foot in pretty much every betting country and a turnover to match, Entain is facing the Australian justice system. But before the rumor mill starts churning: No, Entain is not suspected of directly supporting terrorists. The connection only arises from the fact that Australia's anti-money laundering and anti-terrorism laws are regulated in one package.

Nevertheless, the allegations are anything but harmless. According to a press release from the financial regulator AUSTRAC (responsible for detecting money laundering, organized crime, tax evasion, welfare fraud and terrorist financing), Entain has committed "serious and systematic offences". The criminal proceedings are ongoing - and the punishment? Well, Entain himself is expecting a "potentially substantial" sum. Translated: It's going to be really expensive. But how much exactly? Let's take a look at that in a moment.

Entain faces a fine in the millions

"Premier!" - but not one that Entain will be celebrating. In an official statement on the matter, AUSTRAC boss John Thomas announced that this is the very first time that his authority has taken civil penalties against a provider from the online betting industry.

Thomas leaves no doubt: "The gambling industry - and indeed all businesses regulated by AUSTRAC - must take their anti-money laundering and counter terrorist financing obligations seriously. This includes knowing who their customers are, even if they use third-party providers for transactions."

In other words: no excuses, no loopholes - those who play by the rules must do so.

Entain is in good company in this regard: AUSTRAC has actually made other big boys from the gambling industry pay in the recent past.

• Crown Resorts had to pay a whopping 450 million dollars (yes, you read that right!) in fines - that's more than the average online casino makes in ten years.
• SkyCity was also hit with a 63 million dollar fine.
• Sportsbet avoided a hefty fine, but had to agree to an "enforceable promise" - whatever that means in officialese.
• And then there's the Star case, which is still haunting the courts but is also expected to result in a huge fine.

So it's no wonder that Entain is bracing itself for a "potentially substantial" fine. AUSTRAC is setting a clear tone: With the publication of the National Risk Assessment on money laundering last year, the vulnerability of online betting operators to dubious money flows was once again underlined in bold letters. Anyone who does not take this "useful resource" seriously will feel the heavy hand of the regulatory authority. Incidentally, Entain withdrew from more than 140 unregulated markets in 2024.

So what exactly did Entain do wrong?

It was already mentioned in the last paragraph: Entain apparently had no overview of users and cash flows. Sounds harsh? Well, according to the Australian financial regulator AUSTRAC, this is unfortunately no exaggeration. In their press release, the investigators really spill the beans. But let's take a closer look at what went wrong.

• Management without insight: Entain's board and senior management had no clue how effective or ineffective their anti-money laundering and countering the financing of terrorism (AML/CTF) program really was, according to AUSTRAC. Without clear controls, they were unable to adequately assess the risks of money laundering or the vulnerability of their system to criminals.
• Round-the-clock risks: Entain offers its websites or apps 24/7, but apparently does not have sufficiently differentiated control mechanisms to monitor potential criminal activity. Particularly piquant: via third-party providers, for example stationary betting shops with accounts on the platforms, unknown persons have also been able to access the services around the clock - without Entain taking a closer look.
• Cash - the darling of the shadow world: third-party providers, including official companies, but possibly also criminal individuals, accepted cash deposits in order to have them credited to betting accounts. Cash is always problematic. It is difficult to trace and therefore perfect for laundering dirty proceeds. The Antepay case was similar: Cash was exchanged for prepaid cards in special bars and then gambled with these directly on site in illegal online casinos.
• Loss of control among customers: According to AUSTRAC, Entain did not have sufficient mechanisms in place to check who was actually depositing money - let alone where the money was coming from. In short: you didn't always know who you were dealing with.
• "Privacy first" - even for criminals: A particularly odd point: Entain is said to have deliberately used pseudonyms to conceal the identity of 17 "high-risk customers". Officially to protect the privacy of customers - in practice a gift for criminals who wanted to remain undetected.

Even Gavin Isaacs, Entain's CEO, sounded less than relaxed in his comments, which could be read in various stock exchange news tickers. While he stated that the allegations were being taken "extremely seriously" and that they had cooperated fully with AUSTRAC throughout the investigation, he also acknowledged that there was still work to be done:

"We are continuing to enhance Entain Australia's anti-money laundering and anti-terrorist financing measures. While we still have some further improvements to make, we expect these to be implemented in line with the plan we shared with AUSTRAC in 2023."

Source of the image: https://pixabay.com/illustrations/ai-generated-money-laundering-8829029/

Central text sources: https://www.austrac.gov.au/news-and-media/media-release/austrac-takes-ladbrokes-and-neds-operator-entain-federal-court-over-serious-non-compliance-australias-money-laundering-laws, https://de.marketscreener.com/kurs/aktie/ENTAIN-PLC-4005005/news/Labrokes-Eigentumer-Entain-sieht-sich-in-Australien-einer-Untersuchung-wegen-Geldwasche-gegenuber-48597118/