Entain Braces for Legal Battle in Australia over Alleged Compliance Failings

Australia’s financial intelligence agency alleges that the operator failed to appropriately address the risk of its websites being exploited by criminal organizations Image Source: Shutterstock.com

Entain, a leading player in Australia’s wagering market, is ready to defend itself in what could become a high-profile case under the country’s anti-money laundering laws. The company, which operates the Ladbrokes and Neds brands, has submitted a formal response to the Federal Court civil case brought by AUSTRAC, marking another high-profile gambling controversy in Australia.

Entain Highlighted Its Substantial Compliance Progress

The case revolves around alleged breaches of the Anti-Money Laundering and Counter-Terrorism Financing(AML/CTF) Act that happened between December 2018 and August 2024. According to AUSTRAC, the operator failed to implementadequate checks and controlsto prevent bad actors from using its platforms for illegal activities. AUSTRAC highlighted 17 “high-risk” customer accounts that moved over AUD 152 million($100 million).

Entain’s defence admitted that the company’s compliance program was not up to par during that period. However, the operator disputes several of AUSTRAC’s interpretations. Entain remains adamant that itfollowed expert adviceat the time and its shortcomings were due to misjudgment rather than an intention to break the law. Andrew Vouris, CEO of Entain Australia and New Zealand, noted that the company has since made significant improvements.

Entain has fundamentally transformed its approach to compliance and now operates a market-leading program, underpinned by a compliance-first culture.

Andrew Vouris, Entain Australia and New Zealand CEO

The operator notes that it hasupdated its approachto compliance since AUSTRAC’s investigation, investing in new systems, governance, and training. Entertain now claims it hasincreased its spendingon  AML and counter-terrorism financing staff tenfold while implementing stricter customer identification, monitoring, and reporting controls. High-risk payment methods such as cash deposits have been completely removed.

Potential Penalties Could Reach Hundreds of Millions

AUSTRAC’s initial investigation into Entain was highly critical, even describing the company as a “high-risk remittance provider.” However, the watchdog later retracted these claims. Meanwhile, Entertain pointed out that all 17 accountsidentified by AUSTRAC were closed before the regulator launched its investigation. The company claims that itno longer maintains any business relationships that could pose similar risks.

Nevertheless, the sngakes remain high. If the Federal Court sides with AUSTRAC, Entain could face fines ofup to several hundred million dollars. Entain’s UK-based parent has already set aside AUD 100 million ($66 million) as a precautionary provision. However, CEO Stella Davidnoted that this does not represent an agreed or expected penalty.

Previous enforcement actions under the same law targeted casino operators Crown and SkyCity,resulting in fines of AUD 450 million ($296 million) and AUD 67 million($44 million), respectively. However, these two companies primarily ran land-based casinos, unlike Entain’s mostly digital presence. Online operators have so far managed toavoid court proceedings, often resolving issues through enforceable underngakings.