AUSTRAC Probes Possible Bet365 AML & CTF Regulatory Breaches

Bet365 under scrutiny for potential AML non-compliance in Australia.

Could Bet365 be landing in hot water with Australia’s financial regulator? Here’s the latest.

Australia’s financial watchdog, the Australian Transaction Reports and Analysis Centre (AUSTRAC), has launched a formal investigation to determine whether British gambling operator Bet365 is in compliance with Australia’s money laundering laws, sparked by a report attached to an external audit.

This led to AUSTRAC ordering a fresh audit to be carried out on Bet365 to ascertain that the company is in line with the law, as well as to identify and mitigate any potential risks related to money laundering or terrorism funding.

As competitive as the online gambling industry is, operators have the responsibility to not only keep themselves up to date with regulatory frameworks, but also ensure regular audits are made to ensure legal operation. Jason Atkins, who is a Casino Review Specialist as also expressed his concern:

“Gambling entities and sports betting companies are especially vulnerable to exploitation, which necessitates the implementation of Know Your Customer (KYC) protocols. These systems are crucial for meticulously monitoring customer transaction behaviours. Upon identifying any suspicious activities, these organizations are required to intervene with appropriate measures to address the issue and to submit detailed reports to the appropriate regulatory bodies.”

AUSTRAC reserve the right to take action whenever there are signs of non-compliance and is in a position to issue fines as well as push other regulatory enforcements if and when required.

Let’s Break It Down

The largest cause for concern here is that criminals could be making use of companies with the intention of hiding funds that have been obtained via illegal sources, or by funding terrorist organisations. Gambling and sports betting companies are particularly vulnerable to this form of exploitation, which is why a series of KYC systems have been implemented along the years. These checks closely monitor transaction activity, flagging any potential issues along the way.  Should this ever be the case, then the system triggers a series of actions to mitigate the situation, as well as to report it to the relevant authorities and regulatory bodies if necessary.

Following suspicions raised in 20022, AUSTRAC approved three independent auditors to examine Bet365’s compliance with Australia’s Anti Money-Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF), while also creating a report that would outline any potential issues. This report is now complete.

According to a statement issued on behalf of Mr Brendan Thomas, CEO at AUSTRAC, it is vital for corporate bookmakers to implement “robust systems in place” to make sure they’re able to “manage and mitigate the risks associated with money-laundering and the financing of terrorism”. He also warned that any business that was unable to implement these systems would be at a higher risk to be targeted by criminal activity.

Could This Mean Trouble?

At the moment it’s still unclear whether Bet365 is to become the latest gambling provider to be fined for no-compliance under Australian law. This news comes around at a time when AUSTRAC and Crown Resorts reached an agreement in July 2023, resulting in a financial penalty as a result of AML breaches.

Similar investigations and legal proceedings carried out by AUSTRAC have included other companies such as Sportsbet, Ladbrokes, Sky City and Star Entertainment Group amongst others, placing these providers in similar waters.

Bet365 Posts Loss for FY2022-23

Despite registering an increase of almost 19% in gaming and sports betting revenue during the 2022-23 financial year, Bet365 has still reported a loss of over £61 million, which comes into sharp contrast with the £76.1 million profit acquired the year before.

The latest financial report sees an increase of over 4% related to direct costs, while administrative expenses are almost up by around 42%. There was also a substantial increase in investments, with Bet356 noting that the increase in expenditure was aimed at growing its presence in North America, as well as launching in other US States and in Ontario Canada where it is the current market leader.

_An Edhat Reader

Written by _An Edhat Reader

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