Sportsbooks urged to up their game when it comes to AML in Australia

Sportsbet and bet365 have fallen under the regulatory spotlight in Australia, as the country’s financial watchdog continues its ‘extensive supervisory campaign’.

The Australian Transaction Reports and Analysis Centre (AUSTRAC) has confirmed the appointment of external auditors to take a closer assessment of both companies, when it comes to compliance with national money laundering and anti-terrorist financing legislation.

AUSTRAC states that the end objective of the audit is to assist both brands – international operators in Australia with bet365 based in Stoke, UK and Sportsbet part of Flutter Entertainment – with the aforementioned compliance requirements as well as informing the authority as to whether regulatory action will be necessary.

The supervisory campaign into Australian sportsbooks’ money laundering compliance standards, as described by AUSTRAC, began in September with an investigation into Entain, itself an overseas operator in Australia via its Ladbrokes and Neds holdings.

“Sportsbet and bet365 are amongst the largest operators in the corporate bookmaking sector. AUSTRAC is putting the whole industry on notice to lift their game,” said Nicole Rose, AUSTRAC Chief Executive.

“Ultimately, enforcing non-compliance is about protecting the community. Money laundering feeds organised crime and all the harm that comes with it.  We need businesses at the front line to fully comply with the AML/CTF Act – to understand and mitigate their risks and report suspected crimes.”

Specifics of the investigation will see bet365 and Sportsbet evaluated against four key criteria relating to the provisions of the AML/CTF Act and Anti-Money Laundering and Counter-Terrorism Financing Rules Instrument 2007.

Auditors have 180 days to report back to AUSTRAC with an update on where bet365 and Sportsbet have a framework allowing senior management and board member oversight of Part A programmes.

The firms will also be judged on whether they are appropriately monitoring customers to identify, mitigate and manage the risk of money laundering.

Lastly, the 180 day evaluation will also determine whether the companies have adapted and maintained an AML/CTF programme using risk-based systems and controls and have undertaken an ML/TF Risk Assessment considering the risk posed by ‘their customer types’, as well as designated services and the methods used to deliver these.

Rose concluded: “AUSTRAC will not hesitate to take action where suspected non-compliance is identified, to protect businesses from being exploited and protect the Australian community from harm.”

The investigation comes amid a backdrop of increased public and political attention towards the gambling industry in Australia, with much of this focused on social responsibility requirements. 

Shortly after the commencement of AUSTRAC’s ‘supervisory campaign’ with the Entain assessment, a House of Representatives Standing Committee initiated an inquiry in betting and gaming, specifically examining societal impacts and consumer protection issues.

More recently, Australian operators were told that they must update their social responsibility messaging – the long-used ‘gamble responsible’ phrase has now been replaced with seven new taglines, including some which remind customers of the potential to lose.