The Australian Transaction Reports and Analysis Centre (AUSTRAC) has initiated an investigation into Bet365, an online gambling firm, during the concerns of non-compliance with anti-money laundering (AML) and counter-terrorism financing (CTF) laws.
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AUSTRAC’s decision to probe Bet365 follows a series of actions taken against other entities within the gambling industry.
The watchdog previously ordered an external audit of Bet365 in 2022 to assess its compliance with the AML/CTF Act 2006.
AUSTRAC’s decision to launch the investigation has increased regulatory action targeting entities operating within the gambling industry.
Previous directives from AUSTRAC compelled Bet365 to undergo an external audit in 2022 to evaluate its compliance with the AML/CTF Act 2006.
The decision to escalate the investigation suggests that AUSTRAC may have uncovered irregularities or concerns during the audit process.
Regulatory authorities, led by AUSTRAC CEO Brendan Thomas, have addressed the critical importance of robust compliance measures within the gambling sector.
Thomas said the inherent risks associated with protocols, noting that businesses without sufficient safeguards are vulnerable to exploitation by criminal elements seeking to launder illicit funds or finance terrorist activities.
The Platforms exposure to regulatory penalties show the severity of non-compliance with AML/CTF laws. Under Australian legislation, companies found guilty of violating these laws face financial penalties, with fines reaching up to $22 million.
Past precedents, such as the $45 million penalty imposed on Tabcorp in 2017, is a reminders of the consequences for firms failing to meet regulatory standards.
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The investigation into the company is emblematic within the global gambling industry, where regulatory authorities are increasingly prioritizing efforts to combat financial crime.
The expansion of online gambling, particularly during the COVID-19 pandemic, has started problems about the efficacy of existing regulatory frameworks in addressing AML risks.
The Company reported an 18.9% increase in sports betting and gaming revenue during the 2022-23 financial year. The regulatory surrounding online gambling in Australia has become stringent in recent years.
Businesses operating in this sector are obligated to implement robust systems to detect and prevent illicit financial activities, such as money laundering and terrorist financing.
AUSTRAC CEO Brendan Thomas addressed the importance of maintaining such systems, stating that inadequate protocols could leave companies vulnerable to exploitation by criminals.
Any breaches of AML/CTF laws by Bet365 could result in penalties, including fines of up to $22 million. This underlines the seriousness with which AUSTRAC views compliance within the gambling industry. Previous cases, such as the $45 million penalty imposed on Tabcorp in 2017.
Other companies, including Entain (owner of Ladbrokes and Neds), have also faced investigations by AUSTRAC over AML concerns.
The industry’s growth, particularly during the COVID-19 pandemic, has concerns about the potential for illicit financial activities to occur unchecked.
While Bet365 reported a loss in the 2022-23 financial year, its revenue from sports betting and gaming saw an increase. Despite this, the company’s operating expenses also rose, resulting in a net loss.
The company remains optimistic about its future, particularly in North America, where it is expanding its presence in various states.
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