Australia's financial crime watchdog orders audit of Flutter's Sportsbet and Bet365 over money laundering concerns

Australia’s financial crime watchdog AUSTRAC (Australian Transaction Reports and Analysis Centre) has ordered an audit of the country’s largest online betting house, Sportsbet, operated by Flutter Entertainment; and British gambling firm Bet365, to assess their compliance with financing laws. 

External auditors must report within six months whether the firms are well placed to identify and mitigate money laundering and terrorism financing, conduct risk assessment, and have necessary oversight, according to the Centre. 

The outcomes of the audit will force Sportsbet and Bet365 to comply with anti-money laundering and counter-terrorism financing obligations, and inform AUSTRAC whether any further regulatory action is required. 

As reported by Reuters, a Sportsbet spokesperson stated the move comes after a periodic compliance assessment of the firm between 2016 and 2020, and highlighted the appointment of a regulator-authorized auditor “is not an enforcement investigation."

“We have enhanced our program and practices, including conducting an independent review. Sportsbet continues to invest heavily in AML/CTF compliance and in our people, processes and systems,” they added. 

Financial Counseling Australia’s Lauren Levin welcomed the investigation into the bookmakers but stated she is yet to see evidence of any gambling operators taking their responsibility seriously as the watchdog has failed to produce a comprehensive assessment of the industry.

“Gambling is an inherently high-risk product that harms a lot of people and the current siloed regulatory approach is failing to mitigate the risks it poses. AUSTRAC works in a silo. The state gambling regulations work in their own silos, and ACMA has its own silo,” Levin said, as reported by The Sydney Morning Herald.

She also stated that AUSTRAC’s “superpower” was its ability to impose large fines, and added that if the Centre goes down that track, “I would then hope the state regulators would look at the operators’ suitability" to hold a license. "If the operators have disregard for our lives, then one would seriously have to question their suitability to hold a license," she added.

AUSTRAC chief executive Nicole Rose said the regulator was putting the “whole industry on notice” amid reasonable concerns the groups may have contravened the Anti-Money Laundering and Counter-Terrorism Financing Act. 

“Sportsbet and Bet365 are among the largest operators in the corporate bookmaking sector. AUSTRAC is putting the whole industry on notice to lift their game,” Rose said in a statement on Thursday morning. 

She said the financial crime watchdog would 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 Australian government tightened the rules around gambling advertising on Wednesday, but did not ban the practice entirely. From April, the “gamble responsibly” tagline will be retired and replaced with one of other seven options, including “chances are you’re about to lose.”

While Australia’s gambling industry has been scrutinized in recent years due to alleged money laundering by its biggest casino operators, online betting has also come under the scanner as its prevalence boomed during the pandemic. Back in September, AUSTRAC opened an investigation into Britain’s Entain, which owns about one-sixth of Australia’s online betting market via the Ladbrokes brand.