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Austrac launches investigation into Bet365 over potential AML failings

| By Kyle Goldsmith
The Australian Transaction Reports and Analysis Centre (Austrac) has commenced an investigation into Bet365 over potential breaches of anti-money laundering (AML) and counter-terrorism financing (CTF) laws.
Austrac Bet365

Austrac ordered an audit of Bet365 in 2022, when it assessed its compliance with the AML/CTF Act 2006. The consideration of that audit has led Austrac to deem further investigation into Bet365’s affairs as necessary.

Austrac reserves the right to take action where non-compliance is found. The government-run financial intelligence agency has fines and other regulatory powers at its disposal.

“Corporate bookmakers must have robust systems in place to ensure they can manage and mitigate risks associated with money laundering and terrorism financing,” said Brendan Thomas, Austrac chief executive.

“Businesses without adequate processes in place to manage those risks leave themselves vulnerable to exploitation by criminals.”

Bet365 in potential hot water with Austrac

Bet365 could become the latest betting company to be fined for non-compliance in Australia. Austrac reached an agreement with Crown Resorts in July 2023 for a financial penalty over AML breaches.

Australia’s federal court ordered Crown to pay a penalty of AU$450m (£232.9m/€272.5m/$296.9m) for “serious and systemic” AML and CTF failings at the operator’s Crown Melbourne and Crown Perth casinos. This is to be paid over two years, with Crown since admitting the breaches.

Examples of the high-risk activites included Crown continuing a business relationship with a major casino junket operator until 2021, despite being aware of allegations the operator was connected to organised crime.

Entain, meanwhile, has also been under Austrac investigation since September 2022 for AML/CTF concerns, with that case yet to be resolved. Austrac stated the probe into Entain could lead to other bookmakers coming under the spotlight.

Austrac also launched federal court proceedings against Star Entertainment Group and SkyCity Adelaide in 2022. These were both for breaches of AML and CTF laws. The two companies are waiting for the outcome of their respective cases.

In August, SkyCity made a provision of AU$45m ahead of an assumed civil penalty from Austrac.

Bet365 posts FY2022-23 loss

Despite posting an 18.9% increase in sports betting and gaming revenue to £3.39bn during its 2022-23 financial year, Bet365 still reported a £61.2m loss. This came after the operator generated £42.8m in profit the year prior.

Direct costs were 4.1% higher at £516.6m, with administrative expenses also up by 42.2% to £2.93bn. Operating loss for the year amounted to £37.3m, compared to a £15.4m profit in 2021-22. A further £62.6m loss was noted in fair value on investments. However, this was slightly rebuffed by £27.2m in interest income.

However, Bet365 noted the increased spending set the company up to produce higher revenues during the year. The operator is growing its presence in North America, launching in a number of US states, as well as Ontario in Canada where it is the market leader.

Ed Birkin, senior analyst at H2 Gambling Capital, believed Bet365’s increased outlay could end up paying dividends, stating: “I would expect Bet365 to be very much competing with the Tier 2 operators such as BetMGM and ESPN Bet in terms of sports betting. I view the US as a big opportunity for the group.”

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