Sportsbet’s AUSTRAC action finalised

Australia’s financial intelligence agency AUSTRAC has finalised an enforceable undertaking with Sportsbet after determining the online bookmaker had addressed significant weaknesses in its anti-money laundering and counter-terrorism financing controls.

AUSTRAC Chief Executive Officer Brendan Thomas said the outcome sends a strong message to reporting entities about the importance of maintaining effective AML/CTF systems and taking swift action when compliance issues are identified.

“When AUSTRAC identifies systemic weaknesses in a reporting entity’s AML/CTF controls, we will take enforcement action to ensure those issues are addressed,” Thomas said.

“Sportsbet was required to undertake significant remediation to uplift its systems, controls and governance. AUSTRAC is now satisfied those requirements have been met.”

The enforceable undertaking was accepted by AUSTRAC in May 2024 after the regulator raised concerns about Sportsbet’s compliance with its obligations. Areas of concern included the company’s risk assessment processes, customer monitoring practices and suspicious matter reporting.

The issues were identified during AUSTRAC’s broader review of the corporate bookmaker sector, which has been a focus for regulatory scrutiny because of its exposure to money laundering and other financial crime risks.

Under the terms of the undertaking, Sportsbet was required to improve five key areas of its AML/CTF policies and procedures. AUSTRAC said the company undertook a substantial remediation program aimed at strengthening its systems, governance arrangements and compliance controls.

An independent external auditor assessed Sportsbet’s remediation efforts and provided assurance findings to AUSTRAC.

The review confirmed the company had implemented and operationalised all required measures, leading to the completion of the undertaking.

Despite the outcome, Thomas emphasised that AUSTRAC’s expectations for compliance remain unchanged.

“Completion of an enforceable undertaking does not lessen our expectations,” he said. “Businesses like Sportsbet operating in higher-risk sectors must maintain robust, risk-based systems to prevent criminal exploitation.”

AUSTRAC said it would continue to closely monitor the gambling sector, highlighting the heightened money laundering risks associated with online gambling platforms, where transactions can take place rapidly and often without face-to-face interaction.

It is currently involved in a prolonged case involving Entain, which is set to go to the Federal Court in late November.

It also launched an investigation into Tabcorp’s compliance in May.

 “The online gambling sector faces heightened threats from identity and payment fraud and it’s important that the whole sector continues to work to mitigate these threats,” Thomas said.

“Strong AML compliance is the best way to fight financial crime – let’s work together to stamp out criminal abuse of the online gambling sector.”