Online gambling companies Sportsbet and Bet365 will be investigated by law enforcement to determine whether they enabled criminal activity. The investigation was announced yesterday by Australia’s financial crime watchdog, AUSTRAC.
AUSTRAC said it had “reasonable grounds to suspect” the companies had failed in their obligations to prevent their betting platforms being used for money laundering or the financing of terrorism.
It follows similar investigations announced in September into international betting company Entain, which owns Ladbrokes and Neds.
Just like other companies that handle a lot of money (like banks), betting companies have legal obligations to make sure they don’t accept money for criminal purposes.
Two examples of criminal purposes are the financing of terrorism and money laundering.
Money laundering is the practice of converting ‘dirty’ money from the proceeds of crime into ‘clean’ money by making it look like it’s come from a legitimate source – for example, by putting money onto a betting platform and cashing it out again.
AUSTRAC said yesterday it had ordered an external audit of Sportsbet and Bet365 as it suspected they had failed to comply with their obligations. This came after an “extensive supervisory campaign” within the corporate bookmaker sector.
Both companies were accused of failing to have adequate controls to detect and manage potential money laundering or terrorist financing.
Sportsbet and Bet365 have been instructed to appoint an external auditor to investigate whether there has been a breach of law.
The auditors must be approved by AUSTRAC, and must report back to AUSTRAC within six months.
Both companies could be issued multi-million dollar fines if they are found to have breached their legal obligations.
The CEO of AUSTRAC, Nicole Rose, said that their investigation was “putting the whole industry on notice to lift their game”.
“Money laundering feeds organised crime and all the harm that comes with it. We need businesses at the front line… to understand and mitigate their risks and report suspected crimes.”