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Australia’s leading corporate bookmaker Sportsbet has escaped a fine from financial transactions watchdog AUSTRAC over anti-money laundering (AML/CTF) compliance failures, but will be closely monitored over a two-year remedial period.
The Flutter subsidiary avoided a potential fine in the tens of millions of dollars after being investigated for suspected contraventions of three sections of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006.
But Sportsbet will be under scrutiny for at least two years as it executes a compliance recovery “action plan” for adopting and maintaining an AML/CTF programme, conducting appropriate risk assessments, and performing ongoing due diligence for higher risk customers.
AUSTRAC on Thursday (May 30) said in a statement that it accepted an “enforceable undertaking” from Sportsbet requiring an external auditor to supervise its remedial action plan, including an initial December 2024 deadline applying to suspicious transactions and high-risk customer screening methods.
AUSTRAC’s decision follows an assessment of an external auditor’s report into the alleged contraventions that were delivered to the regulator in September 2023.
“In light of the findings of the External Audit Report, AUSTRAC remains concerned that Sportsbet failed to comply, and may remain non-compliant, with provisions of the AML/CTF Act,” the undertaking document states.
“While holding these concerns, AUSTRAC acknowledges that Sportsbet has demonstrated a commitment to remediating its AML/CTF compliance issues as part of an extensive [three-part] remediation program.”
Later remedial plan and progress report deadlines in February, March and November of 2025 will apply for more comprehensive due diligence, risk mitigation and case management programmes, according to the undertaking.
The new external auditor’s report on the full implementation of the remedial programme is due by March 2026. Sportsbet must file the report and its response to AUSTRAC 45 days after receiving it.
AUSTRAC CEO Brendan Thomas said on Thursday that the remedial programme “binds” Sportsbet to a “programme of work”.
“We will be monitoring Sportsbet throughout this process to ensure it meets these obligations, and there will be consequences if it does not,” he said.
“Betting agencies, like all regulated entities, have a significant role to play in combating financial crime.
“This undertaking will ensure that Sportsbet commits sufficient resources to adequately implement its remediation program promptly, or risk further enforcement action.”
Sportsbet was slugged with A$3.7m (US$2.4m) in fines and customer compensation and a compulsory governance review by the national online gambling regulator, the Australian Communications and Media Authority (ACMA), in February 2022 over illegal spamming. That followed several state government regulator prosecutions over illegal advertising.
However, after reprimanding two Australian banks with fines of A$1.3bn (US$860m) and A$700m (US$462.6m) over AML breaches, AUSTRAC has become the leading punitive overseer of Australia’s gambling industry after slapping a A$450m (US$297m) AML-related fine on casino operator Crown Resorts and a A$67m fine on Adelaide casino operator SkyCity Entertainment Group.
A similar fine is in the offing for Crown rival The Star Entertainment Group, which has also undergone an extensive AUSTRAC investigation for AML failures.
But AUSTRAC’s remedial, non-fine punishment for Sportsbet points to a calibrated approach in its more recent probing of wider online gambling operations.
The regulator is still investigating corporate bookmaker bet365 over alleged contraventions of two sections of the AML/CTF Act. That probe was announced in tandem with the Sportsbet investigation in November 2022.
