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Austrac investigates Bet365 for possible AML failures

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Austrac, the Australian Transaction Reports and Analysis Centre has launched an investigation against Bet365 for possible violations of laws against money laundering and anti-terrorism funding (CTF).

Austrac, in its assessment of Bet365’s compliance with AML/CTF Act 2006 (2006), ordered an audit to be conducted by 2022. Austrac has deemed that further investigations into Bet365 are necessary after assessing the audit.

Austrac has the authority to act if it finds that there is a violation. Austrac, the government’s financial intelligence agency, has fines as well as other regulatory powers.

Brendan Thomas is Austrac’s chief executive. He said that corporate bookmakers need to have robust systems so they can mitigate the risks of money laundering and terrorist financing.

Businesses that do not have adequate procedures in place to mitigate these risks are vulnerable to criminal exploitation.

Austrac could get Bet365 into hot water

Bet365 may be the next betting company in Australia to face a fine for not complying with Australian laws. Austrac and Crown Resorts reached an agreement in July 2023 to impose a fine for AML violations.

Australia’s federal court ordered Crown to pay a penalty of AU$450m (PS232.9m/EUR272.5m/$296.9m) for “serious and systemic” AML and CTF failings at the operator’s Crown Melbourne and Crown Perth casinos. Crown has admitted to the violations and will pay this over a period of two years.

Crown, for example, continued to do business with a casino junket operator despite knowing that the operator had been linked to organized crime.

Austrac has been investigating Entain since September 20, 2022, for AML/CTF issues. This case is still pending. Austrac said the investigation into Entain may lead to the scrutiny of other bookmakers.

Austrac will also file federal court actions against Star Entertainment Group in 2022, and SkyCity Adelaide. Both were for violations of AML/CTF laws. Both companies await the results of their cases.

SkyCity set aside AU$45m in August to cover a civil penalty that Austrac had imposed.

Bet365 reports FY2022-23 Loss

Bet365 reported a loss of PS61.2m despite an increase by 18.9% in its sports betting and gaming revenues to PS3,39bn for the 2022-23 fiscal year. The operator had made PS42.8m profit in the previous year.

Administrative expenses increased by 42.2%, or PS2.93bn. Direct costs rose 4.1% to PS516.6m. The operating loss was PS37.3m for the fiscal year, as opposed to a profit of PS15.4m in 2021-22. Fair value of investments also showed a loss of PS62.6m. This was somewhat offset by PS27.2m of interest income.

Bet365 stated that the higher spending had helped the company to generate more revenue during the course of the year. Bet365 is expanding its North American presence, having launched in several US states as well as Ontario, Canada, where it leads the market.

Ed Birkin is a senior analyst with H2 Gambling Capital. He believes Bet365 could reap the rewards of its increased investment. “I expect Bet365 will be competing very strongly in sports betting against Tier 2 operators like BetMGM or ESPN Bet.” The US is a huge opportunity for Bet365.

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