Tabcorp CEO Adam Rytenskild has criticised Australia’s state-based gambling regulatory model and called for the introduction of a national framework.
Rytenskild, who spoke at the Regulating the Game conference in Sydney this week, argued that Australia’s “patchwork quilt” of regulation has led to the proliferation of gambling ads on Australian TV and that a national framework would provide necessary community safeguards.
No uniform regulation
Gambling in Australia is regulated at both state and federal levels, with each of the eight mainland states and territories regulating gambling within their respective jurisdictions.
There is no single overarching statute or authority for gambling.
However, a series of federal statutes cover certain aspects of gambling activity, for instance AML and CFT safeguards, throughout Australia.
Tabcorp, the country’s biggest domestic wagering company, holds licences in Queensland, Tasmania, New South Wales, Victoria, South Australia, the Australian Capital Territory and the Northern Territory.
Most iGaming operators hold licences from the Northern Territory Racing Commission (NTRC), including Flutter Entertainment-owned Betfair and Sportsbet, and Entain, which is active in Australia via its Neds and Ladbrokes brands.
Rytenskild supports creating a single national regulator to ensure consistency, strong integrity arrangements and consumer protections, he said, adding that gambling regulators should lead the charge, rather than government.
Advertising ban
Moreover, Rytenskild called for gambling advertising to be stopped on free-to-air television between 6.30am and 8.30pm.
Tabcorp will voluntarily stop advertising on free-to-air television at these times, he revealed.
“We believe there is too much gambling advertising, and that people should be able to watch live sport without being inundated by gambling advertising,” he said.
Second AML unit
Meanwhile, the Guardian Australia reported that Australia’s financial crime watchdog, the Australian Transaction Reports and Analysis Centre (Austrac), has established a second specialist unit to combat the growing risk of money laundering in the gambling industry.
At the conference, Austrac informed industry officials about the new unit and cautioned that they had discovered “serious non-compliance” across several businesses.
Last year, Austrac launched investigations into Sportsbet, bet365 and Entain over suspicions they had failed to comply with the country’s anti-money laundering and counter-terrorism financing (AML/CTF) rules.
The Swedish Gambling Authority (SGA) has imposed financial penalties on Kindred, ATG and PinBet for serious shortcomings in their anti-money laundering measures.
Kindred subsidiary Spooniker received a warning and a sanction fee of SEK10.9m (€926,394), while horseracing and betting operator ATG was ordered to pay SEK6m (€550,879) and PinBet was issued a penalty of SEK2m (€183,626).
In all three cases, the SGA analysed the operators’ AML/CFT processes and reviewed the transaction history of randomly selected, high-depositing customers.
The investigation into Kindred covered the period between January 2019 and February 2022.
When reviewing the customer history, the SGA found that in 10 cases, the operator had either failed in meeting enhanced due diligence requirements, had not taken sufficient measures to assess the AML and CFT risk, or had not acted quickly enough to close the players’ accounts.
In response to the penalty, Kindred highlighted that since 2021, it had implemented several improvements to further strengthen its AML processes.
The operator said it had expanded its AML team to manage increased requirements related to appropriately identifying and managing customer risk, while also improving its AML procedures.
As a result, the number of risk-assessed customers and suspicious transaction reports sent to the financial police had increased.
Kindred stressed it fully shared the SGA’s ambition to prevent money laundering and terrorist financing.
However, the operator said it would welcome “increased clarity from the SGA” and guidance on objective and effective AML risk parameters that should be considered when assessing a customer’s risk profile.
Kindred is considering a potential appeal of the warning and sanction fee.
In a separate investigation, the SGA analysed ATG, or AB Trav och Galopp, between 1 January and 31 March 2020 and between 1 January and 31 March 2021.
The authority reviewed 13 customers, and found in eight cases where ATG had failed to sufficiently ascertain the identity of its customers and their source of funds.
ATG said it did not share the SGA’s opinion fully. The company said that that even if there were some shortcomings, which were the “result of the human factor,” it believed it still had sufficient measures in place to manage AML and CFT risks.
Nonetheless, ATG stressed that in 2022, it had introduced various systems to better control its customers of different risk categories.
The company also adopted a system that automatically sends KYC questionnaires to its medium-risk customers and carries out further investigations based on the customers’ answers.
The SGA’s investigation into PinBet, meanwhile, covered the period between June 2020 and January 2022.
The SGA reviewed the transaction history of 12 customers and identified shortcomings in 10 cases.
PinBet said it believed the SGA was correct, but emphasised it had taken several measures to improve its work in countering the financing of money laundering and terrorism, including improving its systems, policies and procedures, as well as training its staff.
In addition, PinBet said it had restructured its legal, regulatory and compliance functions and departments to further strengthen its regulatory framework internally.
Entain has been slapped with a £17m regulatory settlement for social responsibility and anti-money laundering failures, the largest ever penalty dished out by the UK Gambling Commission.
The failings were identified between December 2019 and October 2020 as part of an investigation into the operator’s digital and retail business.
The Gambling Commission (UKGC) first imposed a £14m fine for licensing failures at LC International Limited, which runs Entain’s 13 gaming websites across Great Britain, including ladbrokes.com, coral.co.uk and foxybingo.com.
Entain must also pay £3m for shortcomings at its Ladbrokes Betting & Gaming Limited operation, which operates more than 2,700 betting shops across the UK.
Moreover, the UKGC imposed additional licence conditions and ruled that Entain needs to appoint a board member to oversee its improvement plan. A third-party audit to review Entain’s compliance with licence conditions and codes of practice is now scheduled to take place within 12 months.
UKGC CEO Andrew Rhodes said: “Our investigation revealed serious failures that have resulted in the largest enforcement outcome to date.
“There were completely unacceptable anti-money laundering and safer gambling failures. Operators are reminded they must never place commercial considerations over compliance.”
Rhodes further noted that it was the second time that Entain has fallen foul of rules in place to make gambling safer and crime free. The company was formerly known as GVC, which received a £5.9m penalty in 2019, again for failings across the acquired Ladbrokes Coral business.
UKGC CEO Andrew Rhodes: “Our investigation revealed serious failures that have resulted in the largest enforcement outcome to date. There were completely unacceptable AML and safer gambling failures.”
“They should be aware that we will be monitoring them very carefully and further serious breaches will make the removal of their licence to operate a very real possibility. We expect better and consumers deserve better,” he added.
The long list of breaches include failing to intervene or intervene fast enough with customers at risk of gambling-related harm and allowing customers subject to account restrictions to open accounts with other licensed brands across the Entain portfolio.
One customer, who would spend extended periods gambling overnight and managed to deposit around £230,000 over an 18-month period, was only contacted once by the operator, according to the UKGC.
Another online customer, already blocked by Coral after failing to provide source of funds, was immediately able to open an account with Ladbrokes and deposit £30,000 in a single day.
Meanwhile, one retail customer customer was not escalated for a safer gambling review despite staking nearly £30,000 in a betting shop and losing £11,345 during a single month.
The UKGC also discovered that Entain failed to conduct proper risk assessments of the possibility of its businesses being used for money laundering or terrorist financing, and allowed one customer to deposit up to £742,000 over a 14-month period without appropriate source of funds checks.
UKGC CEO Andrew Rhodes: “They should be aware that we will be monitoring them very carefully and further serious breaches will make the removal of their licence to operate a very real possibility.”
Entain said it agreed to pay the penalty “in order to bring the matter to a close and avoid further costly and protracted legal proceedings”.
The operator accepted that certain legacy systems and processes supporting its British business during 2019 and 2020 had not been in line with the regulatory expectations of the UKGC in respect of social responsibility and AML safeguards.
However, Entain also highlighted that the UKGC had found no evidence of criminal spend within its operations and that the issues raised predate “the many changes in the area of safer gambling and AML that Entain has introduced”.
Entain said the £17m settlement, which will be directed towards other socially responsible purposes, was already provided for in the group’s financial statements.
The full ruling can be read here.
Smarkets has been struck with a £630,000 fine after an investigation by the UK Gambling Commission discovered a series of anti-money laundering and social responsibility failures.
London-based Smarkets accepted the six-figure sum for the failings, which saw customers allowed to gamble without adequate source of funds checks and failing to identify and interact with customers who were at risk of experiencing harm.
The operator has also received a formal warning and will undergo an audit to ensure it is effectively implementing its AML and social responsibility policies, procedures and controls.
Smarkets CEO Jason Trost: “We have worked cooperatively with the Commission throughout the process and taken significant measures to implement their recommendations, investing substantially in our compliance function.”
Examples of the failings by Smarkets include one customer being allowed to deposit £395,000 in a four-month period, without appropriate source of funds checks being carried out by the SBK operator.
Another example saw an individual transfer significant levels of funds between accounts without scrutiny or source of funds checks occurring.
“We fully accept the UKGC’s findings following investigation of some of our former procedures,” Smarkets CEO and founder Jason Trost said.
“We have worked cooperatively with the Commission throughout the process and taken significant measures to implement their recommendations, investing substantially in our compliance function.
“We take our responsibility to have appropriate compliance policies in place extremely seriously. We will continue to work closely with the UKGC and other relevant stakeholders, and will take proactive steps in order to ensure further improvement to our procedures on an ongoing basis,” he added.
UKGC deputy CEO Sarah Gardner: “This case was identified through compliance checks and once again highlights how we will take action against gambling operators who fail their customers.”
Upon handing down the fine, the UKGC highlighted that Smarkets cooperated with the Commission throughout the investigation and that the compliance assessment also found no evidence of criminal spend.
Sarah Gardner, deputy CEO of the UKGC, commented: “This case was identified through compliance checks and once again highlights how we will take action against gambling operators who fail their customers.
“Our investigation into Smarkets unearthed a variety of failures where customers were put at risk of gambling harm.
“It was obvious that poor systems and processes were in place which contributed to these breaches, driven by the company’s failure to effectively implement its policies and controls,” she added.
The £630,000 fine is the latest in a string of enforcement cases led by the regulator against UK licensees this year.
Earlier this month, online operator LeoVegas was hit with a fine of £1.32m for similar social responsibility and AML failings.