Money laundering is a very serious offense in Australia. When an Australia gambling firm fails to comply with anti-money laundering laws, the penalty can be of near equal severity. Tabcorp found that out the hard when AUSTRAC charged the company with more than 100 counts of failing to comply with those regulations.
Bases in Sydney, Tabcorp is one of the largest Australia wagering firms, responsible for billions of dollars worth of betting activities each year. As such, it’s an easy target for criminals looking for a means to launder money.
Over the last five years, Australia’s regulator, AUSTRAC, said it uncovered 108 incidents where Tabcorp violated the nation’s Anti-Money Laundering and Counter-Terrorism Financing Act.
Due to insufficient measures to detect and prevent such criminal activities, AUSTRAC said the company failed to report – in a timely manner, or at all – 105 suspicious activities relating to credit card fraud and/or money laundering.
Tabcorp and AUSTRAC reached a settlement agreement in which the Australia gambling firm agreed to pay a $45 million fine for failure to comply with those laws. This week, a Federal Court examined and approved the $45 million settlement.
Paulo Jevtovic, Chief Executive Officer for AUSTRAC, told the press, “This was a serious failure in the corporate governance and the size of the penalty reflects a significant and extensive noncompliance.”
He went on to blame the gambling industry as a whole for the lack of appropriate measures to detect, prevent and report activities that should immediately raise a red flag for criminal intent.
“In my view,” Jevtovic conjectured, “the noncompliance arises from a corporate culture that is indifferent to money laundering and terrorism financing requirements.”
He did admit that Tabcord has taken some steps to enhance its anti-money laundering prevention techniques. It obviously wasn’t enough, though, having resulted in an enormous fine that not only sets a new record for noncompliance penalties against any Australia wagering firm, it dug deep into Tabcorp’s bi-annual profits.
The company’s suffered a 28% cut into its profits due to the legal action against it, down to $59 million compared to last month’s report.
David Attenborough, Chief Executive of Tabcorp, released a statement to the Australia Securities Exchange (ASE), ensuring the regulator that the Australia gambling company is wholly committed to cooperating with AUSTRAC from this point on, and promising to continue fortifying its measures to thwart money laundering activities.
“We have made significant investment in enhancing our … compliance over the past three years and remain focused on being the industry leader in regulatory compliance across all or our operations,” said the Tabcorp CEO.
After posting its IPO in 1994, Tabcorp Holdings LTD has grown to become one of the largest publicly listed gaming firms in the world. The Australia wagering company has registered more than 1.2 million regular customer accounts. Its NSW and Victoria totalisator pools are the two largest in the country.
Tabcorp provides on-course betting at 250+ race tracks, runs a phone, TV and online betting service with over 300,000 customers, and operates the Luxbet online bookmaker in the Northern Territory. The company is also responsible for tens of thousands of poker machines in pubs, clubs and hotels across NSW, Queensland and Victoria.