(Newswire.net — March 22, 2024) — The Australian betting market is experiencing significant year-on-year growth and a strict regulatory framework is in place to protect customers and mitigate the risk of criminal activity.
Austrac (Australian Transaction Reports and Analysis Centre) is the country’s financial regulator in charge of counter-terrorism financing and money laundering laws and has been active in the financial and gambling industries in recent years.
They have recently announced an investigation into Bet365’s Australian operations, citing betting operators’ responsibility to ensure their systems comply with regulations.
Betting in Australia
The betting industry in Australia is an extremely popular pastime, with almost three-quarters of Australians gambling at least once every year. Online casino operators are prohibited from operating under the IGA ( Interactive Gambling Act of 2001), but citizens can make use of offshore betting facilities.
Other Australian betting regulations are determined by independent jurisdictions, including; New South Wales, the Northern Territory, Queensland, South Australia, Victoria, and the Australian Capital Territory.
IGaming expert Wendy Prinsloo compared new casino sites to determine the safest and most secure option for consumers to use. She explains that licensed offshore sites that use reputable software and security systems and welcome independent auditors help to provide peace of mind to Australian bettors.
Some of the world’s biggest betting operators offer services in Australia, as well as a selection of smaller independents. Taking the time to find a secure betting operator will not only minimize the risk of data theft but will also ensure the games and markets offered are fair.
Consumers will typically be offered signup bonuses as an incentive for signing up, so there are many considerations for bettors when finding an online operator.
Austrac’s regulations to prevent financial crime ensure operators take accountability for their customers in the jurisdictions where they operate.
Multi-million dollar fines against banking institutions in the past and the decision to clamp down on betting operators comes as bad news to Bet365 who will be investigated regarding their conduct and compliance.
Who is Bet365?
Bet365 is a relatively new betting operator having been founded in 2000 in Stoke, England. The online gambling company offers a variety of betting markets to customers including sports betting, online casinos, online bingo, and more.
Bet365 employs approximately 7,000 people, with offices in the UK, Australia, America, Canada, Malta, Gibraltar, Bulgaria, and Colombia.
Despite being recognized as one of the world’s biggest online betting operators, Bet365 has had legal issues in Australia in the past.
The Australian Competition & Consumer Commission fined the betting operator $2.75 million in 2016 following a misleading advertisement campaign that falsely offered the chance for customers to get free bets. The latest investigation will be a setback, but at present, only an investigation has been called with no discussion of potential fines yet.
Bet365 Anti-Money Laundering Compliance Allegations
Australia’s attempts to hamper potential money laundering operations have seen their regulatory board crackdown on AML compliance breaches, issuing Westpac Bank with a $1.3bn fine.
This fine should serve as a warning to other financial institutions and betting operators and ensure they have the correct procedures in place. The latest move should not come as a shock to Bet365 whose Hillside operation was under scrutiny in 2022.
Australia New Media was ordered by Austrac to conduct an audit in 2022. The cost of appointing external auditors was to be covered by the operators themselves, with the move being seen as an industry warning.
If Bet365 is fined, they can expect it to be another eye-watering sum in line with revenue. The company was able to pay CEO Denis Coates a package of almost £300 million in 2023, so Austrac will look to make an example of any breaches found to have taken place.
This will not be the only case against betting operators with Sportsbet and Ladbrokes parent company Entain also being investigated in 2022. Entain had recently been fined $29 million by the UK Gambling Commission for similar compliance breaches.
Fears that guilty parties could be subject to civil proceedings and the potential of fines worth tens of millions of dollars could be bad news for Australia’s online gambling industry.
Low margins and the threat of regulatory action could prove too much for some operators who could pull out. A potential ban on betting advertisements and credit card deposits will also have bookmakers exploring their options.
Rising taxes and increasing competition have seen some changes take place already with BlueBet and BetR in talks over a merger and PointsBet putting its Australian operations up for sale.
The three bookmakers could face a maximum fine of $22.2 million per single breach under the Anti-Money Laundering and Counter-Terrorism Financing Act. Multiple breaches could be disastrous.
As well as the looming threat of compliance breach fines, the bookmakers will also have to invest heavily in their infrastructure to improve their compliance programs.
Conclusion
The Australian gambling industry could be set for significant changes when Austrac releases its findings on its investigations. Multi-million dollar fines and the requirement to upgrade compliance programs would have put a strain on business operations anyway, add to that other potential issues on the horizon, and online betting in Australia could see some major players walking away.
While Australian authorities are keen to safeguard the integrity of their financial system, the loss of major betting operators could see a vacuum filled by less scrupulous operators that are more difficult to manage and regulate under the Interactive Gambling Act 2001.
Australian bettors will be hopeful that a suitable agreement can take place that improves betting operator compliance, without driving them out of the country.