Australia’s Largest Gambling Company Loses $600M After Money Laundering Investigation

The most recent investigation was launched after speculation emerged that Tabcorp failed to properly monitor and manage risks related to money laundering and criminal activity. AUSTRAC confirmed that it is investigating the company’s compliance with AML obligations under Australia’s anti-money laundering laws.

The investigation is still in its early phases, so there’s no evidence of any wrongdoing yet, but AUSTRAC has released a statement stating that all possible outcomes remain open while evidence continues to be gathered and assessed.

A spokesperson for AUSTRAC said the agency would not provide further comment while the investigation remains ongoing.

The exact details behind the allegations have not yet been publicly released. However, media outlets have reported that the investigation is focused on whether the company had sufficient systems in place to identify suspicious activity and prevent illegal financial behaviour through its gambling operations.

Tabcorp’s key management figures have since responded by saying that the company is cooperating with the investigation.

Chairman Brett Chenoweth said the business takes its anti-money-laundering responsibilities “very seriously” and confirmed that the board is working with AUSTRAC throughout the process.

Chief executive Gillon McLachlan also confirmed the investigation, saying the company remains committed to maintaining a “compliant and safe company that understands its risk obligations”.

He added that improving risk management systems has already been part of Tabcorp’s broader transformation efforts. However, despite those statements, the market reaction showed that investors are very concerned about the potential financial and reputational damage the investigation could bring to Tabcorp, and the  ASX: TAH stock has dropped over 35% in the last few days.

This is not the first time Tabcorp has been under the watchful eye of the Australian Transaction Reports and Analysis Centre.

Back in 2017, the company paid an A$45 million settlement to AUSTRAC after the regulator found serious compliance failures linked to anti-money-laundering systems.

At the time, more than 30 betting accounts had reportedly been opened under false names and used fraudulent credit cards to move money connected to criminal activity. AUSTRAC claimed that Tabcorp had failed to implement proper risk management procedures between 2010 and 2015.

That previous case is one reason why the latest investigation is attracting so much attention. However, no penalties have been announced in the most recent AUSTRAC investigation, although the risks to Tabcorp remain significant. If found guilty of major breaches, they could face heavy financial penalties, following the example of several major Australian banks that were recently hit with enormous AUSTRAC penalties.