Australian racing and wagering giant Tabcorp revealed Friday it has been informed by AML regulator AUSTRAC that it has commenced an enforcement investigation due to serious concerns around Tabcorp’s ability to effectively identify, mitigate and manage its money laundering and terrorism financing (ML/TF) risks.
According to an ASX filing, the investigation will initially focus on evaluating Tabcorp’s compliance with its obligations under Australia’s AML/CTF Act in relation to having a compliant AML/CTF Program, complying with that AML/CTF Program and appropriately monitoring customers.
Tabcorp also said AUSTRAC has advised that its investigation is at an early stage and its approach will be determined once sufficient evidence has been collected and assessed. All potential outcomes remain open, including the possibility that no further enforcement action will be taken, the company added.
“Tabcorp takes its anti-money laundering and counter-terrorism financing obligations very seriously,” said Tabcorp Chairman, Brett Chenoweth. “The Board and Executive are fully committed to collaborating with AUSTRAC in the continuing uplift in Tabcorp’s ML/TF risk maturity.”
Tabcorp Managing Director and CEO, Gillon McLachlan, added, “I am committed to leading a compliant and safe company that understands its risk obligations. Uplifting our risk capability has been an ongoing part of the Company’s transformation and we will work constructively with AUSTRAC through this process.”
In a subsequent note issued hours after Tabcorp’s announcement, ratings agency Fitch said the early-stage enforcement investigation is not expected to have an immediate effect on the company’s rating.
However, it warned that AUSTRAC’s action, alongside the civil penalty proceedings recently commenced against Entain plc – operator of Ladbrokes and – are likely to raise compliance costs, increase operational demands and heighten conduct and governance risks for operators across the gaming and wagering sector.
“AUSTRAC may take no further action, but any enforcement against Tabcorp could result in civil penalties, legal costs, remediation expenses or other measures that would affect the company’s financial profile,” Fitch explained.
“Such an outcome could also indicate governance deficiencies that would become rating relevant. Still, Tabcorp’s financial profile is currently strong for the rating, which provides the capacity to absorb moderate additional costs, if required.”
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