Stop, start: The Australian regulator announced yesterday that an investigation into Entain Australian brands, Ladbrokes and Neds, has uncovered more than 500 breaches of the country’s national self-exclusion rules.

• The Australian Communications and Media Authority (ACMA) probe found that self-excluded customers were able to keep gambling, in one case for more than a year.
• In some instances, they were able to open brand new accounts after registering with BetStop, the national self-exclusion register.

Looming: The news of the self-exclusion failures comes at an awkward time for Entain in Australia, given the overhang of the financial regulator AUSTRAC’s federal court action over alleged AML and counterterrorism financing failures.

• In the wake of the AUSTRAC allegations, Entain Australia saw the departure of Dean Shannon as CEO.
• The case is scheduled for a potential trial later this year.

Window of opportunity: The numbers from ACMA’s investigation are striking. It was triggered by just seven consumer complaints and a sample review of 50 BetStop registrants, representing a tiny window into Entain’s customer base, but it nonetheless yielded 449 separate breaches relating to three accounts that were not closed “as soon as practicable.”

• Entain also provided wagering services to BetStop registrants on 59 distinct days and pumped out 23 promotional messages without the mandatory BetStop signposting.
• One customer who self-excluded in September 2023 went on betting through a linked account for more than 10 months because Entain’s matching systems had failed to connect the dots between the customer’s two accounts.
• Another who had registered on BetStop in August 2023 successfully opened two further accounts in May 2024, immediately after Entain’s own systems had confirmed the registration

Poor hygiene: ACMA member Carolyn Lidgerwood pointed to deficiencies in identity matching and onboarding controls, with variations in customer names and email addresses slipping through Entain’s verification net.

• “When people register for self-exclusion there should be no way for them to open new accounts for licensed wagering services in Australia,” Lidgerwood said.

The fix Entain has rolled out – a single customer view consolidating accounts across brands and hourly ‘account washing’ against the BetStop register – is the sort of basic data hygiene that ought to have been in place from the moment BetStop went live in August 2023.

• Yet, despite the volume of contraventions, ACMA has not issued an infringement notice and Entain will not pay a financial penalty.

#awks: Instead, the company has signed an 18-month court-enforceable undertaking committing it to an independent review of its compliance systems and to implementing whatever recommendations follow.

• The ACMA’s hands were, on its own account, tied: the enforcement option of an infringement notice was “not available in these circumstances.”
• It is a procedural quirk that will almost certainly attract attention as Australia’s statutory review of BetStop progresses.
• The contrast with Tabcorp, fined just A$158,400 (~$115k) earlier this year for comparable failings, is awkward.
• Entain’s volume of breaches is an order of magnitude larger, yet its checkbook remains untouched, at least for now.
• Failure to honor the undertaking can land it in court for financial penalties down the line.

A living endorsement: The problems in Australia are embarrassing for a company that has only just emerged from serious regulatory and compliance entanglements in the UK, including a record HMRC fine and a multimillion regulatory settlement with the UK Gambling Commission.

• In 2022, the Commission imposed a £17m regulatory settlement – at the time the largest such outcome in British gambling history – for AML and social responsibility failings both online and in its retail estate.
• The Commission’s then CEO Andrew Rhodes pointedly noted it was the second time the operator had fallen foul of the rules, and warned that further breaches would put the license itself in jeopardy.

A year later, in November 2023, the group reached a £615m deferred prosecution agreement with the Crown Prosecution Service, following an HMRC investigation, over Section 7 Bribery Act failings at its legacy Turkish-facing business.

• This was the second-largest corporate criminal settlement in UK history.

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