Entain, the British online gambling giant and Ladbrokes parent company, saw its shares drop nearly 7% following AUSTRAC's lawsuit over alleged anti-money laundering violations in Australia. The financial intelligence agency claims Entain accepted AU$152 million (US$96 million) in bets from 17 customers with suspected criminal connections.

AUSTRAC alleges Entain knowingly continued business relationships with high-risk customers despite being aware of money laundering and terrorism financing risks. This marks AUSTRAC's first civil action against an online betting operator, following their AU$450 million fine against Crown Resorts last year.

Entain acknowledged the severity of the situation in a London Stock Exchange notice, stating the penalty could be "potentially material." The company claims to have fully cooperated with AUSTRAC and implemented enhanced AML protocols.

This isn't Entain's first regulatory challenge. In recent years, the company faced:

• £585 million fine from UK tax authorities over Turkish bribery allegations (2023)
• £17 million penalty from UK Gambling Commission for compliance failures (2022)

Investment director Russ Mould of AJ Bell warns these proceedings could impact both Entain's balance sheet and reputation, with federal court proceedings likely to extend over a significant period.

Entain chairman Gavin Isaacs responded by emphasizing the company's commitment to preventing financial crime and supporting a well-regulated gambling sector.

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