Tabcorp has been fined a record $45 million for failing to comply with anti-money laundering and counter-terrorism financing obligations.
Last Thursday, the Federal Court agreed to a settlement finalised between Tabcorp and Australia’s financial intelligence agency, Austrac, which included a $45 million fine – the highest ever civil penalty in corporate Australia. Austrac was also awarded costs, which takes Tabcorp’s financial hit for its failings to more than $90m.
The court determined that Tabcorp had contravened the anti-money laundering and counter-terrorism financing act on 108 occasions.
The wagering giant admitted to breaches that related to unlawful activity, including money laundering and credit card fraud. Tabcorp also admitted it failed to identify a customer who collected $100,000 in winnings.
Austrac chief executive Paul Jevtovic said the identity of that customer remained unknown.
Mr Jevtovic said Tabcorp had a corporate culture indifferent to meaningful AML/CTF compliance and risk mitigation until the agency intervened.
“Cultures such as this put not only the organisation at risk but the community by creating opportunities for organising crime groups, serious criminals and others to divert their criminal wealth to the black market and fund other illegal activities such as drug trafficking.”
Tabcorp chief executive David Attenborough said Tabcorp had made a significant investment in enhancing its AML/CTF compliance over the last three years.
He added that the company remained firmly committed to continuing to work co-operatively with AUSTRAC into the future.
Tabcorp said it is maintaining its dividend targets this year despite the penalty. The wagering firm said the penalty will be recognised as an expense in its financial statements for the year to the end of June.
Tabcorp takes Tatts Group merger case straight to Competition Tribunal
In further Tabcorp news, the company has taken the unusual step of withdrawing from the competition watchdog’s “informal” process to clear its proposed $11 billion merger with Tatts Group and has instead taken its case straight to the Australian Competition Tribunal.
The move comes after the Australian Competition and Consumer Commission gave the deal a qualified green light and shows how important Tatts is to Tabcorp and how keen it is to clinch the deal.
While it is not unusual to see a company that has had a deal rejected by the ACCC take its case to the Tribunal, Tabcorp appears to have made a pre-emptive strike before the watchdog has even made a final decision.
While the watchdog has forced Tabcorp to sell its Odyssey Gaming Services business to allay concerns about competition levels in the gaming monitoring sector – and Tabcorp said last week that this sale process was “well advanced” – the gaming company will abandon talks with the competition watchdog completely.
Instead, it will apply to the Australian Competition Tribunal for authorisation to proceed with the deal. Tabcorp believes that the Tribunal process will allow it to better “ventilate” the support it has received for the Tatts merger, particularly from the racing industry, which has been promised more funding as the result of the deal.
In comparison, the ACCC deal is seen as being “limited to assessing whether a proposed acquisition is likely to substantially lessen competition, and is not able to take into account countervailing public benefits”.
Tabcorp also expects the deal will get cleared faster under the Tribunal process, with a decision on authorisation expected by June 13. The ACCC has said it will make a final decision by May 4, but there are concerns the watchdog could extend that deadline to further investigate some parts of the deal.