Australia’s largest wagering and gaming operator, Tabcorp, has come under fresh regulatory pressure after the country’s financial crime watchdog launched an investigation into the company’s anti-money laundering and counter-terrorism financing controls. The development triggered a sharp sell-off in Tabcorp shares on Thursday, wiping more than A$700 million (US$462 million) from the company’s market value.
Shares in the ASX-listed bookmaker fell more than 28 per cent during intraday trading to A$0.825 (US$0.54), marking the company’s steepest one-day decline on record. The drop pushed the stock to its lowest level in about 10 weeks as investors reacted to the regulatory concerns.
AUSTRAC flags “serious concerns”
Australia’s financial intelligence agency, Australian Transaction Reports and Analysis Centre (AUSTRAC), said it had identified “serious concerns” regarding Tabcorp’s ability to detect, manage and reduce money laundering and terrorism financing risks.
According to Tabcorp, the investigation will initially focus on whether the company has an effective anti-money laundering and counter-terrorism financing programme in place. Regulators will also examine whether the business is complying with those procedures and properly monitoring customer activity.
The company stated that the enforcement process remains in its early stages and that no conclusions have been reached. Tabcorp added that several outcomes remain possible, including the possibility that no further enforcement action may be taken.
Tabcorp under pressure
Tabcorp holds a major position in Australia’s A$30 billion (US$19.8 billion) wagering industry. The company operates betting services across around 4,000 pubs, clubs and TAB outlets nationwide, giving it one of the country’s widest gambling networks.
The investigation has raised concerns among investors because compliance failures linked to anti-money laundering rules can result in heavy penalties and increased regulatory oversight.
Chief executive Gillon McLachlan said strengthening the company’s risk and compliance systems has already been part of Tabcorp’s broader transformation programme.
He said the company would continue to cooperate fully with AUSTRAC during the investigation process.
Tabcorp chairman Brett Chenoweth also said the board and management team remain committed to working closely with regulators to improve the company’s money laundering and terrorism financing risk framework.
Watchdog declines further comment
AUSTRAC confirmed the investigation but said it would not provide additional details while the matter remains ongoing.
The regulator has increased scrutiny of gambling companies, casinos and financial institutions in recent years as part of wider efforts to strengthen Australia’s financial crime controls.
Several major gambling operators and casinos have faced investigations and penalties linked to anti-money laundering compliance failures over the past decade.
Previous legal action against Tabcorp
This is not the first time Tabcorp has faced action from AUSTRAC.
In July 2015, the watchdog launched civil proceedings against the bookmaker over alleged breaches of anti-money laundering laws. The matter was later resolved in 2017 when Tabcorp agreed to pay A$45 million (US$29.7 million) to settle the case.
The latest probe has revived investor concerns about compliance risks at the company, particularly at a time when regulators across Australia are tightening oversight of the gambling sector.
Reuters reported that Tabcorp’s largest shareholders, including AustralianSuper, Australian Retirement Trust and Aware Super, did not immediately respond to requests for comment following the announcement.
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