An Australian Federal Court handed down a record fine for Tabcorp for its laxity in complying with anti-money laundering and counter-terrorism financing obligations. Under Australian laws, a gaming company like Tabcorp is required to comply with the Anti-Money Laundering and Counter-Terrorism Financing Act.

Instead, the New South Wales company and financial regulator AUSTRAC found that Tabcorp failed to comply with the law 108 times over a 5-year period. For failing to comply, the Federal Court levied a $45 million fine in Australian dollars, which amounts to about $35 million in U.S. dollars.

AUSTRAC CEO: “A Serious Failure”

Paulo Jevtovic, the CEO of AUSTRAC, told reporters from Australian news outlet ABC News, “This was a serious failure in the corporate governance and the size of the penalty reflects a significant and extensive noncompliance. In my view, the noncompliance arises from a corporate culture that is indifferent to money laundering and terrorism financing requirements.

Mr. Jevtovic told reporters that he believed Tabcorp had made the necessary changes to comply with the law moving forward. The Federal Court case was a key factor in the 28% decline in Tabcorp Holdings’ profits for the first half of the year, as Tabcorp reportedly has spent AU$20 million on legal costs. The announced Q1 revenue figures so for February 2017 was $59 million.

David Attenborough Statement

Tabcorp CEO David Attenborough released a statement to the public on his company’s compliance efforts. Mr. Attenborough said, “We have made significant investment in enhancing our…compliance over the past three years and remain focused on being the industry leader in regulatory compliance across all or our operations.

Efforts to effect a Tabcorp-Tatts merger have proven costly for both companies. Tabcorp has spent AU$9.1 million on legal costs for the proposed merger. TAB also spent $128 million on its acquistion of INTECQ, a deal which incurred another $4.1 million in transaction costs. Tabcorp also spent $17.9 million on SunBet, its foray into the United Kingdom’s gaming market. Sunbet is a joint venture with Rupert Murdoch.

David Attenborough claimed that the Melbourne racing season has had a nice launch, which was expected. The first part of the year is the best for Tabcorp’s racing numbers, because of the startup of the racing season.

The company CEO said, “Wagering and media continued to respond to the highly competitive environment and TAB had a record-breaking Spring Racing Carnival.

ACCC Monitoring TAB-TATTS Merger

Because the Australian Competition and Consumer Commission (ACCC) announced in early March that the Tabcorp-Tatts merger would lead to substantially less competition in the Queensland market, Tabcorp announced recently it was looking into the sale of the Odyssey Gaming Services unit, which is active in the Queensland market. It is worth it to Tabcorp to sell Odyssey to a competitor, if it clears the way for the merger.

ACCC Chairman Rod Sims told ABC that his agency’s concerns were not so much with the broader wagering markets, but with the industry’s sub-markets (clubs and pubs). Sims said in his interview, “We’re comfortable that gamblers have enough opportunities to choose between totaliser agency betting and fixed-odds bettering.

Selling Odyssey Unit in Queensland

In a statement to the public about Odyssey, Tabcorp said of its compliance efforts, “Since it lodged its formal clearance application with the ACCC in November, Tabcorp has worked closely with the ACCC to assist it with its inquiries.

It’s more about issues to do with gaming services to clubs, issues with providing pooling arrangements, particularly in WA and to do with the link between TAB and Sky Racing.

The ACCC’s director said that six or seven obstacles still remain for the merger. Sims said that Western Australia needs access to more gamblrs, or else the region cannot have sensible odds.

Sky Racing Broadcasting Expansion

Another concern was the relationship between the racing media broadcaster, Sky Racing, and Tabcorp. The merger would result in a combination of Sky Racing — the dominant broadcaster and a Tabcorp subsidiary — with Tatt’s retail wagering operations in Queensland, South Australia, The Northern Territory, and Tasmania.

In discussing his concerns, Mr. Sims said he was being mindful of the relationship Tabcorp and Sky Racing has with clubs in Victoria and New South Wales. If the broadcaster is too powerful, it affects their negotiations with club owners.

The head of the ACCC said, “At the moment in NSW and Victoria, you have the TAB which owns Sky Racing and that gives them a lot of market power when they’re dealing with the clubs.”

There are other concerns. For instance, Rod Sims wants to assure that Tabcorp’s access to TATTS statistics as a monopoly monitor of machines would not be used to gain an unfair advantage for TAB as a service provider.

About the Author
April Bergman avatar
April Bergman

April Bergman was a longtime news blogger for BOC. She wrote gaming news posts from January 2013 until September 2018. April also wrote slot reviews, strategy articles, and online casino reviews for the site.

April Bergman began in the online gaming industry in August 2010. From 2010 to 2013, she managed evergreen content for several top online casino. Her duties included developing and maintaining multiple websites in the gaming space. When not writing about online gambling, April loves horse racing, travel, photography, and gardening. She's began in the business as a devoted poker players and spent several years as a card game editor on the now-defunct DMOZ. These days, she lives with her husband and two children in the Toronto metropolitan area.

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April Bergman was a longtime news blogger for BOC. She wrote gaming news posts from January 2013 until September 2018. April also wrote slot reviews, strategy articles, and online casino reviews for the site.

April Bergman began in the online gaming industry in August 2010. From 2010 to 2013, she managed evergreen content for several top online casino. Her duties included developing and maintaining multiple websites in the gaming space. When not writing about online gambling, April loves horse racing, travel, photography, and gardening. She's began in the business as a devoted poker players and spent several years as a card game editor on the now-defunct DMOZ. These days, she lives with her husband and two children in the Toronto metropolitan area.

READ MORE
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