(Bloomberg) -- Shares in Entain Plc, the gambling company that owns Ladbrokes, fell the most in two months after an Australian regulator sued the group’s local subsidiary for allegedly breaking anti-money laundering rules.
A fine as a result of the federal court civil case could be “potentially material” and the company is carefully considering the Australian Transaction Reports and Analysis Centre’s filings, Entain said in a statement on Monday.
The Australian case is the latest regulatory issue the company has faced, after it agreed to pay UK prosecutors £615 million ($779 million) last year to resolve a probe into potential bribery offenses at its former Turkish business. Regulators globally are clamping down on online gambling companies, aiming to head off criminals who abuse the platforms and to protect customers from losing too much money.
The Australian anti-money laundering regulator announced a probe into whether the company had broken laws requiring it to identify and stop money laundering and terrorist financing on its platform in 2022. Entain has told the regulator it was updating its platform to protect against financial crime in a program set to be completed next year.
“We are committed to keeping financial crime out of gambling and continue to play our part in supporting a well-regulated and compliant sector for our customers, stakeholders and the wider community,” Chief Executive Officer Gavin Isaacs said in the statement.
Entain shares were down 5.7% to 768.80 pence at 9:39 a.m. in London, the biggest intraday decline since Oct. 14. The stock has declined 23% this year.
Entain appointed industry veteran Isaacs as chief executive officer in September after pressure from activist investors led to the resignation of its previous head a year ago.
The potential civil fine in Australia casts “a further shadow over the gambling operator during its turnaround,” Bloomberg Intelligence analysts Conroy Gaynor and Evgeniy Batchvarov said in a note.
The UK, where Entain is based, said last month that gambling operators will face a tax of as much as 1.1% of profits on some types of games as the government seeks £100 million a year to invest in harm reduction and research.
Entain previously had been asked to pay the UK Gambling Commission a settlement of £17 million in 2022 for failing to enforce player safety and anti-money-laundering measures.
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