In a statement on Thursday, AUSTRAC said it was launching an “enforcement investigation” into Hillside Pty Limited, which trades as Bet365, to determine whether it had fulfilled its obligations under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 following a previous order for the company to appoint external auditors.

Discussing the investigation, AUSTRAC CEO Brendan Thomas maintained betting companies had a significant role to play in combatting financial crime, warning those without adequate safeguards were “vulnerable to exploitation.”

“Corporate bookmakers must have robust systems in place to ensure they can manage and mitigate risks associated with money laundering and terrorism financing,” he said.

“Businesses without adequate processes in place to manage those risks leave themselves vulnerable to exploitation by criminals.”

Mr Thomas declined to offer insights into why the watchdog had launched the investigation, or what its focus was.

In November 2022, AUSTRAC ordered Bet365 and another gambling company, Sportsbet, to appoint external auditors in order to assess their compliance with Anti-Money Laundering and Counter-Terrorism Financing Act.

A statement announcing the order said the decision followed an “extensive supervisory campaign” that had assessed a number of businesses in the sector that also resulted in an investigation into Entain.

AUSTRAC instructed the auditors to examine whether both companies had adopted and maintained systems to “effectively identify, mitigate and manage” money laundering and terror financing risks, as well as evaluate their risk assessment procedures, senior management oversight and monitoring of customers.

They were given 180 days to compile a report and hand it to the watchdog, with AUSTRAC then taking time to consider the findings before announcing further action.

In their statement on Thursday, the watchdog said they “would not hesitate” to take action against companies suspected of non-compliance, with AUSTRAC in possession of a range of regulatory tools and enforcement powers to punish those found to have committed breaches.

Bet365 is one of the largest operators in Australia and a major player worldwide.

Founded in 2000, the company employs about 7,000 globally and claims to serve more than 90 million customers.

In Australia, the company is licenced and regulated by the Northern Territory government, but it has also had run-ins with other regulators.

The company was fined $2.75 million by the Australian Competition & Consumer Commission in 2016 for running ads which offered “free bets” to new customers despite considerable restrictions on the deal.

To become eligible for the offer of a “free” $200 bet, customers had to first deposit and gamble $200 of their own money, while no winnings could be withdrawn until a customer had gambled their deposit and bonus three times.