Updated ,first published
Tabcorp investors have lost more than $500 million on its shares after the company revealed it is being investigated by Australia’s anti-money laundering agency, as the betting company’s boss Gillon McLachlan vowed to work constructively with the regulator.
On Thursday morning, Tabcorp told the ASX it had received a letter from AUSTRAC advising it had launched an investigation into the company’s compliance with anti-money laundering and counterterrorism financial obligations.
The market responded swiftly to the news, with the wagering giant’s share price plummeting more than 25 per cent soon after the ASX opened on Thursday. More than $500 million was wiped off its market value within hours of the announcement. The company had a market capitalisation of $2.63 billion on Wednesday night.
Tabcorp’s managing director and chief executive officer McLachlan, who previously ran the AFL, said that he was “committed to leading a compliant and safe company that understands its risk obligations”.
“Uplifting our risk capability has been an ongoing part of the Company’s transformation and we will work constructively with AUSTRAC through this process,” McLachlan said.
A spokeswoman for AUSTRAC said the regulator “can confirm that it has commenced an investigation into Tabcorp’s compliance with its obligations under the AML/CTF (anti-money laundering counter-terrorism financing) Act”.
“AUSTRAC will not comment in relation to the matter whilst the investigation is ongoing,” the spokeswoman said.
Tabcorp could face a significant penalty if the investigation proceeds to legal action. Previous money laundering cases investigated by AUSTRAC have led to some of Australia’s largest financial institutions and gambling players being fined hundreds of millions of dollars.
This includes Westpac paying $1.3 billion in 2020 over breaches related to transactions linked to overseas child exploitation, and Commonwealth Bank paying $700 million over failures that allowed drug-related transactions to occur. In 2023, Casino giant Crown agreed to pay a $450 million penalty over anti-money laundering failures.
Tabcorp’s announcement said AUSTRAC had advised that its investigation was at an early stage and its “approach will be determined once sufficient evidence has been collected and assessed”.
“AUSTRAC has also advised that all potential outcomes remain open, including the possibility that no further enforcement action will be taken,” Tabcorp’s statement said.
Tabcorp chairman Brett Chenoweth said the board and the company’s executives were fully committed to collaborating with AUSTRAC.
“Tabcorp takes its anti-money laundering and counter-terrorism financing obligations very seriously,” Chenoweth said.
Betting companies are closely scrutinised by the national financial intelligence regulator due to the risks of money laundering through their platforms.
The investigation is not the first time Tabcorp has run afoul of AUSTRAC. In 2017, Tabcorp was fined $45 million over breaches of the anti-money laundering and counter-terrorism financing act between July 2010 and December 2015.
The case included claims that Tabcorp failed to inform AUSTRAC of suspicious illegal betting activity and suspected examples of credit card fraud.
McLachlan took the reins at Tabcorp in 2024, and had overseen a strong rise in the company’s share price. Shareholders appeared to put their faith in his outlook for the wagering titan, having already approved remuneration packages and stock options expected to exceed more than $17 million during his short tenure.
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Elias Visontay is a National Consumer Affairs Reporter at The Sydney Morning Herald and The Age.Connect via email.
