Australian wagering and gaming operator Tabcorp Holdings is under investigation by financial crimes regulator Australian Transaction Reports and Analysis Centre over concerns tied to anti-money laundering and counter-terrorism financing compliance.

The company disclosed that AUSTRAC had informed it of “serious concerns” regarding Tabcorp’s ability to identify, mitigate and manage money laundering and terrorism financing risks. According to statements released through the Australian Securities Exchange, the investigation will initially examine whether the company maintained a compliant AML/CTF program, followed that program appropriately and properly monitored customer activity.

The announcement triggered a major selloff in Tabcorp shares, according to Reuters. The company’s stock fell more than 28% during Thursday trading, reaching a 10-week low of A$0.825. The decline erased more than A$700 million in market value.

Tabcorp occupies a significant position within Australia’s wagering sector, which is estimated at A$30 billion. The company operates across roughly 4,000 pubs, clubs and TAB venues nationwide.

AUSTRAC confirmed that the enforcement investigation had begun but said it would not provide additional comment while the matter remains ongoing.

Tabcorp stated that the investigation remains at an early stage and noted that all outcomes remain possible, including the chance that regulators may decide against further enforcement action once evidence is assessed.

Company Leadership Responds to Compliance Concerns

Tabcorp executives said the company intends to cooperate fully with regulators during the investigation process.

“Tabcorp takes its anti-money laundering and counter-terrorism financing obligations very seriously,” said Tabcorp Chairman, Brett Chenoweth. “The Board and Executive are fully committed to collaborating with AUSTRAC in the continuing uplift in Tabcorp’s ML/TF risk maturity.”

Chief Executive Officer Gillon McLachlan said the company has already been working to strengthen its internal compliance systems as part of broader operational changes underway at Tabcorp.

“I am 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.”

In separate remarks, McLachlan described improving risk management capabilities as part of the company’s continuing transformation efforts.

The investigation marks another chapter in the relationship between Tabcorp and AUSTRAC. In 2015, the regulator initiated civil proceedings against the wagering operator over money laundering compliance failures. Two years later, Tabcorp agreed to pay A$45 million to settle the matter.

The latest investigation adds pressure to Australia’s gaming and wagering industry, which has faced increasing regulatory scrutiny tied to anti-money laundering obligations and customer monitoring standards.

Fitch Says Investigation May Raise Industry Costs

Ratings agency Fitch Ratings said the current investigation is not expected to immediately affect Tabcorp’s BBB- credit rating or its stable outlook. Still, the agency warned that any enforcement action could eventually create financial and governance pressures for the company.

Fitch stated that possible penalties, remediation expenses and legal costs linked to the AUSTRAC investigation could affect Tabcorp’s financial profile if regulators pursue enforcement measures.

“AUSTRAC may take no further action, but any enforcement against Tabcorp could result in civil penalties, legal costs, remediation expenses or other measures that would affect the company’s financial profile,” Fitch explained.

The agency also noted that governance issues identified during the investigation could become relevant to future ratings decisions. At the same time, Fitch said Tabcorp’s financial position currently provides enough flexibility to absorb moderate additional costs if necessary.

Fitch linked the Tabcorp case to wider regulatory attention directed at Australian betting and casino operators. The agency referenced AUSTRAC’s recent civil penalty proceedings against Entain plc, which operates the Ladbrokes and Neds brands in Australia.

The ratings agency also pointed to ongoing matters involving Sportsbet and entities connected to Star Entertainment Group.

According to Fitch, the recent enforcement activity is likely to increase compliance demands and operational costs across the gaming sector while placing greater attention on governance standards.