Flutter's Sportsbet Sued in Australia over Stolen Funds
Flutter Entertainment's Australian brand, Sportsbet, faces legal action after being accused of accepting deposits made with stolen funds.
LISTEN TO THIS ARTICLE:The lawsuit has been filed by Victorian resident Kym Cavigan, who claims Sportsbet failed to detect and prevent deposits made by her accountant, Andrew Marshall, using money stolen from his clients. Marshall, who has since pleaded guilty to multiple charges, embezzled approximately $280,000 from Cavigan's accounts. The stolen funds were then used to gamble through the online betting platform operated by Sportsbet.
Related: Gambliner Sues BetEasy and Sportsbet After AU600K LossCavigan's claim argues that Sportsbet had an obligation to ensure proper checks were in place to prevent the use of misappropriated money. The case is drawing attention to questions about due diligence and compliance obligations in the Australian gaming sector, particularly in relation to know-your-customer (KYC) and anti-money laundering (AML) practices.
While Marshall's actions were not classified as money laundering, the circumstances have reignited scrutiny over how operators verify the source of customer funds and respond to suspicious transactions.
The matter also comes at a sensitive time for the Australian betting industry, which has been under mounting political and regulatory pressure to improve compliance standards. Earlier this year, rival operator Entain—owner of Ladbrokes Australia and Neds—became the subject of an investigation over potential breaches of AML obligations. That case underscored the regulatory risks facing the country's largest betting companies as lawmakers push for tougher oversight and accountability measures.
The timing of the lawsuit coincides with renewed political focus on gambling reform in Australia. It has been two years since the release of the Murphy Report, a comprehensive parliamentary inquiry into the social effects of gambling led by the late MP Peta Murphy. The inquiry proposed 31 recommendations, including restrictions on advertising, enhanced consumer protection initiatives, and the creation of a national gambling regulator. Despite widespread support, progress on implementing those recommendations has stalled, prompting growing frustration among legislators.
Several MPs, including Andrew Wilke and Kate Chaney, have criticized the government's lack of movement on reform. Wilke described Australia's gambling regulation as a national disgrace and accused the government of ignoring expert evidence and community sentiment.
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Lawmakers have also directed criticism at the Northern Territory Racing and Wagering Commission (NTRWC), which licenses many major online bookmakers. Critics claim the regulator's small staffing and close industry ties prevent it from exercising proper oversight compared to international counterparts such as the UK Gambling Commission.
The federal government has faced repeated calls to establish a federal regulator to replace the fragmented, state-based system. However, the administration has shown reluctance to adopt measures such as a nationwide advertising ban, which were among the more controversial recommendations of the Murphy Report.
Reports suggest the government delayed action in late 2024 amid concerns that aggressive reform could provoke backlash from media networks and major betting companies during the lead-up to the 2025 election.
While pressure for reform builds, Australia's gambling market remains one of the largest in the world. Analysts estimate the country's annual wagering turnover exceeds AU$244 billion, generating gross profits of approximately AU$32 billion.
Despite increased scrutiny and the potential for tighter regulations, industry expansion continues. Several new brands have entered the market, including Philippines-based XBet, the recently launched NextBet, and Betdragon, owned by MintBet, which also operates multiple regional betting platforms.
At the same time, consolidation activity is reshaping the sector. A bidding contest between Australian start-up Betr and Japan's MIXI Corporation for control of PointsBet has concluded with MIXI acquiring a 66.43% majority stake and gaining representation on the company's board.
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