Tabcorp's profits have been crushed by the cost of defending money laundering allegations

Vince Caligiuri/Getty Images

Tabcorp’s full year profit dropped 49% to $169.7 million as legal costs mount to defend allegations of non-compliance of anti-money laundering rules.

The result was also impacted by $14.4 million spent on establishing Sun Bets, a UK online betting business in a joint venture with News Corp’s The Sun newspaper.

The legal costs for civil proceedings by Australia’s financial intelligence body AUSTRAC came to $13.6 million.

Essentially, the betting business is accused of not fixing holes in its system to stop money laundering and terrorism financing.

Excluding significant items, underlying profit was up 8.5% to $185.9 million.

A short time ago, Tabcorp shares were flat, down just 0.1% to $4.84.

Tabcorp’s business is seeing some growth, especially in digital, with revenue up 2% to $2.188 billion. Tabcorp runs the TAB, National Sportsbet, Tabaret and Keno.

The board lifted full year dividends by 20% to 24 cents a share, fully franked.

“Over the past three years we have increased the ordinary dividend from 16 cents to 24 cents per share on an expanded capital base,” says CEO David Attenborough.

“Sun Bets is an exciting opportunity for Tabcorp to take its market-leading wagering capabilities into the $A7 billion UK online gambling market.”

More detail on the results:

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