Tabcorp Holdings Ltd (TAH.AU) saw its stock price plummet 5.68% during Friday's intraday trading session, marking a significant decline for the Australian bookmaker.

The sharp drop follows news that Australia's financial crimes watchdog AUSTRAC has begun investigating Tabcorp's money-laundering and terrorism-funding countermeasures. In response to this development, Jefferies downgraded Tabcorp from "buy" to "hold," citing concerns that such investigations typically prove to be prolonged, costly, and disruptive to operations.

Analyst Kai Erman noted that "all potential outcomes are on the table, but this will likely remain a prolonged overhang," adding that previous investigations in the sector have shown risks can extend beyond punitive fines to impact operating earnings. Tabcorp has stated it will collaborate with AUSTRAC on the investigation.