Online betting agencies using illegal offers to lure new users
By Nigel Gladstone
May 12, 2019 — 12.00am
Some gambling companies are using a legal loophole to induce punters to gamble online while regulators are cracking down on others.
NSW passed laws in July 2018 banning the promotion or inducement to gamble, although an exemption allows such advertising on racing websites.
Free bet offers to sign up to gambling websites are illegal in NSW unless they are on a racing website. Credit:Racenet.com.au
Since then, 19 prosecutions have caught online gambling companies breaking this law by using other sites such as on Apple's app store.
Regulators are cracking down on these companies with prosecutions running twice a month on average since July last year but the fines are a mere "cost of doing business", critics say.
An email offer of free credit sent after signing up. Credit:TABcorp
A Sun-Herald investigation found dozens of offers that may breach the law.
PointsBet, Sportsbet, Sportschamps, Ubet, Neds, Bet 365, Tabcorp and Ladbrokes have all been convicted of illegally advertising to entice people to gamble since July last year. Courts have imposed fines worth $131,950 plus $184,139 in court costs.
The Sun-Herald tested both the TAB and Sportsbet's promotional offerings on racing websites, using a Sydney address, and found, once an account was opened, both companies offered to match a deposit instead of providing what was advertised on the racing websites.
A Tabcorp spokesman said its sign-up advertising was fully compliant with NSW laws on the advertising of inducements and the provision of bonus bets.
"Sign-up bonuses, which are advertised legally under the exemption for exclusive racing publications, are not provided to customers in NSW," he said.
"Any bonuses provided to NSW customers are non-sign-up offers made only after customers have chosen to create an account."
Free bet offers to sign up to gambling websites are illegal in NSW unless they are on a racing website. Credit:Sportsbet
Liquor & Gaming NSW said the new rules threaten maximum fines of $55,000, 10 times higher than previously and any potential breaches would be investigated.
"We recently put all wagering operators on notice that responsible gambling conduct needs to improve," a Liquor & Gaming NSW spokesman said.
Email offer sent after joining Sportsbet. Credit:Sportsbet
Monash University Associate Professor Charles Livingstone said the fines were "barely slaps on the wrist", given the scale of revenue available to gambling operators, who might see it "as a cost of doing business".
"The companies know that the benefits they receive will almost certainly be in excess of the likely penalties," Dr Livingstone said.
"Until the regulators both have the capacity and the willingness to cancel or suspend licences, as well as [impose a] fine for breaches, the companies will continue to flout the regulations."
Sportsbet, owned by London-listed gambling giant Paddy Power Betfair, banked $752 million in local turnover last year and was fined $10,000 plus legal costs in March for an ad that read: "Refer a Friend – Get a $100 Bonus Bet for every friend you refer to join sportsbet.com.au (excl. VIC, NSW, WA & SA)."
Sportsbet's local marketing efforts were estimated to cost more than $490 million between January 2013 and June 2018, an ABC investigation found.
PointsBet, which recently bought the rights to name the Cronulla Sharks home ground PointsBet Stadium, pleaded guilty to using a sign-up bonus.
Free bet offers to sign up to gambling websites are illegal in NSW unless they are on a racing website.
Magistrate Garry Still said the ad may not have been easy to find (on the Apple app store), but it had the potential to drive people to the offer and fined the company $20,000.
Most online bookies are licensed in the Northern Territory and, because there is a patchwork of gambling licensing and legal systems across Australia, it makes it harder to prosecute breaches of the law, Dr Livingstone said.
"[The NT is a] very low taxing and, in my opinion, poorly regulated jurisdiction," he said. "The best solution would be for the Australian government to regulate online gambling and impose uniform regulation across all operators.
"Regulating a 21st-century business using 19th-century jurisdictional and regulatory principles is hard to justify, especially when egregious breaches are commonplace."
The NSW minister responsible for gaming, Victor Dominello, said most people who look at dedicated racing platforms are already gambling website customers but there is an "ongoing challenge of ensuring inducements are only marketed to pre-existing customers".
Sportsbet declined to comment. Racenet was contacted for comment.
Nigel Gladstone is an investigative journalist at The Sydney Morning Herald.Connect via Twitter, Facebook or email.