Sportsbet Receives Fine for Illegal Gambling Ads

Liquor & Gaming NSW, the New South Wales gaming regulator, fined SportsBet $12,260 for illegal gambling advertisements. SportsBet is an Australian subsidiary of the Paddy Power-Betfair gaming group of out of the British Isles.

The illegal gaming advert solicited friend referrals. Any existing customer who convinced a friend to join the website and make a real money bet could collect a fee.

SportsBet’s fine included $7090 for the illegal advert, along with an additional $5,170 in legal costs.

The advertisement in question had cartoon characters giving a “thumbs up” sign. It also contained the ad copy: “Refer a friend — get a $100 bonus bet for every friend you refer to join sportsbet.com.au (excl. VIC, NSW, WA & SA) terms and conditions.”

SportsBet “Illegally Offering Enticements”

Liquor & Gaming NSW wrote SportsBet that its adverts, “Illegally [offered] enticements to its customers to lure their friends into opening online gambling accounts with Sportsbet.”

A new law came into effect in June 2018 which is the source of confusion. Prior to June last year, refer-a-friend inducements would not have been illegal.

NSW Magistrate Closes a Loophole

A New South Wales magistrate imposed the policy from the bench. Under the old system, companies could offer such inducements by adding in special exclusions in the fine print. The terms of use no longer provide a loophole, due to a 2018 case.

In that case, the magistrate wrote, “There was a need for a penalty to act as a deterrent for all gambling operators to ensure that they are compliant with state laws.”

Sportsbet Fined for Refer-a-Friend Policy

SportsBet presumably is not the only offender, but they have been an example. It is common for online casinos, bookmakers, and poker sites to offer $100 or more in a refer-a-friend policy. Often, such policies have their own listing on the site’s promotions page.

Refer-a-Friend policies are an outgrowth of the traditional affiliate program, where third-party operators receive a fee or a percentage of customers they sign up. Moving forward, bookmaker sites operating in New South Wales need to be more careful.

The New South Wales Liquor & Gaming Division said it hopes the fine sends a message to other gaming operators. In their own annoucement of the fine, L&GNSW wrote, “The New South Wales parliament has increased penalties for illegal gambling advertising, and this has raised the need for general deterrence.”

Sportsbet Pleads Guilty

Sportsbet pleaded guilty to all charges in the case. A Sportsbet spokesperson cited the company’s long history of compliance. Also, the spokesperson noted the judge in the case stated one of the advertisements unintentionally broke the law.

The company made a statement on the fine: “Despite the company’s long-standing record of compliance with gambling regulation and gambling advertising laws in the country, it accepts the court’s decision and acknowledges that it failed to meet the required standard.”

About Liquor & Gaming NSW

Liquor & Gaming NSW is a divison of the New South Wales Department of Industry. Liquor & Gaming NSW serves as the main licensing authority, implementation oversight, and regulator for alcohol sales and gaming operations in the state.

The regulator has a stout task. New South Wales has more poker machines than any other Australian state or territory. Of the $24 billion in gaming revenues in the 2016 fiscal year, New South Wales pokies generated $6 billion of the income.

About Sportsbet

Sportsbet is Australia’s largest online bookmaker. In 2012, it became Australia’s biggest corporate bookmaker, too. The Melbourne company launched in May 1993 as Australia’s first licensed bookmaker.

Paddy Power acquired Sportsbet in December 2010. Since Paddy Power merged with Betfair to become Paddy Power-Betfair in February 2016, Paddy Power-Betfair has been Sportsbet’s parent company. The deal was estimated to be worth A$200 million.

In August 2011, Sportsbet admitted to the Australian parliament it paid around $3 million to $4 million in commissions to copanies and individuals, which might have been a breach of Australian legislation that banned secret commissions. Those in the gambling industry know such commissions are quite common and considered a matter of course in other countries.

Welcome bonuses became a point of contention in 2013. Sportsbet and the Victorian Government became embroiled in a legal dispute over a state law that banned bonuses for customers who joined a betting site. Sportsbet contended the Victorian law did not applyk, because its license was in the Northern Territory.