Sportsbet Fined for Illegal ‘Refer A Friend’ Gambling Ad

A group if friends with their thumbs up
Australian company SportsBet has found itself in hot water over an illegal advert.

30-second summary

  •  SportsBet found guilty over breach of NSW advertising material
  •  Offers of $100 Bonus Bet to refer a friend
  • NSW implemented stricter penalties against gambling operators
  • Convictions could stand as high as $55,000 per offence

Australia’s homegrown betting firm, SportsBet, has pleaded guilty to breaching New South Wales guidelines on gambling ads. The trial questioned whether the advertisement enticed customers to encourage their friends to open gambling accounts.

The advert specified a reward of a $100 Bonus Bet in exchange for every referral. After being found guilty, SportsBet was issued a fine of $10,000 and ordered to pay more than $7,300 in legal fees.

Refer a friend

SportsBet has been convicted and fined after it was found to offer illicit “inducements” to customers in exchange for them cajoling friends into opening an gambling account with the platform. Paddy Power Betfair acquired the company in February 2016.

The Australian favored betting agent is not the first gambling company to use such tactics on its customers – Bet365 was recently in the spotlight for using cash rebates to continue the flow of money from losing clients.

But SportsBet hadn’t factored into account Australia’s strict regulations. Specifically, in New South Wales there is a ban on beguiling advertisements that encourage gambling.

Liquor & Gambling NSW, the state’s watchdog, opened an investigation after an advert was posted on on July 5, 2018. The ad showed two men sticking up their thumbs with the caption: “Refer a Friend – Get a $100 Bonus Bet for every friend you refer to join (excl. VIC, NSW, WA & SA) Terms and Conditions.”

The regulator stated it was a breach of the law to publish gambling advertisement material with “any inducement to participate, or participate frequently, in any gambling activity.” This also refers to opening an account.

L&G added that despite there being a disclaimer, the guidelines stated a bonus bet offer would be considered “illegal inducement.”

Pleading guilty

On Thursday, SportsBet pleaded guilty in the Downing Centre Local Court. The company found itself in receipt of a $10,000 fine for breaching the state’s gaming laws. SportsBet was also required to foot the bill of more than $7,300 in legal costs.

The gambling operator accepted the decision, with a spokesperson saying: “Despite Sportsbet’s long-standing record of compliance with advertising legislation across Australia, we accept that in this particular instance, we didn’t meet the required standard.”

SportsBet did note that the court had accepted the “legacy advertisement” in question as being careless. Magistrate Jacqueline Trad said the fine was necessary, and that the community was in need of protection.

Trad also said that the NSW parliament was implementing harsher penalties for operators partaking in the promotion of inducements and illegal gambling advertising. Fines could be imposed as high as $55,000 per offence.

Operators have in the past found loopholes to avoid conviction, by concocting fine-print exclusion clauses to avoid any issues. These loopholes, however, have mostly been closed. Company directors can also find themselves being prosecuted.  These laws were cemented in July 2018.

SportBet is not the first company in NSW to have been caught breaching the ban against enticing advertising material. Online bookmaker Neds was last year found guilty of five charges relating to advertising material. It was fined $18,000.

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