A crackdown on the advertising of gambling inducements in Australia’s NSW has repercussions that extend far beyond its boundaries, says Joanne Christie
Introductory free bet and bonus offers have long been one of the primary ways operators looked to pull in new punters in Australia. But it’s about to get a lot riskier to use them thanks to a change in the rules in NSW, the country’s most populated state.
The NSW government, via the Betting and Racing Act 1998, has long banned advertisements offering inducements to gamble or open a wagering account that could be taken up by NSW residents.
But as long as operators put a disclaimer on their ads and made sure NSW residents couldn’t sign up for them, they were free to run their offers across any media without too much concern.
But the amendments, which come into force on Monday (July 2), ban any advertisement published to the “world at large” that is able to be viewed, heard or accessed by NSW residents.
Essentially, this means operators will not be able to advertise inducements in any nationwide form of media unless NSW residents can somehow be excluded. For online operators this is particularly problematic as typically their websites and social media are not state-specific.
When the government first released its draft guidelines back in March, it received a large number of objections from corporate bookmakers and also media outlets, with the latter being concerned they could also be on the hook for the huge fines the changes to the Act brought in by publishing adverts on behalf of gambling companies.
Shortly afterwards, Responsible Wagering Australia’s executive director Stephen Conroy told iGB: “RWA was concerned by the lack of consultation prior to legislation being introduced into the NSW Parliament. It is never the intent of RWA members to be non-compliant with government regulations.
“However, because of the lack of consultation, there are likely to be broad unintended consequences which will conflict with the regulations in place in other Australian states and the ability of wagering operators to service customers outside of NSW.”
Unfortunately, the regulator doesn’t seem to have paid much attention to the objections received when it did consult as the final guidelines, released last week by Liquor & Gaming NSW, are little changed from the original guidelines.
“There are a couple of tweaks but it is mostly semantics,” says Jamie Nettleton, a partner specialising in gaming law at Sydney law firm Addisons.
Racing exemption raises eyebrows
Interestingly, however, one change is that the regulator said it did not intend to enforce the rules in relation to racing-only platforms.
This is something Dean Shannon, founder of relatively new Australian sportsbook Neds, says he takes issue with. “Can’t say I agree with it all, especially the carve-out for racing only websites and broadcasters, which is clearly favouring the TAB properties. In my view inducements to NSW residents is either allowed or not.”
Without reading the guidelines too closely, a canny sportsbook operator or affiliate could be forgiven for thinking it might not be too bad an idea to strip out their racing content from their other sports to qualify for the racing exemption.
But this too would fall foul of the regulator, says Nettleton. “The important point in there is it is about existing platforms, so if I was to suddenly change or start providing something new down the track that doesn’t seem to be covered by this exemption even though that doesn’t really seem sensible.”
The regulator does say it will not consider an advertisement to have been published online where the operator has geo-blocked all advertisements so NSW residents can’t see them, but one industry insider told iGB they do not consider this to be a “realistic option”.
Shannon, however, says Neds will begin geo-blocking, along with using different advertising in other states, and that he thinks the regulator’s intent is “not to penalise the operators who are doing what they can in this regard”.
This does seem a somewhat optimistic view from an operator that itself just recently incurred the wrath of the NSW regulator. In May, Neds was fined AU$18,000 (£10,115) for publishing advertising that breached the current rules with regard to inducements for NSW residents.
This week ClassicBet was also fined — in its case AU$9,470 — for unlawful gambling advertising. In both cases, Liquor & Gaming NSW put out releases making clear it was about to get even tougher on advertising that breaches the law.
In a statement after Neds’ conviction, Liquor & Gaming NSW deputy secretary Paul Newson said: “While this case needed to be prosecuted under the laws that existed when the offences took place, new laws will ensure operators will incur substantially higher penalties for irresponsible practices.
“Under the new laws, maximum fines for offering unlawful inducements to gamble have been increased tenfold, and directors of wagering businesses can be held personally liable and criminally convicted for gaming offences.”
From next week, companies could face fines of up to AU$55,000 per offence, and individual directors can also be fined up to AU$5,500 per offence committed by an operator.
In fact, the wording of the amended Act is such that it would seem to apply to anything viewable in NSW published anywhere in the world, although Nettleton says he does not see the NSW government trying to prosecute overseas operators.
“They have certainly got the perception that it applies to everybody but the main focus, I’d say 99% of the focus, is really on the local operators not the overseas operators,” he says. “There are a couple of references in the guidelines in respect of more global advertising so they perceive that it applies to them. But it is a separate point whether they would seek to enforce against them.”
Uncertainty for affiliates
For affiliates — and indeed other publishers such as newspapers and television stations — the guidelines did provide some comfort in that they made clear that publishers would not be held accountable, at least not initially, for publishing illegal advertisements provided by operators.
The guidelines state that if the ad is “in the form provided or was approved by or on behalf of the betting service provider” and the publisher has not been notified that the ad is prohibited then they will not be guilty of an offence. Once notified an ad is in breach of the Act they must then stop running it.
However, given many affiliates produce their own content and also publish user generated content related to gambling offers, there is still a big risk that affiliates could find themselves in hot water with the regulator.
And while big affiliates may have the ability to change their business practices to adapt to the new rules, whether or not the smaller one-man band type outfits can do so remains to be seen. If not, and operators start finding themselves under fire with the NSW government for the actions of their affiliates, a similar situation to that which has occurred recently in the UK may emerge.
If only big affiliates are able to geo-block and make sure they comply with the NSW rules, smaller affiliates may find themselves cut from Australian operators’ programmes in the same way some found themselves cut by UK-facing operators.
It’s too soon to tell how tough NSW will be on operators and affiliates when it comes to the new laws and the regulator has specifically stated that the guidelines are subject to change in future. But it’s certainly likely that there will be a lot more caution adopted Down Under from next week.