Two corporate bookmakers, Sportsbet and IASbet were found to
have committed a number of offences following the offering of
inducements to open betting accounts.
This case highlights the attention being given by Australian
authorities to forms of advertising by betting operators involving
In Victoria, sports bookmakers are prohibited from offering to
Victorian residents inducements to open a betting account. This is
governed under section 4.7.10 of the Gambling Regulation Act 2003
(VIC) (the "Act"), which states:
"A wagering service provider
must not offer any credit, voucher or reward as an inducement to
open a betting account."
In October 2010, the Victorian Commission for Gambling
Regulation (VCGR) initially laid charges against
three wagering operators relating to betting inducements. These
charges were issued after VCGR's investigator, David
Leadbetter, accessed the wagering operators' websites in
September and October 2010.
Luxbet and Betstar admitted the breaches and were placed on good
behaviour bonds. On the other hand, Sportsbet and IASbet pleaded
not guilty and contested the charges on the basis that there was an
ambiguity in the word "offer".
The charges issued by the VCGR related to:
Sportsbet's offer of "Join now get $100 in free bets
on the races" and "Up to $200 free bet for first time
IASbet.com's offer of"$1000 free – 15% sign
Magistrate Fitz-Gerald held that Sportsbet and IASbet.com had
advertised on their websites an "offer" rather than an
"invitation to treat". Accordingly, Sportsbet and
IASbet.com were found guilty of four charges and six charges
respectively. The parties were fined a total of $7,500.00.
Amongst other issues raised, the key points of the case are:
An "invitation to treat" refers to an expression of
willingness to negotiate under contract law. However, Magistrate
Fitz-Gerald found that section 4.7.10 of the Act creates a criminal
offence and that the word "offer" is not used in the
Magistrate Fitz-Gerald stated that the process of accessing or
downloading the websites, from information on servers in the
Northern Territory, where Sportsbet was licensed, was at the heart
of the charges;
Even though the communication of material in the form of a
webpage was instigated at the request of the consumer, the process
involves the sending of communication from the server in Darwin to
the computer located in Melbourne. Magistrate Fitz-Gerald held that
this process of downloading amounted to the defendants making an
"offer" in Melbourne;
Magistrate Fitz-Gerald considered that stipulations
accompanying the offers (which included being over the age of 18,
providing an address and first making a deposit into a betting
account) did not alter the situation that a reward of a free bet or
bonus was being made as an inducement to open a betting
The case shows an increased willingness on VCGR's behalf to
enforce restrictions on betting inducements. When advertising free
bets or prizes (either with respect to opening accounts or existing
customers), wagering operators should be aware that any
advertisement is likely to be considered an offer as opposed to an
invitation to make an offer for a contract.
Further, the case illustrates how the concept of jurisdiction is
determined in the context of online advertising. The case suggests
that the location of the server hosting the advertisement (or from
which it is uploaded) is not relevant when assessing the relevant
jurisdiction. The significant factor is the location at which the
advertisement is accessed or downloaded. If the advertisement is
accessed or downloaded in Victoria, then Victorian gambling law
would apply. This is consistent with the principles set out by the
High Court of Australia in Dow Jones & Co Inc v
Gutnick (2002) 210 CLR 575 in relation to defamation, but is
the first time that an Australian Court has applied a similar
principle in the context of Australian gambling law offences.
As each State and Territory has different requirements with
respect to betting inducements, a wagering operator should
familiarise itself with all relevant legislation to ensure that it
is compliant in each State and Territory. The inconsistencies and
difficulties involved in complying with these different
requirements highlight the need to harmonise the regulation of
betting inducements. It is particularly impracticable in a global
and digital economy for wagering operators to be subject to
inconsistent advertising and betting inducement restrictions in
Australia (and globally).
The assistance of Mary Huang, Graduate, of Addisons in the
preparation of this article is noted and greatly appreciated.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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