Ladbrokes tells gamblers to place a bet or have accounts depleted.
The gambling regulator is seeking a response from Ladbrokes after it emailed inactive customers warning them to place bets or risk losing their balance to monthly inactivity fees, without explaining their legal rights to close accounts and have their money refunded via a government site.
Entain, the $6 billion British gambling giant behind Australia’s Ladbrokes and Neds, is emailing customers who have been inactive for 18 months, warning them that it will start charging $5 a month to hold their money.
The Australian Communications and Media Authority confirmed to this imprint that it was reviewing whether the emails breached rules requiring betting companies to promote BetStop, a federal one-stop service that allows people to close all gambling accounts, have their money refunded and prevent new accounts being created in their name.
It comes just days after Entain escaped without a fine despite being found to have breached laws aimed at protecting problem gamblers more than 500 times after the ACMA’s investigation took so long that it missed the legal deadline for issuing fines for breaches.
Under BetStop laws, designed to help gamblers who fear or struggle with addiction, Australian-registered betting companies must close accounts and refund balances to all customers who have signed up to the scheme. Companies are also required to prohibit excluded people from opening new accounts.
Betting companies are obliged to inform their customers about BetStop in any electronic message that promotes or advertises gambling, including activity notifications. Whether Ladbrokes’ inaction statements fall into this category is likely to be the focus of ACMA’s investigations.
In an email informing a customer that their account is about to be deemed deactivated, Ladbrokes says: “It has been a long time since you bet with us, but you currently have funds available in your Ladbrokes account,” as seen by this imprint.
The email states that the company “wants to remind” the customer that they agree that if there is no betting activity for 18 months, including betting, depositing or withdrawing winnings, “the account will be deemed inactive and you will be charged a $5 inactive account fee (or if your remaining balance is less than $5).” It says you will then be charged $5 per month.
“If betting activity has been done before [a certain date] …in this case, your account will not be considered deactivated and no deduction will be made from your account balance,” it says in the e-mail.
If a customer’s balance includes money they have deposited but have never bet, Ladbrokes will not allow the customer to withdraw the money. It requires all deposited money to be converted into a bet. None of the inactivity emails make any mention of BetStop or the ability for a customer to have their money refunded to them without placing further bets.
Ladbrokes declined to comment. But it’s not the only gambling company that requires its customers to place bets before withdrawing money using BetStop, or charges an inactivity fee. The gambling industry also faces money laundering issues, where criminals place dirty money into betting accounts and then withdraw it, making it appear as if the money was legitimately won through betting. But Australia’s anti-money laundering laws do not require money to be wagered before being withdrawn.
After this imprint showed ACMA Ladbrokes’ inactivity notices, the regulator said it would further investigate whether Entain had breached its obligations to promote BetStop in electronic messages “offering to provide” or advertising bets or activity notifications.
“We will be seeking further information from Ladbrokes about the classification of the ‘no action’ message and the company’s approach to meeting relevant legal obligations,” an ACMA spokesperson said.
ACMA can impose infringement penalties of up to $59,400 per breach of BetStop obligations. Providers can also go to court to seek fines of up to $12.375 million per day the breach occurs.
Lauren Levin, director of the Gambling Policy Centre, an advocate for industry reform, said Ladbrokes’ inactivity fee cuts could encourage people who have stopped betting to start again.
“Instead of pushing punters into placing bets with the threat of an ‘inactivity fee’, Ladbrokes should tell customers they can take a break, close their account or have the option to continue with BetStop,” he said.
“Inactivity fees are too high and not telling customers their options for getting their money back is completely wrong.
“The money in the account belongs to the customer, not the gambling operator. The customer has the right to close the account, return the money and be informed about this.”
Independent ACT senator David Pocock, a vocal critic of gambling laws, slammed the fact that Ladbrokes parent Entain’s breaches last week did not result in fines.
“We are now hearing allegations that someone is effectively being told that they need to bet to withdraw their own money, rather than being told that they can use BetStop and get a refund,” he said.
“If true, this is completely unacceptable.”
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Elias Visontay is the National Consumer Affairs Reporter for The Sydney Morning Herald and The Age.Connect via email.
