Court imposes $2.75 million in penalties on Bet365 companies for misrepresenting free bet offer

10 June 2016

The Federal Court has ordered Hillside (Australia New Media) Pty Ltd (trading in Australia as Bet365) and its UK service company, Hillside (Shared Services) Limited (together, Bet365) to pay penalties totaling $2.75 million for making false representations by Bet365’s ‘free bets’ offer to new customers, in proceedings brought by the Australian Competition and Consumer Commission.

In September last year, the Federal Court found that Bet365’s promotion of a “$200 FREE BETS FOR NEW CUSTOMERS” offer to customers in Australia between March 2013 to 13 January 2014 was misleading and deceptive and involved false representations because there were a number of restrictions and limitations that applied to the offer that were not brought to the customer’s attention.

In order to receive the represented $200 free bet offer, new customers were required to deposit and then gamble $200 of their own money first, before they could receive their $200 free bet.

“In this sense, if the restrictions and limitations had been appropriately brought to consumers’ attention, they would have been able to recognise that there was no ‘free’ bet, particularly given that they had to risk their own money before making such a bet,” ACCC Chairman Rod Sims said.

Customers had to gamble their deposit and bonus three times before being able to withdraw any winnings. As an example, a customer who made an initial deposit of $200 and received $200 was then required to gamble $1200 before being able to withdraw any money.

In imposing these penalties, Justice Beach noted the companies are large and collectively market themselves in Australia as the world’s biggest online betting company. The Court found that the conduct was serious, extensive in its duration and affected a large number of Australian consumers. Further it was found that the conduct involved a significant element of recklessness which occurred in an environment where there was no substantial and rigorous compliance program.

The Court also ordered Bet365 to send a corrective notice, by email, to affected consumers.

“The ‘free bets’ offer by Bet365 was aimed at enticing customers, particularly new customers who had not previously used such types of services and who were drawn into what the judge described as a ‘web of deception’,” Mr Sims said.

"It is disappointing that such a large and prominent business would engage in misleading marketing behaviour.”

“These penalties should serve as a warning to all businesses that is it not acceptable to promote ‘free’ offers as a headline offer without ensuring that any restrictions or limitations are disclosed in a prominent way that ensures consumers are fully informed before they are ‘enticed into a marketing web’,” Mr Sims said.

‘This is particularly relevant in an emerging industry like the online gambling market, where online and print advertisements target consumers who may not previously have used online gambling services."

Background

Bet365 is one of the world’s largest online betting providers. The Court has noted that the UK service company, Hillside (Shared Services) Limited earned revenue of GBP 932 million in the financial year ending 30 March 2014. Its Australian operations (Hillside Australia New Media) earned revenue from betting activity in the year ending March 2014, of AUD $29 million.

The free bet claims came to the attention of the ACCC as part of a coordinated sweep of ‘free’ representations on websites targeting Australian consumers. This initiative was part of a larger global effort through the International Consumer Protection and Enforcement Network.

Release number: 
MR 101/16
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