Betting service providers who have long relied on disclaimers in their advertising to exclude NSW residents from offers of inducements to gamble or to opening betting accounts will no longer be able to do so under proposed new laws.

The introduction of the Liquor and Gaming Legislation Amendment Bill 2018 (the Bill), and other related bills impacting NSW’s gaming industry, will significantly change the legislative landscape for gambling advertising and inducements.

Significantly, the Bill seeks to amend the Betting and Racing Act 1998 (NSW) (Act) in relation to advertisements containing inducements to gamble. This Law Alert provides a summary of the amendments proposed in the Bill that relate to gambling advertising and inducements.

Key proposed changes relating to advertising and inducements

  • Broadening the current prohibition against advertisements that offer inducements to participate in any gambling activity where the advertisement is accessible by a person in NSW (i.e. regardless of the use of a disclaimer).
  • Increased penalties for offering inducements.
  • Increased director and officer liability in relation to certain offences under the Act, including offences relating to gambling advertising and inducements.

Prohibition against inducement advertising

The Bill proposes to broaden the current prohibition of inducement advertising to include advertising that can be accessed by a NSW resident despite the offer of inducement (e.g. a bonus bet) not being available to them. This prohibition relates not only to betting service providers but also to third parties who publish these new types of prohibited advertisement.

In practice, this means if the new Bill becomes law, betting companies, and third party affiliates, will be prohibited from publishing or communicating certain gambling advertisements in NSW even though the advertisement might clearly state that the relevant offer is not available to NSW residents.

Increased penalties

The Bill proposes an increase in the maximum penalties for various offences under the Act including offences relating to advertising and inducements. The maximum penalties for offences are currently $5,500 per offence for corporations, and will be increased to a maximum penalty of $55,000 per offence for corporations under the proposed new laws. This will bring the penalties in line with other existing offences in liquor and gaming legislation.

Directors’ and officers’ liability

The Bill will increase the potential liability of directors and officers who are involved in the management and conduct of companies who breach these laws. Directors and officers of betting service providers run the risk of being charged in circumstances where the betting service provider breaches advertising and inducement prohibitions. Directors and officers will need to demonstrate that they took reasonable steps to prevent the relevant breach. Boards should urgently review their marketing processes in anticipation of this new law.

If passed, these laws will significantly impact the current advertising practices of betting service providers and other third parties (e.g. online bookmakers’ affiliate partners). Gaming and wagering related businesses should regularly review all advertising programs to ensure ongoing compliance with the myriad of State, Territory and Commonwealth laws that affect their business model. These new laws represent a major step by a State government to curtail online bookmakers’ reliance on disclaimers and we can reasonably expect other jurisdictions to follow.