Is this more than a spam non-compliance issue?

Sportsbet has paid the Australian Communications and Media Authority (ACMA) a record penalty of $2.5 million for breaches of Australia’s Spam Act 2003. This amount is the largest infringement notice penalty issued by ACMA. Further, Sportsbet is also required to issue customer refunds which will total approximately $1.2 million for money lost on bets associated with the spam messages.

Background

Between January 2020 and March 2021, Sportsbet sent marketing texts and emails to consumers which included:

  • incentives to place bets; and
  • upcoming race alerts.

In an investigation conducted by ACMA, Sportsbet was found to have sent more than 150,000 text and email marketing messages to more than 37,000 consumers. These customers, some of whom were problem gamblers, had tried unsuccessfully to unsubscribe from marketing campaigns. Further, more than 3,000 marketing messages were sent without an unsubscribe function.

In addition to the payment of the $2.5 million penalty, Sportsbet has provided a three-year court-enforceable undertaking which requires it to:

  • implement a compensation program to refund those customers who lost bets made in connection with the spam messages. The amount of refunds is estimated to be about $1.2 million; and
  • review its policies, systems and training, with the review to be conducted by an independent consultant.

“Sportsbet’s failures in this matter had the real potential to contribute to financial and emotional harm to these people and their families.”1

Neida O’Loughlin, Chair of ACMA

What are the unsubscribe requirements?

The Spam Act requires that any electronic marketing messages are sent only with the recipient’s consent. Electronic marketing messages must contain an unsubscribe option which is functional for at least 30 days after the message is sent. Unsubscribe instructions must be presented clearly. Exercising the unsubscribe option must not require the payment of a fee and cost no more than the usual cost of exercising the option (for example a standard text charge if texting STOP to op-out). Any unsubscribe requests must be actioned within 5 working days.

More than just a spam issue?

Yes! This ACMA investigation raises other compliance issues not directly relevant to spam, some of which we outline below.

Northern Territory

The NT Code of Practice for Responsible Service of Online Gambling 2019 (NT Code) applies to all Northern Territory licensed bookmakers. Under the NT Code, bookmakers are only permitted to send direct marketing material if:

  • recipients have provided their express consent to receive the direct marketing material;
  • persons are offered the ability to unsubscribe from receiving direct marketing materials; and
  • for electronic marketing materials, the link to unsubscribe is functional and easily accessible.

Under the NT Code, if a person unsubscribes from receiving direct marketing material, self-excludes or closes their account, the bookmaker must not send marketing material to that person at any time after 24 hours from the receipt of the unsubscribe, self-exclusion or account closure request.

New South Wales

Similarly, under the Betting and Racing Act 1998 (NSW) (BRA), bookmakers must not send gambling advertisements via direct marketing to betting account holders in NSW unless the recipient has provided express and informed consent to receive gambling advertisements and that consent has not been withdrawn. Consent will be deemed to have been withdrawn if a recipient unsubscribes, closes their account or has not logged into their betting account for a period of 12 months. The BRA also requires that marketing message recipients are provided with a means to easily unsubscribe from receiving the marketing messages.

Conclusion

As such, sending marketing materials without a recipient’s consent, or to someone who has unsubscribed, not only breaches the Spam Act, but is also likely to contravene State/Territory law and policy (and, for NT bookmakers, may lead to disciplinary action being taken by the NT regulator). Further, if a customer self-excludes, closes their account or has not used their account for 12 months, continuing to send them marketing messages (even if the message contains an unsubscribe feature and would appear to otherwise comply with Spam Act requirements) may be in breach of the NT and NSW requirements.

An expensive cautionary tale

All gambling operators are strongly recommended to review their marketing programs and systems to ensure that they comply fully not only with their obligations under the Spam Act but also their obligations under State/Territory laws and policies which apply to their marketing activities. Electronic marketing messages must not be sent to recipients who have unsubscribed nor to consumers who have, for example, self-excluded or closed their accounts.

Getting it wrong can be very costly!