September 21

Xenophon vows to crunch sports bet credit

first_imgIn the wake of a landmark report by Australia’s peak financial counsellors’ organisation, Senator Nick Xenophon has promised to introduce legislation to cut off the provision of credit to gamblers by sports betting firms.“Increasing numbers of Australians, mostly young men, are falling prey to the predatory approaches and easy credit of [these] firms. It is deeply troubling that these firms can use unregulated credit to hook young gamblers on betting. It has to stop,” said the senator.Senator Xenophon this week launched the ‘Duds, Mugs and the A-List report’, published by Financial Counselling Australia (FCA), which sets out the insidious practices of online sports betting firms, and the disastrous consequences for people drawn into debt after being given access to credit.The title of the report comes from a quote from a former employee of a sports betting company who described how the company he worked for segmented its customers. “‘A-List’ customers are wined and dined and offered credit ranging from $100,000-$500,000, ‘B list’ customers are ‘serious credit punters’ and are offered up to $20,000 in credit. The ‘duds’ or ‘mugs’ are everyone else: this group is offered $200-$500 of unsolicited credit.”The FCA report related case studies of individuals losing tens and hundreds of thousands of dollars after being encouraged to continue betting to recover losses. One punter lost $160,000 in just four sports betting sessions. Compared to traditional forms of gambling, internet sports betting – through outlets such as Sportsbet, Bet365 and Tom Waterhouse.Com – “turbo charged the risks of problem gambling”, with firms using aggressive, high-tech strategies to target young men, increasingly to the point of ruin, said Sentaor Xenophon.Chief among the tactics employed is to provide credit to entice new gamblers and then increase the credit to keep them engaged, often for higher and higher stakes as the punter chases mounting losses.Sports betting firms also used direct email and phone calls to ‘bond’ with their customers, along with enticements such as free tickets to sporting events to attract predominantly young male gamblers.Senator Xenophon said his legislation would ban the provision of credit by sports betting firms, as was promised by the Coalition before the last election.Despite providing credit and using often brutal means to recover debts within weeks of being incurred, sports betting firms are beyond the reach of Australia’s consumer credit protection laws. The firms, most of which are registered in the Northern Territory where credit rules are lax, are not required to hold an Australian Credit Licence or Australian Financial Services Licence. Extending credit to online gamblers is already illegal in Victoria. Following global trends, the sports betting industry in Australia has grown rapidly over the past five years and is forecast to grow at a faster rate than other forms of gambling, replacing horseracing, which is declining. Facebook Twitter: @NeosKosmos Instagramlast_img read more