The gambling regulator is seeking answers from Ladbrokes after it emailed dormant customers warning them to place a bet or risk losing their balances to monthly inactivity fees, without disclosing their legal right to close accounts via a government site and have their money returned.
Entain, the $6 billion British gambling giant behind Ladbrokes and Neds in Australia, sends the emails to customers who have been dormant for 18 months, warning them it will begin charging a $5 a month fee for holding their money.
The Australian Communications and Media Authority confirmed to this masthead it was reviewing whether the emails breached rules requiring betting companies to promote BetStop, a one-stop federal service that allows people to close all their gambling accounts, have their money refunded, and prevent the creation of new accounts in their name.
It comes days after Entain escaped without a fine despite being found to have breached laws to protect problem gamblers more than 500 times because ACMA’s investigation took so long it missed the legal window in which it can issue an infringement penalty.
Under the BetStop laws, which were designed to help gamblers fearing or fighting addiction, wagering companies registered in Australia must close the accounts and return balances to any customer who signs up for the program. The companies also have to bar excluded people from opening new accounts.
Wagering companies are obliged to inform customers about BetStop in any electronic messages promoting or advertising gambling, including activity statements. Whether Ladbrokes’ inactivity statements fall into that category is likely to be the focus of ACMA’s inquiries.
In an email telling a customer their account was about to be deemed inactive, which was seen by this masthead, Ladbrokes says: “It has been a while since you’ve placed a bet with us, but you currently have funds available in your Ladbrokes account.”
The email says the company “wanted to remind” the customer that they had agreed that after 18 months of no betting activity – which includes placing a bet, depositing money or withdrawing winnings – “an account is deemed inactive and an inactive account fee of $5 (or your remaining balance if less than $5) will be charged”. It says the $5 will then be charged monthly.
“If a wagering activity is made before [a certain date] … your account will not be considered inactive and no deductions will be made to your account balance in this instance,” the email says.
If a customer’s balance includes money they deposited but never wagered, Ladbrokes does not allow them to simply withdraw it. It requires all deposited funds be turned over on a bet. Neither of the inactivity emails mention BetStop, nor the ability for a customer to have their funds returned to them without placing further bets.
Ladbrokes declined to comment. But it is not the only gambling company to require customers to bet their deposits before withdrawing them without using BetStop, or to charge inactivity fees. The gambling industry also faces money-laundering issues in which criminals place dirty cash in betting accounts and then withdraw it, making it appear as though the money has been legitimately won via wagering. Australia’s anti-money laundering laws, however, do not require money to be wagered before being withdrawn.
After this masthead showed ACMA Ladbrokes’ inactivity warnings, the regulator said it would investigate further if Entain was breaching its obligations to promote BetStop in electronic messages “offering to provide” or advertising betting, or activity statements.
“We will seek further information from Ladbrokes about the classification of their ‘inactivity’ message and the company’s approach to meeting the relevant legislative obligations,” an ACMA spokesman said.
ACMA can issue infringement penalties of up to $59,400 per breach of BetStop obligations. It can also take providers to court to seek civil penalties of up to $12.375 million per day a breach occurred.
Gambling Policy Hub director Lauren Levin, an advocate for industry reform, said Ladbrokes’ inactivity fee deductions could encourage people who had quit betting to start again.
“Instead of nudging a lapsed gambler to bet with the threat of ‘inactivity fees’, Ladbrokes should be telling customers that they can take a break, close their account or have the option of going on BetStop,” she said.
“Inactivity fees are outrageous, and not telling customers their options to get their money returned is just wrong.
”Money sitting in an account belongs to the customer, not the gambling operator. The customer has the right to close the account and have the funds returned, and be told about this.”
Independent ACT senator David Pocock, a vocal critic of gambling laws, was scathing of the fact that Ladbrokes’ parent Entain’s breaches last week had not resulted in a fine.
“Now we’re hearing allegations that someone was effectively told they had to place a bet to withdraw their own money, instead of being told they could use BetStop and get a refund,” he said.
“If true, that is completely unacceptable.“
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Elias Visontay is a National Consumer Affairs Reporter at The Sydney Morning Herald and The Age.Connect via email.