Dangerous Increase in Online Betting - NFP Report
Tuesday, 18th August 2015 at 11:38 am
Access to credit provided by online sports betting companies, as well as inadequate mechanisms for limiting losses, is fuelling a dangerous increase in online sports betting and problem gambling, according to a report released today by Financial Counselling Australia.
Launched by Independent Senator Nick Xenophon, the report, ‘Duds, Mugs and the A-List: The Impact of Uncontrolled Sports Betting’, is based on the experiences of financial counsellors and their clients.
Financial counsellors, who work in Not for Profit community organisations and assist people in financial difficulty, says they are seeing more and more clients, mainly men, with debts related to online sports betting.
“They are often encouraged to bet by the offer of ‘free bets’ or ‘bonus bets’. Unsolicited credit may also be provided, often getting people into debt they cannot afford,” the report said.
Manager Policy for FCA, Lauren Levin, said an urgent ban on gambling with credit is needed.
“Sports betting companies should not be able to give gamblers credit, then take them to court six weeks later when they can’t pay. It also means a ban on gambling by transferring funds from a credit card, payday loan or similar source,” Levin said.
“Online sports betting magnifies the difficult issues already associated with gambling.
“Compared to poker machines for example, people can lose much larger amounts of money, they lose it far more quickly and they lose it hidden in the privacy of their homes. One of the case studies in our report is of man who lost the entire proceeds of the sale of his home – $160,000 – in just four sports betting sessions.
“Sports betting is portrayed as a bit of fun, but what financial counsellors are seeing is lives being destroyed. Many clients have huge debts and are groomed to get even further into debt. The end game is debt collection, bankruptcies, broken families, court orders to seize assets, forced home sales, and even sadly, suicide.”
FCA has called on the Federal Government to introduce national legislation to address the issue of access to credit for gambling, as well as meaningful harm minimisation measures to allow gamblers to control the amount of money they are prepared to lose.
However, Senator Xenophon said he will introduce legislation in the spring sitting of Parliament to cut off the provision of credit to gamblers by sports betting firms in the wake of the new report by Australia’s peak financial counsellors organisation.
“Increasing numbers of Australians, mostly young men, are falling prey to the predatory approaches and easy credit of sports betting firms. It is deeply troubling that these firms, many of them owned in the UK and Ireland, can use unregulated credit to hook young gamblers on betting. It has to stop,” Xenophon said.
He said the report sets out the insidious and ruthless practices of online sports betting firms and the disastrous financial and personal consequences.
Compared to older forms of gambling, Xenophon said internet sports betting “turbo charged the risks of problem gambling”.
“Internet sports betting firms are using aggressive, high-tech strategies to target young men, increasingly to the point of ruin,” he said.
“Chief among the tactics employed was providing credit to entice new gamblers and then more and more credit to keep them engaged in betting, often at higher and higher stakes or in order to chase mounting losses.
“But sports betting firms also used ‘matey’ one-on-one email and phone contacts, free tickets to corporate boxes and the like, to ‘Duchess’ clients, making them feel important and special so as to keep them betting.”
Senator Xenophon said his Bill would ban the provision of credit by sports betting firms, as was promised by the Coalition before the last election. It will also mandate a national ‘do not contact’ register for sports betting firms as many problem gamblers are simply unable to avoid these firms reaching out to them with offers and deals.
“Despite providing credit and using swift and brutal means to recover debts within weeks of them being incurred, sports betting firms are beyond the reach of Australia’s consumer credit protection laws, the National Consumer Credit Protection Act 2009. They are not required to hold an Australian Credit Licence or Australian Financial Services Licence,” he said.
Levin said, at the very least, there should be “a level playing field” regarding the provision of credit.
“The banks comply with legislation requiring them to lend responsibly. For example, banks have to consider a borrower’s capacity to repay the loan, and fund ombudsmen schemes to resolve disputes. Yet sports betting companies are not obliged to do any of this,” she said.