Betfair Australia Ordered to Pay Back $150k Losses to Problem Gambler

Betfair Australia has been ordered to pay back $150,000 in losses to one of its gamblers after ignoring red-flag behavior and allowing him to continue gambling on its online portal. The Commission also fined the company an additional $13,175 for breaching its license conditions. Commenting upon the landmark verdict handed down by the Northern Territory Racing Commission, Lauren Levin, the policy director of Financial Counselling Australia, stated:

“This case is a turning point. It will send a signal to the online gambling industry that it cannot ignore its obligations to stop accepting bets from people who are obviously red-flagged.”

Who is Betfair Australia?

In 2014, James Packer’s Crown Resorts bought 50% of the shares it did not own in Betfair Australia for $10 million from Britain’s Betfair Group. These days the betting exchange boasts around 20,000 active monthly customers, who are able to bet against each other across a range of different sports or horse races.

What Has Betfair Australia Been Penalized?

In February, a heavy-spending customer asked Betfair Australia to transfer $150,000 from his gambling account into his bank account. Over the next few hours, however, the customer went on a gambling spree and lost $190,000 on the site, after which, in a “desperate mindset”, he called Betfair and requested that they reverse the transaction and put the transfer money back into his online gambling account.

A series of phone calls subsequently saw Betfair agree to a “one-off” $145,000 transfer reversal. The gambler then proceeded to lose all of that money the very same day, and the following day lost the remaining $5,000 that Betfair had deposited in his bank account.

Failure to Identify Problem Gambler

After racking up his significant losses, the distraught gambler contacted the NT Racing Commission which subsequently carried out an investigation into the incident. In its findings, the Commission ruled that Betfair Australia should have been able to identify the player as exhibiting problem gambling behavior, especially with the gambler having self-excluded himself from the site on two occasions.

The red-flag signs that its should have identified includes extended gambling sessions, betting pattern changes, and an increase in deposit frequency, as well as the amount of money deposited into his account. As the Commission stated:

“There is evidence that Betfair should have reasonably seen some red-flag behaviors. It is reasonable in the circumstances, and particularly given full knowledge of the complainant’s previous self-exclusions and time-outs from his account, that a review of all his betting activity up to the time of the request to cancel the withdrawal to be carried out.”

Landmark Decision

Australia has the world’s highest gambling losses per adult, with the situation leading to a public war between gambling operators and anti-gambling groups. The NT Racing Commission’s ruling is considered one of the toughest ever slapped on an online gambling operator in the country, and has naturally been greeted positively by such groups.

Similarly, Financial Counseling Australia, which provides support for people in financial difficulty, has also haled the decision. Lauren Levin said that her organization frequently witnesses the negative effects caused by problem gambling, including suicides and family breakdowns. According to Levin, the recent ruling should encourage other internet gambling companies to live up to their commitments, and provide better protection for its customers against gambling addiction.

Betfair Declines to Comment

Betfair has issued no comment on the verdict, nor has it indicated whether it intends to appeal the ruling. The operator did, however, argue that it could not reasonably have known that the customer in question was a problem gambler as he had never indicated or expressed any gambling issues in the past.

The firm further added that its standard practice was to refuse customer request to have their fund withdrawals reversed, but that an exception was made in this case on account of the customer’s longstanding loyalty.