Gambling insiders have said an immediate ban on bonus bets, deposit matches and inducements would have a much bigger impact on the industry than a blanket ban on advertisements.
A parliamentary inquiry has urged the federal government to immediately ban inducements – which are often targeted at people with a long history of gambling – rather than allowing a three-year transition period as recommended for advertisements.
Inducements, which also include early cash outs and rewards programs, have become a mainstream feature of the online betting market in Australia, which has rapidly developed into a multi-billion dollar industry. They allow gambling companies to influence where punters spend their money.
The inquiry was told “high-value customers” are individually managed by gambling representatives and “encouraged to gamble more through personalised inducements, regardless of whether they are experiencing gambling harm”.
“Inducements are effective in marketing gambling, especially to young people, because they encourage a belief that gambling isn’t risky and that gamblers are minimising losses,” the inquiry’s report said.
“However, inducements do the opposite; they increase losses by encouraging riskier bets and increased betting expenditure, and draw gamblers’ attention away from harm minimisation messages.”
Multiple gambling insiders have told Guardian Australia that banning inducements would be a greater threat to the industry than advertising restrictions.
“The impact of brand advertising is very long-term and hard to measure, whereas inducements have a direct response,” said one insider not authorised to comment publicly.
Mitch Reid, the head of regulation and compliance at Palmerbet, said the advertising ban was not the inquiry’s most significant recommendation.
“Banning inducements would have an immediate impact, given the importance they have to the ecosystem of the industry, and the amount they ultimately contribute to prize money, wages, animal welfare and the integrity functions for racing and sport,” Reid said.
“The advertising is an issue, but I don’t think anyone was under any illusion that changes were coming in that space. There are other recommendations in the report that [have] a lot more serious consequences to the industry.”
Australia’s largest online gambling company, Sportsbet, had urged the inquiry to adopt a nationally consistent approach to inducements. The inquiry instead recommended they be banned altogether.
The committee chair, the Labor MP Peta Murphy, told Guardian Australia’s politics podcast the inquiry recommended “starting with things that are not easy, but are perhaps easier to implement”.
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“For example, we proposed banning targeted advertising on social media … and banning inducements where a person is offered two-for-one bets, for example, or bet $1,000 and we’ll give you $1,000 worth of free bets, which we heard are an insidious way of keeping problem gamblers gambling,” Murphy said.
Many gamblers who gave evidence to the inquiry welcomed the recommendation, including Mark Kempster, who was emailed inducements despite being on a self-exclusion register.
The advertisements, seen by the Guardian, included images of the former AFL player Brendan Fevola and the former Australian cricketer Mitchell Johnson cheering. Bonus payments of up to $50 were available if a chosen horse ran second to 10th.
“It is near-on impossible for someone battling problem gambling to not be sucked in by these inducements,” Kempster said. “They knock the person who is trying to head down the right path straight back down the wrong path again.”
Samantha Thomas, a gambling researcher at Deakin University, said the ban on inducements was important to reduce community harm.
“Our research shows that marketing around free bets or money-back offers can create perception for children that gambling has little risk attached to it,” Thomas said.
“Some children also tell us that they would bet when they are older if they got a good ‘deal’ from a gambling company.”