The News Corp-backed wagering company Betr has been fined a record $210,000 for splashing 100-1 inducements to gamble on affiliated newspapers, radio and television stations when it launched last year.
The company offered gamblers massively inflated returns on every horse in the Melbourne Cup, provided they bet less than $10. Similar inducements were offered for the Cox Plate and AFL and NRL markets in a bid to lure customers away from established gambling companies.
The promotions generated thousands of new clients and publicity for the company, but an investigation by Liquor & Gaming NSW has ruled the stunt breached regulations by encouraging people to open a betting account and gamble more frequently.
The 14 separate infringement notices collectively represent the largest fine ever issued to a gambling company over inducements in NSW. They come after the Northern Territory regulator imposed a much smaller fine for advertising breaches in February.
Liquor & Gaming NSW’s executive director, Jane Lin, said the $210,000 fine was appropriate given “significant breaches of the law” by Betr. Anti-gambling advocates have previously complained about financial penalties being too small to have an impact.
“This company tried to attract a new customer base and establish a significant market share with promotions that we consider crossed the line, using inducements that had the potential to cause harm to the community,” Lin said.
“In many cases, such promotions can only be legally offered to betting account holders who, unlike the general public, have made a conscious decision to open an account and receive this information.”
Betr stopped the inducement campaign when the NSW regulator approached it with concerns last year. By agreeing to pay the fine without contesting it, Betr may have avoided a potentially lengthy court process.
But a Betr spokesperson said the company did not believe it had breached regulations and called on the state regulator to clarify guidance given to the sector.
“We offered and advertised the $100-1 Melbourne Cup market in accordance with the law and entirely consistent with the guidance published by Liquor and Gaming NSW which clearly indicated this conduct was legal,” the spokesperson said.
“Whilst we cooperated fully with Liquor and Gaming, we do not accept, and have made no admissions to breaching NSW law. Our decision not to challenge the penalty notices was made to resolve the matter amicably.”
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Earlier this year, the Tabcorp chief executive, Adam Rytenskild, accused Betr of launching “highly distortionary promotional offers” to improve its market share shortly after launching. The company is now is direct competition with Betr as it seeks to expand its online gambling products.
“We are very conscious of our regulatory obligations and would like to work constructively with the NSW Government to remove the inconsistency between the regulator’s current view and the guidance issued to industry,” the Betr spokesperson said.
News Corp, which invested $49m into the start up along with former BetEasy chief executive Matthew Tripp and US-based Tekkorp, has been distancing itself from the gambling company in recent months. Two executives, Peter Blunden and Mark Reinke, recently quit Betr’s board.
News Corp’s international accounts revealed affiliate losses of around $33m in the final six months of 2022, with a share of those losses attributed to Betr. The company’s one-third stake in Betr is expected to shrink.