Lost in a loophole over betting

AUSTRALIANS are the biggest punters on the planet, and sports betting is the fastest growing form of gambling on the planet. But there are traps for the unwary, writes BAREFOOT INVESTOR.

Sports gambling online

A YOUNG bloke strides triumphantly up to the bar, with a winning smile.

His knockabout mates bask in his glory, slapping him on the back (in a totally non-sexual, manly kind of way).

The busty barmaid flashes our hero a sexy smile and says: “Did you just win … again? I’d like to have a trifecta with you, big boy.”

So that’s roughly the script for any number of sports betting ads that target young, cashed-up males.

Here’s the thing: Australians are the biggest punters on the planet, and sports betting is the fastest growing form of gambling on the planet. So it was only a matter of time before global conglomerates like the UK’s Ladbrokes set up shop here.

Not since Evian water — naive spelt backwards — has there been more truth in advertising. “Your honour, we called the company Lad-brokes! I mean, how much more obvious could we have been?”

Not to be outdone, the Tatts Group has announced that for this racing carnival it’ll be wafting the scent of freshly cut grass through their TABs “to capture the atmosphere of race day” — which admittedly is a welcome change from the normal scent at your local TAB: sweat, cigarettes, urine ... and desperation.

And so, while the sports betting companies blast us with ads of lads having a bit of fun on the punt, this week I decided to go out and find one of my own.

Let me introduce you to Jack, a 30-year-old bloke from the eastern suburbs of Melbourne.

Jack isn’t like most people his age: he lives at home with his mother, and has never worked.

His only income is from a disability support pension.

Jack is intellectually disabled.

His elderly mother worries about what will happen to him when she dies. Who’ll look after him?

That’s why she made the decision to put Jack on the title of their home (worth around $700,000), so he’d have an asset in his name that would be exempt from Centrelink benefits, and, more importantly, so he’d always have a place to call home.

(Remember this point — it’s key to the story.)

For the past few years Jack had a small betting account he’d use to make bets on the footy. Small stuff. Fifty bucks here and there. Nothing crazy — after all, his only income was a pension.

Yet Jack’s life changed forever in October 2011, when he received a phone call from Sportsbet, who’d bought his name in a marketing deal from Jack’s other betting account.

Sportsbet offered him three free $1000 bets so he could “get a feel for the service”.

Jack used the bets.

A few weeks later Sportsbet rang again, this time offering him $10,000 in betting credit. Jack declined the offer. They put it in his account anyway.

Then — without requesting it — Sportsbet increased his credit limit to $30,000. Then $40,000.

Eight days later they increased his credit limit to $60,000. Then to $80,000.

Jack gambled it all, and lost the lot.

Guess what happened next?

Sportsbet issued Jack with a warrant for the possession of his house. They demanded that he and his elderly mum vacate the property in 14 days. They were bankrupting him.

HAPPY DAYS?

THERE’S a scene from the TV show Happy Days where Richie is about to get beaten up by some toughs.

They’ve got him up against the wall, fists clenched. Yet, just as they’re about to take a swing, they turn around and see the Fonz standing behind them. Frightened, they start patting Richie, pretending to be his friend.

That’s kind of what happened with Sportsbet.

They aggressively dragged Jack and his mum to the Federal Court, fully intending to kick these “losers” out on the street. Yet what Sportsbet didn’t count on was that Jack and his mum turned up with some very powerful Fonzie-like friends (arranged in part by his wonderful not-for-profit financial counsellor, Maria Turnbull). Sportsbet backtracked. Quickly.

Yet here’s the thing: legally, Sportsbet did absolutely nothing wrong.

And in my opinion the reason Sportsbet let Jack and his mum keep their home is that they didn’t want any negative publicity that could close their legislative loophole and put a stop to their predatory behaviour.

Their bet paid off.

Jack’s case happened in 2011 — there have been no changes to the lending loophole.

So what lending loophole are the sports betting companies exploiting?

Well, they purposely don’t charge fees or interest on the credit they spruik to their customers.

Why? Because if they did, they’d be classified as a lender — and then they’d be governed by strict consumer protection laws.

These laws stop banks and finance institutions from lending money to people who can’t afford it (think Jack). They also ban the banks from pushing customers deeper into debt (think Jack, again).

Sneaky huh?

THE HOKEY POKEY

IF you’re a gambling addict you can ban yourself from a pokie venue.

However, sports betting companies are aggressive advertisers, and they’re everywhere: they’re an app on your phone, they’re in your Facebook feed, and they pop up on your computer screen — generally offering new customers up to $1000 of free credits (which sets up, from the start, the behaviour of borrowing and betting).

In that sense they’re no better than a drug dealer who gives a kid a “free” taste of heroin. And the word on the street — at least one gambling counsellor I spoke to — is that they’re the next big thing: “Just you watch. In a few years, sports betting will make the pokies look like a picnic.”

Tread Your Own Path!

Help for problem gamblers is available by phoning the National Gambling Helpline on 1800 858 858, or Financial Counselling Australia on 1800 007 007.

Originally published as Lost in a loophole over betting