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MARKETING ETHICS

Big penalties for business that broke consumer spamming laws

By our News Team | 2022

Online betting business which sent out 150 000 unwanted marketing messages is ordered pay US$2,6-million and review all operating procedures.

An online sports betting business in Australia that spammed consumers by sending them more than 150 000 unwanted emails and text messages has received a large penalty and must refund customers.

In all, the company called Sportsbet will pay AUD$3.7-million (US$2,6-million), comprising the largest penalty of its kind ever issued in the country, plus refunds to people who placed bets after receiving the marketing messages that they had tried, but failed, to unsubscribe from. 

Around 37 000 consumers received the spam messages, which offered either incentives to gamble or alerts about upcoming horse races, the Australian Communications and Media Authority (ACMA) said in a press statement. In addition, Sportsbet continued to send out the spam messages even after the Authority had asked it not to do so.

Marketing Ethics

Image by Besteonlinecasinos from Pixabay

Australia has strict laws protecting members of the public from marketing excesses by businesses, including spamming and failing to allow people to unsubscribe from marketing messaging.

ACMA Chair, Nerida O’Loughlin, said the scale and duration of Sportsbet’s conduct was deeply concerning, particularly given the potential harms involved with gambling.

Messages were sent to people with gambling problems

“We received complaints from people stating they were experiencing gambling-related problems and were trying to manage the issue by unsubscribing from Sportsbet’s promotions,” O’Loughlin stated.

“Sportsbet’s failures in this matter had the real potential to contribute to financial and emotional harm to these people and their families.”

In addition to the largest penalty given by the ACMA for breaches of spam laws, the ACMA has accepted a comprehensive three-year court-enforceable undertaking from Sportsbet. The undertaking commits it to appoint an independent arbiter to oversee a compensation program to refund customers who lost money on bets made that were associated with the spam.

The undertaking will also require Sportsbet to appoint an independent consultant to review its procedures, policies, training and systems, and implement recommendations from the audit.

O’Loughlin said she was disappointed Sportsbet did not act as soon as they were aware of the problem.

“The ACMA contacted Sportsbet on several occasions leading up to the investigation to let the gambling provider know it may have compliance problems and it failed to take adequate action,” she noted.

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