Regulator Reviews Gambling Company Emails on Inactive Accounts

The gambling regulator is examining emails sent to dormant customers that do not inform users of their legal right to withdraw balances through the BetStop service instead of paying fees after 18 months of inactivity. The Australian Communications and Media Authority confirmed it is reviewing whether the emails from the company behind Ladbrokes and Neds breached rules that require betting companies to promote BetStop.

BetStop is a federal service that allows people to close all their gambling accounts, receive refunds of any remaining balances, and prevent new accounts from being opened in their name. The company, part of a British gambling group valued at $6 billion, sends the emails to customers inactive for 18 months.

The messages state that an account will be charged a $5 monthly fee, or the remaining balance if less than $5, unless the customer places a bet before a specified date. The emails do not mention BetStop or the option to have funds returned without further wagering.

The company requires that all deposited funds be placed on a bet before any withdrawal is permitted if a customer has not used the BetStop process.

The review comes days after the company avoided a fine despite being found to have breached laws protecting problem gamblers more than 500 times. The regulator's investigation exceeded the legal window for issuing an infringement penalty. Under BetStop laws, wagering companies registered in Australia must close accounts and return balances for any customer who joins the program.

They must also block those individuals from opening new accounts. Companies are required to inform customers about BetStop in electronic messages that promote or advertise gambling, including activity statements. Whether the inactivity emails qualify as such messages is expected to be a central question in the regulator's inquiries.

The regulator can issue infringement penalties of up to $59,400 per breach or seek civil penalties of up to $12.375 million per day through court action. After being shown the emails, the regulator said it would seek further information from the company about how it classifies the inactivity messages and meets its legislative obligations to promote BetStop.

The gambling industry faces separate issues related to money laundering, in which criminals sometimes deposit illicit funds into betting accounts and withdraw them after placing wagers to make the money appear legitimate. Australia's anti-money laundering laws do not require funds to be wagered before withdrawal.

A gambling policy advocate said the inactivity fee approach could encourage people who had stopped betting to place wagers again rather than close accounts or use BetStop. An independent senator criticized the lack of a fine in the company's earlier breaches and raised concerns about the inactivity email practices.

The company declined to comment on the matter.