On 2 July 2018, sweeping changes to the Betting and Racing Act 1998 (NSW) (NSW Act) will come into effect, imposing greater restrictions on the advertising of inducements to residents of NSW and substantially increasing the penalties for the contravention of the prohibitions relating to gambling advertising in NSW.1
This new regulatory framework in NSW heralds in an era of tighter regulation for gambling operators and affiliates engaging in marketing in Australia.
With these changes imminent, we set out below guidance to assist your business in remaining compliant when advertising gambling services.
Guidelines and Consultation Period
Following the assent of the Liquor and Gaming Legislation Amendment Bill 2018 on 21 March 2018, Liquor & Gaming NSW (LGNSW) circulated for comment a set of draft Guidelines clarifying the effect of the changes to the NSW Act and it’s “compliance approach” to the publication of betting advertising.
LGNSW received submissions from many betting industry stakeholders, including wagering operators and affiliates.
The final Guidelines were published on 19 June 2018. The key takeaways from these Guidelines are outlined below.2
Inducements: disclaimer days are over
The most significant impact of the amendments to the NSW Act relates to the ability of gambling operators to advertise inducements as a customer acquisition strategy.
It has long been the case that the laws of NSW prohibit the publication of advertisements offering an inducement to participate in gambling activity, including any inducement to open a betting account (NSW Inducement Prohibition). This, in itself, remains unchanged.
However, it had been also been the practice that the advertising of inducements would be acceptable provided that NSW residents were expressly excluded through a prominent disclaimer and measures were taken to prevent NSW residents from accepting the offer. This was reflected in the previous guidelines.
The Guidelines make it clear that disclaimers will no longer be sufficient to prevent the publication of inducements from contravening the NSW Inducement Prohibition.
Going forward, it will be an offence to advertise inducements to the world at large where those inducements can be viewed by persons in NSW, irrespective of whether or not the inducement is capable of being accepted by a person in NSW.
That being said, the Guidelines provide limited scope for bookmakers to continue to advertise inducements without falling foul of the new NSW prohibitions. This is discussed in more detail below.
The promotion of inducements will not contravene the NSW Inducement Prohibition where the advertiser (whether a gambling operator or publisher) has taken reasonable steps to prevent the advertisement from being published to NSW residents, including through geo-blocking functions.
The Guidelines also clarify that this exemption extends to all forms of digital media marketing (including websites and social media) and that an operator will not be liable where a person in NSW uses a VPN to mask their location and circumvent the geo-blocking functions put in place by the publisher.
Communication to existing customers
The NSW Act introduces a defence for bookmakers in circumstances where they communicate an offer to existing customers via closed-loop communications, such as behind membership walls on the bookmaker’s website or app.
This defence would also extend to other publishers, such as affiliates, where the publisher can be satisfied that the recipient of the communication holds an account with the bookmaker the subject of the offer.
Affiliates: A one-size-fits-all approach
Despite submissions made by affiliates, the Guidelines fail to fully address the business model of affiliates and reflect a “one size fits all” approach to the regulation of publishers of gambling advertisements in Australia.
The NSW Act and Guidelines clarify that liability will not arise for an affiliate (or publisher) where the gambling advertisement is in the form provided or approved by the gambling operator and where the publisher is not otherwise notified by the Minister that the advertisement may contravene the NSW Act.
Beyond this, however, the Guidelines do not specifically contemplate the full suite of content created and published by affiliates, such as bookmaker reviews and comparisons, or the hosting of forums for public review and discussion.
This means that affiliates will need to have regard to the increased risk that will arise as a result of content which they develop (including any user generated content hosted) which refers to offers being provided by gambling operators. Accordingly, in many cases, business practices will need to be adjusted to avoid falling foul of the NSW Act.
In addition to the matters outlined above, the Guidelines also set out LGNSW’s policy position in relation to:
- racing industry related arrangements;
- the publication of gambling advertisements on other forms of media, including outdoor media, television and radio broadcasts and print; and
- rewards schemes conducted by bookmakers.
The new framework for gambling advertising regulation in NSW will have wide ramifications for the gambling sector and publishers engaging in gambling advertising in NSW, Australia and potentially globally.
If you would like further information or wish to discuss how these legislative changes may affect your business and marketing strategy, please contact any member of the Addisons Media and Gaming Team.
1We touched on these developments in our Focus Paper entitled “The latest wave of gambling regulation: Advertising prohibitions and the expansion of Ministerial powers”.
2The Guidelines can be viewed here.
Liability limited by a scheme approved under Professional Standards Legislation.
© ADDISONS. No part of this document may in any form or by any means be reproduced, stored in a retrieval system or transmitted without prior written consent. This document is for general information only and cannot be relied upon as legal advice.