Sportsbet Pty Ltd (Sportsbet) has paid a record infringement notice of just over $2.5 million and has committed to refund around $1.2 million to customers after an investigation found that Sportsbet sent unlawful spam to consumers.
The Australian Communications and Media Authority (ACMA) found that Sportsbet breached the Spam Act 2003 (Cth) (Spam Act) by:
- sending, or causing to be sent, over 150,000 marketing text messages and emails to over 37,000 consumers who had tried to unsubscribe; and
- sending over 3,000 text messages without a functional unsubscribe function.
In addition to paying the largest penalty issued by ACMA for breaches of spam laws, Sportsbet must adhere to a comprehensive three-year court-enforceable undertaking. This undertaking requires Sportsbet to:
- appoint an independent arbiter to oversee a compensation program to refund customers who lost money on bets associated with the spam messages, which is expected to total around $1.2 million;
- appoint an independent consultant to review and identify any deficiencies in its procedures, policies, training and systems; and
- implement recommendations from the consultant’s report and provide training to its personnel to ensure compliance with the Spam Act.
ACMA’s investigation was prompted by complaints from consumers who were experiencing gambling-related problems and were unable to stop receiving Sportsbet’s promotions. Sportsbet’s messages included alerts about upcoming races and incentives to place bets. ACMA’s Chair Nerida O’Loughlin noted that Sportsbet’s failure had ‘real potential to contribute to financial and emotional harm’ to affected individuals.
The Spam Act regulates direct marketing messages, otherwise known as ‘commercial electronic messages’ in the Act, which includes offers to provide goods and services, promotions or advertisements. This is not limited to SMS and email, and potentially extends to messages sent via social media and other online platforms. The Spam Act prohibits sending direct marketing messages:
- without the (express or inferred) consent of the recipient, subject to limited exceptions such as political messages;
- without identifying the sender, including the sender’s name and contact details; and
- without a functional unsubscribe facility, which honours unsubscribe requests within 5 business days.
Sportsbet failed to demonstrate that it had the consent of recipients to send marketing messages, nor could it demonstrate that its messages contained a functional unsubscribe mechanism. ACMA’s investigation indicates that Sportsbet’s failure to action unsubscribe requests was largely due to a manual unsubscribe process. The record-breaking fine reflects the sheer volume of contraventions in this case.
This case serves as a reminder to all Australian businesses of the potential costs of gambling when it comes to legal compliance. HWL Ebsworth Lawyers can work with you to review your direct marketing systems and processes for compliance with the Spam Act and related legislation regarding the Do Not Call Register and privacy.
This article was written by Nicholas Pullen, Partner, Scott La Rocca, Senior Associate, and Philip Huynh, Solicitor.
