South Australia is leading the fight against the dirty tactics used by online betting companies.

Under new reforms proposed by SA’s Independent Gambling Authority (IGA), online betting agencies would be banned from offering unsolicited credit to gamblers.

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The authority is proposing several other changes to the SA Gambling Code of Practice, including:

• Credit only to be offered after a thorough due diligence process;
• A requirement that gambling providers process withdrawals from gaming accounts immediately;
• Spotter’s fees to be disclosed.

Operators who breached the code would face fines of up to $100,000.

SA Business Services and Consumers Minister Gail Gago said the changes were prompted by questionable practices used by sports betting agencies outlined in an August report by Financial Counselling Australia (FCA), as reported by The New Daily.

Ms Gago said the current practices were “unscrupulous”. Photo: Twitter

“In some cases, account holders are offering credit ranging from $200 to the tens of thousands [of dollars] with no consideration given to the person’s circumstances, their capacity to repay or their wellbeing,” Ms Gago said.

She said the report had revealed betting operators were offering credit to a person already in arrears “and things like making it extremely difficult to withdraw funds from their accounts”.

“The changes to the code will stop these unscrupulous practices,” Ms Gago said.

FCA policy manager Lauren Levin said the organisation welcomed the proposed changes and that SA was showing leadership, urging other states and territories to follow their lead.

She said the effects on gambling addicts by ruthless practices used by legal online sports betting companies licensed in Australia, was harrowing.

“The Australian sports betting companies market credit as a convenience, but it has the status of a legally enforceable debt, and typically has to be paid back within seven days,” she said.

“Financial counsellors have seen examples of brutal debt collection practices. The banks are not allowed to offer unsolicited credit – all part of the responsible lending legislation that came in a few years ago. Credit and gambling are not good bedfellows.

“Using credit to bet is a fast track to serious debt problems, whether it is provided by the sports betting company or on a credit card, or a high interest payday loan. Financial counsellors see people going bankrupt because of gambling debts.”

The IGA has given gambling providers 28 days to respond to the proposed changes.

If successful, the new rules could come into effect at the start of 2016

Gambling advertising ‘completely out of hand’

Ms Levin said the “elephant in the room” was gambling advertising.

Close to $1 billion is lost on legal sports betting sites in Australia each year. Photo: Shutterstock

“Many Australians believe gambling advertising has got completely out of hand,” she said.

“This is something that the Federal Government also needs to address.”

As reported by The New Daily in September, the Federal Government’s review of the Interactive Gaming Act (IGA) was stripped of all references to gambling advertising from its planned ­review of online wagering.

The decision followed a backlash by commercial television operators, who were misinformed that a ban of all gambling ads was being considered.

FCA’s report also called on the Federal Government to act to ban credit for gambling in all of its forms, including credit cards and payday loans.

Ms Levin said this would deliver on the Liberal Party’s commitment from the last election that stated: “Responsible gambling is all about people gambling within their means. Extending lines of credit to gamblers runs contrary to this principle and the Coalition will legislate to prohibit the practice”.

Anti-gambling campaigner, SA independent Senator Nick Xenophon, launched FCA’s report in Parliament in August.

‘Grooming of wagering account holders is quite pernicious’

IGA director Robert Chappell said the proposed reforms were a balanced response to the findings in FCA’s report.

“The practices that have been documented are very seductive and some of the things that have been revealed in the report and other forums … suggest the courting and the grooming of wagering account holders is quite pernicious,” Mr Chappell said.

“This is very much a hidden problem. People don’t like talking about it.”

SA outlawed the advertising of live betting odds at sporting venues in 2013 and on TV and radio during sporting broadcasts.

Similar rules were later adopted by the commercial TV industry.

There are currently 19 authorised online betting operators in SA and 74,000 South Australians with online betting accounts.

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