Archive for October, 2018

It’s Spring carnival again and the betting agencies are lining up and throwing offers at punters left, right and centre.  It all sounds great with free betting and getting paid the win for finishing second and bonus bets and best tote odds etc.  Even with all that, most punters will lose money on the horses this Spring, and in worst case scenarios for punters, they will be on the path to gambling addiction – which is the best case scenario for the betting agencies.  This article has some tales of woe, plus the facts about Australia’s gambling habits.

‘Three months, half a million bucks’: Paying the price for a punt

Nick Toscano

27th October 2018

In the front seat of his parked car, a middle-aged man sits dressed in his running clothes; collar unzipped, sunglasses above his forehead. It’s three o’clock in the afternoon and the middle of a drought in this part of Australia, so the air outside is warm and sunlight beams in through the rear windscreen glass.

Shuffling in his seat, Peter* begins explaining why he has to have this conversation here in his car instead of at home. For a moment, he can’t help but laugh. But the situation is far from funny, and his laughter trails off.

In the space of three months, Peter says he’s lost half a million dollars by gambling online. Every night, with multiple betting accounts on his smartphone, he’d been laying down huge sums on horse races – races in Australia, or Hong Kong, or wherever there was a race on. When there were no horse races left, he would bet on the greyhounds. If there were chickens running around, he’d probably have bet on them too. Having lost all control, he swiftly lost everything. And still, to this day, no one in his family knows about it.

“It was an absolute frenzy – bet, bet, bet, late into the night, early into the morning,” he recalls. “Three months, half a million bucks … it’s all gone now.”

Spring in their step

Springtime has arrived in Australia, and the spring racing season is in full swing. For the nation’s betting industry, this is the busiest period on the calendar. At pub terminals, at race tracks, on computers, tablets and mobile apps, hundreds of thousands of people will place a wager, just like they do every year. Over eight major race days, Australia’s biggest gambling company, ASX-listed Tabcorp, expects punters to turn over more than $1 billion.

The overwhelming majority of bets will be placed by ordinary people, betting moderately, betting for a bit of fun. The average amount is less than $20. For others, however, their betting is not so innocuous. According to recent research, an estimated 200,000 Australians are considered “problem gamblers”, that is, people who continue to gamble despite the dire impact it may be having on their lives.

Although Australians lose far less money betting on sport ($1.06 billion a year) and racing ($3.3 billion) than they do on pokies or casino games ($17 billion combined), the smartphone era has propelled online wagering into the fastest-growing form of gambling nationally – rocketing more than 15 per cent a year – a statistic that has some policymakers worried. The 24/7 availability of online gambling and the idea that digital transactions can seem “less real” have given rise to very real concerns that the danger of developing problematic gambling habits may be greater online.

“The majority of gambling in Australia happens in relatively controlled social environments like clubs, pubs, casinos and race tracks,” said Scott Morrison in 2015, when he was social services minister. “Online or interactive gambling creates vulnerabilities because it doesn’t share such limited controls and protections.”

Leading into Melbourne Cup week, with online bookmakers in fierce competition for market share, it is with these worries in mind that the rope is about to get tighter around the global online gambling giants here and the services they provide.

After three years and a series of delays, state and federal politicians are finalising a suite of new standards for the industry, aimed at tackling problem gambling risks online and beefing up protections for consumers.

Sportsbet, BetEasy, Ladbrokes, Bet365, Betfair and Unibet dispute the notion that problem gambling risks are greater online, arguing their technology provides punters tools to limit spending in a way that physical betting terminals cannot.

But they have been widely accepting of a series of concessions and, through their industry group Responsible Wagering Australia, have proactively helped government develop many of the incoming online gambling reforms, chief among them being a “national self-exclusion scheme” for people trying to quit gambling.

The first of its kind in Australia, the scheme will allow gamblers to ban themselves across state lines and across all betting sites at once on smartphones, computers and tablets. Also among the soon-to-be-introduced measures are a voluntary, opt-out pre-commitment system for punters to set their own limits, and a nationwide ban on bookies offering “inducements” to encourage people to open accounts.

Other figures on the frontline of the issue – such as problem gamblers themselves and the financial counsellors who assist them – are supportive of the new rules but argue the package doesn’t go far enough, fearing it falls short of what is truly needed to protect the vulnerable. One of the biggest omissions, they say, is that there is lack of enforceable requirements like in the United Kingdom for companies to take steps such as making checks on big-spending customers, monitoring their deposits and making sure they are safe.

“There is no clear duty on the company to take concrete steps to ensure their services are provided responsibly,” says Lauren Levin, the policy director of Financial Counselling Australia. “We are about five years behind the UK.”

‘It was just manic’

Just before his gambling spiralled out of control, Peter was in his 50s, recently divorced and had received a large payout following an accident. “I probably want to dodge a few points here,” he says, so as to not reveal his identity. “But when I got my payout, I was bored and lonely and started punting.”

Drinking heavily and taking powerful pain medication, he opened accounts with multiple online bookmakers including two of the biggest, Ladbrokes and CrownBet. His bets ranged from $10 or $20 to many thousands. In several instances, he wagered as much as $20,000 per race. Most nights, his account records show, he was turning over massive amounts of money, like clockwork, every couple of minutes.

“It was just manic,” he says. “I actually don’t remember most of it.”

After Peter began posting serious losses, some of the bookmakers’ software identified his erratic gambling patterns and cut him off. Others, however, did not, instead making him a “VIP customer” – rewarding his big spending with free bets and offers of tickets to sporting events.

“They were relentless, they’d do anything to keep you going … to see the money keep flowing in,” he says. “The only VIP I was to them was a ‘very important profit centre’.”

Every morning, he rolled out of his bed and reached for his mobile in fear, unable to remember what happened the night before. One morning, he saw $75,000 sitting in one of his betting accounts, down from $150,000. Although Peter has now stopped gambling, and self-excluded from the sites he once used, there is a familiar feeling of dread that still greets him daily.

“I literally wake up with heart palpitations every morning,” he says.

The most important change he believes is necessary in the current political push to stem gambling harm is a providing a pre-commitment scheme that is truly binding, not just for online wagering, but for all kinds of gambling. “Very few people can afford to lose $50,000 to $100,000 a day,” he says.

The new house where Jack* lives is nothing like his old one. Small and drab, it’s sparsely furnished and situated on a busy main road, the blare of traffic audible from inside. He appears from his kitchen holding a cup of tea and a tray of biscuits and apologises for the lack of space. A large window looks out to his driveway, where there is a disused car sitting idle that he can’t afford to repair. It’s cold inside. Jack is wearing a woolen jumper and loose blue jeans. His hair is white and cropped, his eyebrows thick and dark. He is aged is in his early 50s, but looks older. A lot has changed in the past 12 months.

“I’m not the same person I was, that’s for sure,” says Jack. “If I had lived here in this house three years ago, I’d have been terribly embarrassed.”

Jack was never a stranger to the punt. He would regularly stop at the TAB on the drive home from work, to put down $20 on whatever horse race was on.

When he lost his job of 21 years, and found himself with a large redundancy payout and hours to spare, things took a turn. His depression and anxiety worsened. Online gambling filled a void.

“When I sit here now with you, to me it just sounds totally insane,” he says. “I can’t even begin to think what sort of frame of mind I was in when I was sitting there with antidepressants, sleeping tablets, you know, a couple of cans of beer and $170,000 sitting in an account that I could just keep pumping into an online bookmaker in blocks of $10,000 and $20,000 at 2 or 3 o’clock in the morning, on races on the other side of the planet somewhere.”

Bottom of a pit

Over seven days, betting records show, Jack lost $125,000. Much like Peter’s experience, each day began in the grip of anxiety. “What the hell did I do last night?” he would ask himself. “That was the start of your day … waking up feeling like you’re at the bottom of a pit.”

Jack hates thinking about what he’s done, and all the money he’s lost – the money he should have been using to re-establish himself post-redundancy.

Although he unsuccessfully took his case to the regulator in the Northern Territory, the jurisdiction where most online bookmakers hold their licences, Jack blames himself mostly. It was, after all, his decision to gamble. “I got online and gambled it away,” he says, “but I think these bigger companies, too, have got some blame. They, and the government, should have some sort of safeguards to stop people like me from gambling erratically.”

Two months ago, when Scott Morrison replaced Malcolm Turnbull as prime minister, he overhauled the front bench. His appointment to the social services ministry – the role overseeing the new online wagering protections, the National Consumer Protection Framework – was Paul Fletcher, a former senior executive at Optus. Fletcher is the third minister to hold the portfolio in the past 12 months, prompting concerns that the momentum behind the online gambling legislation may be waning. But, speaking publicly on the topic for the first time as minister, Fletcher has moved to assure stakeholders that the package is in the “final stages” of agreements by all governments, and anticipates it it will be “announced shortly”.

‘Self-exclusion’ push

“The framework’s 10 measures will deliver strong, nationally consistent minimum protections for Australian using interactive wagering services,” he says. “All governments have worked extensively with industry, community sector organisations, academia and individuals who have experienced gambling harm to design the framework’s measures to ensure that the online gambling standards are raised nationally.”

Gambling-reform campaigners are urging the government to prioritise the framework before the federal election, particularly the national self-exclusion scheme, which they say is a “no-brainer”.

But some are already making the case for tougher reforms such as a national regulator as opposed to Australia’s patchwork state-based regulators, stricter rules around “bonus bet” offers, and greater onus on bookies to identify and act on potentially harmful betting behaviour. In the UK, they say, companies are legally required to gain a holistic picture of the source of wagering funds and critically assess a customer’s financial capacity, or face fines running into millions of pounds.

“The Brits are leaving us for dead on consumer protection for gamblers, with a decent national regulator, a raft of recent reform and more than $30 million worth of fines over the past two years,” says Susan Rennie, of the Alliance for Gambling Reform.

Financial Counselling Australia agrees, saying the global bookmakers are forced to comply with far tougher rules in the UK than in their Australian businesses.

“Gambling companies already have software to identify changes in gambling patterns,” says Levin. “The problem is that the problem gambler is also their cash cow, so there is a reluctance to do what they should do – intervene.”

The major online bookmakers reject this claim, stressing that they “don’t want to take a cent” from problem gamblers. Aside from social responsibility obligations, industry insiders insist it is not in their commercial interests for someone to lose heavily in a short period then never bet with them again. They would rather customers bet moderately, within their means and on an ongoing basis. As one insider puts it: “Smaller bets lead to more stable outcomes and more predictable margins.”

At the height of a public and political backlash in 2016, online wagering companies formed the lobby group Responsible Wagering Australia to lift standards in the industry and restore its social licence.

The group’s director, former Labor senator Stephen Conroy, says its members have been among the leading advocates for the new consumer-protection reforms.

“Ultimately, millions of Australians enjoy having a punt and do so responsibly,” says Conroy. “What is important is to ensure there are effective tools available to assist people to continue wagering in a responsible way as well as effective permanent self-exclusion for those that have serious gambling problems.”

Tabcorp, which runs retail and online wagering services, has also supported the incoming framework, and says it has “long argued for a consistent approach” to gambling regulation. “We believe these changes will bring about a more balanced and responsible way in which betting is promoted and offered,” a spokesman said.

A few years ago, Gary* sustained an injury. A bad one. He was put under the knife in eight separate surgeries. It was quickly decided he wouldn’t return to his job full-time, but would eventually return part-time. “I haven’t worked a day since,” he says. “I haven’t been able to go back.”

As a younger man, Gary worked at a racecourse, and even had his wedding there. He had long been surrounded by horse racing and gambling. “But it had certainly never taken the toll or taken me to the places that I went to two years ago,” he says.

“When I was home after those surgeries and it became available on my phone, it was almost like Christmas had come … there were so many options, so many betting agencies.”

With two of his betting accounts, he decided to set limits on how much he could deposit, to make sure he “didn’t go overboard”. But with the third– Tabcorp’s now-defunct Luxbet – he had no limit in place. Instead, he requested a $1000 overdraft facility.

“There were some periods there where I was on some very serious medication, and I’d go 24 hours straight, I wouldn’t stop, the money would just keep going in – deposit, deposit deposit,” he recalls. Over several months, he lost about $130,000 “There was never any action, any intervention, to stop me.

“I’m not blaming anybody, I know that was my responsibility,” he says, “but it’s the way they allowed me to do it without any oversight in anyway.”

The Morrison government says the reforms will be “progressively” rolled out within 18 months. It will be too late for this Melbourne Cup, but some hope the national self-exclusion register, could be in force in time for next year’s.

“In spring racing season 2019, Australians will be expecting to see the sails of the Sydney Opera House emblazoned with graphics promoting the new online gambling self-exclusion register,” says Levin. “Now who do we call for publicity and endorsement? The PM, Alan Jones, or both?

* Names have been changed

https://www.theage.com.au/business/companies/three-months-half-a-million-bucks-paying-the-price-for-a-punt-20181026-p50c5u.html

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