Multiple breaches

BetEasy has received fines totaling over AU$50,000 (US$37,604) after it allowed a self-excluded bettor to register for a new account and lose nearly AU$720,000 (US$541,494). The Northern Territory Racing Commission handed out the fine after conducting an investigation into the matter.

The commission discovered that the online betting operator was in violation of two license conditions, as well as possibly breaching a third. BetEasy’s procedures to properly spot problem gambling behavior were also insufficient. Ultimately, BetEasy got fines of AU$26,860 (US$20,201) for both of the two official breaches. The third possible breach has now been referred to the Australian Transaction Reports and Analysis Centre (AUSTRAC).

Circumventing BetEasy’s systems

The gambler in question had been self-excluded from CrownBet, which was the predecessor to BetEasy. Therefore, the gambler was known to BetEasy and its affiliates. An affiliate of the operator named John Dow got in touch with the self-excluded gambler in January 2019 and helped him open an account under his wife’s name. Mr. Dow went on to facilitate this account and to arrange free bets.

identity verification check “satisfied BetEasy that the account holder’s identity was verified.”

While staff at BetEasy saw the following day that the residential address on the new account was the same as the address of the self-excluded gambler, a subsequent identity verification check “satisfied BetEasy that the account holder’s identity was verified.” This was despite some of the questions receiving incorrect answers.

In all, the losses on the account were AU$719,350 (US$541,005). The gambler and his spouse attempted to recover these funds from BetEasy, with the parties coming to a private settlement in April of this year. This was the day before the commission was set to hold a hearing regarding the issue.

The commission’s findings

BetEasy took criticism from the commission for not taking responsibility for the actions of Mr. Dow when it came to the creation of the new account. The report stated: “The commission’s view is that a licensee should accept responsibility for the activities of its affiliate. An unwillingness to do so does not reflect well on a licensee.”

The commission also stated that phone conversations between BetEasy staff and Mr. Dow should have raised some red flags, particularly as Mr. Dow referred to the holder of the account as being a male and also saying that the “husband bets on the account and the husband is a gold VIP.”

BetEasy failed to comply various times with the Code of Practice for Responsible Online Gambling and it did not adhere to its own terms and conditions. The lack of sufficient processes for customer identification and the failure to prevent people from circumventing the operator’s systems are other possible breaches of BetEasy’s license conditions.

As part of the commission’s report, it revealed that it will be taking this investigation into account when it comes time to advise the government of the Northern Territory regarding new gambling legislation. This includes a recommendation to explicitly state in legislation that operators are fully responsible for their affiliates, no matter what the arrangement might be.