In September last year, the Federal Court of Australia found that Hillside (Australia New Media) Pty Ltd and its UK service company, Hillside (Shared Services) Ltd (collectively known as Bet365) engaged in misleading and deceptive conduct and making false representations. Bet365’s breach of the Australian Consumer Law (ACL) was brought to the attention of the Australian Competition and Consumer Commission (ACCC) as part of a regular sweep of ‘free’ representations and promotions targeting Australian consumers. This case highlights the risks involved in promoting free services and the importance of refraining from making misleading representations.
Background to Bet365’s Conduct
The ACCC alleged that Bet365’s promotion of “$200 FREE BETS FOR NEW CUSTOMERS”, offered in Australia between 18 March 2013 to 13 January 2014, was misleading and deceptive, and involved false representations of the ‘free’ nature of the offer. The ostensible free offer, in fact, was subject to a number of conditions:
- In order to receive the free bet, customers must first make deposit and then risk that deposit before being entitled to make a free bet;
- Customers must then gamble three times the value of their deposit and bonus within 90 days before being able to withdraw any winnings. For example, gambling their own deposit of $200 and receiving $200 in bets then required the customer to gamble $1200 before actually seeing any money;
- The offer was only available for bets at odds of no less than 1.5, subjecting them to higher risk transactions; and
- The “free” bet was limited by the size of the customer’s first deposit.
Contravention of the Law
Engaging in misleading or deceptive conduct and making false representations is a contravention of sections 18 and 29(1)(b), (i) and (m) of the ACL.
- Section 18 provides that a person must not, in business trading, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.
- Section 29 prohibits a person, in business trading, from making false or misleading representations about goods or services or in connection with a promotion.
The Court must assess the effect of the representations upon a reasonable person in order to conclude whether the offer was indeed misleading or deceptive. In this case, the relevant, reasonable person consists of regular users of online betting services in addition to new users who may not have used such services before.
The assessment of the conduct involved a consideration of whether the terms and conditions were sufficiently and appropriately conveyed to the consumer. While regular users would be aware that offers and promotions are nearly always subject to conditions, the ACCC claimed that the specific conditions were not sufficiently displayed to customers.
There was an asterisk displayed at the end of the offer, but there was no other asterisk or information on the page to which the asterisk in the headline could refer. To find the terms and conditions, the customer would have to pore over the website, as they were so disconnected from the offer. In particular, failing to display prominently all the restrictions and limitations of the offer easily coaxed new users or inexperienced gamblers into signing up to the deceptive offer.
“Free Bets” vs. “Deposit Bonus”
In addition to the above allegation, the ACCC submitted that a subsequent promotional offer on the Bet365 website, of “UP TO $200 DEPOSIT BONUS FOR NEW CUSTOMERS” with the same restrictions, was also a contravention of the ACL. However, the ACCC were unsuccessful in this claim. Why is this any different to the “FREE BETS” offer? The terms and conditions of the “DEPOSIT BONUS” offer were displayed on the opening page and were visible to any customer viewing the offer, discharging any misleading and deceptive conduct.
Bet365’s Terms and Conditions
In response to these allegations, Bet365 went as far as to suggest that regardless of the actions involved, customers could obtain $200 of free bets, meaning that the offer was properly described as a “free bet”. Furthermore, Bet365 blamed the omission of a reference to terms and conditions as a result of a technical error. The Court accepted that this conduct was not intentional but was nonetheless reckless.
As a result of the ACCC challenge to the misconduct of the offer, in January 2014, Bet365 changed the page displayed with the offer to include “See Terms and Conditions below”, which were then set out in full at the bottom of the page. During this time, the Federal Court found no misleading or deceptive conduct in connection with the offer. The contrasting situation emphasises the importance of accessible and prominent terms and conditions.
The Federal Court found that prior to changing the display of the terms and conditions in January 2014, Bet 365’s “FREE BETS” offer involved misleading and deceptive conduct and the making of false representations. A series of complaints received by customers, after signing up to the “FREE BETS” offer, demonstrate the lack of understanding and miscommunication of the offer and its multitude of restrictions and limitations.
The Court has ordered Bet365 to pay penalties of $2.75 million for this unlawful conduct. In addition, the Court ordered Bet365 to send a corrective notice, by email, to all the affected customers.
It may be comforting to know that this offer was not made available to residents of NSW, Victoria, SA and WA due to the prohibition from offering inducements to open a betting account. In NSW, the Racing Administration Regulation 2012 (NSW) Regulation 12 prohibits gambling-related advertising that serves as an inducement to participate in or open a betting account. Nevertheless, it is still important to be aware of these cases to be prepared and aware of the implications that may arise in similar circumstances.
- Despite its overuse in the marketing world, the word “free” is always enticing, which is why it must be adequately qualified by prominently displayed conditions so as not to produce a misunderstanding;
- For the avid Aussie punters out there, be careful not to be drawn into the web of deception of ‘free’ representations and promotions.
- For the betting providers and other service companies, this case should serve as a reminder that:
- Misleading and deceptive conduct is a serious offence;
- Terms and conditions are an integral part of any offer and must be displayed prominently; and
- Australia’s consumer watchdog, the ACCC, is always watching.
If you have any questions on this case or legal issues surrounding the Australian Consumer Law, get in touch with LegalVision’s consumer lawyers on 1300 544 755.
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