Charity to benefit as Luxbet slips up

A SUBSIDIARY of Tabcorp has admitted offering illegal rewards to punters as an inducement to bet on the 2010 Australian Open tennis championships.

By InvestSMART · 3 Dec 2010

By InvestSMART ·
3 Dec 2010

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A SUBSIDIARY of Tabcorp has admitted offering illegal rewards to punters as an inducement to bet on the 2010 Australian Open tennis championships.

Luxbet Pty Ltd offered prospective clients "more favourable odds" on Roger Federer and Serena Williams winning the singles titles.

The prosecution of the company, wholly owned by Tabcorp, is the first under a Victorian Commission for Gambling Regulation law. Similar charges against three other bookmaker firms Sportsbet, International All Sports Ltd and Eskander's Betstar Pty Ltd also have been issued.

Prosecutor Alex Fitzpatrick yesterday told Melbourne Magistrates Court that new Luxbet customers were required to open an account with a minimum of $100 and to place up to $50 to receive "bonus" winnings.

Luxbet yesterday pleaded guilty to a charge of offering an inducement as a reward to open a betting account.

Defence barrister Andrew Meagher said Tabcorp had its advertising vetted by compliance and legal teams. He said after hearing nothing back from the commission over a similar advertising issue, Tabcorp mistakenly assumed its promotion did not breach regulations.

"They now take a different view of interpreting the regulations," he said, and urged magistrate Elizabeth Lambden to accept it was not a deliberate breach.

The company did not want to "cause a fight" over the charge, had admitted its guilt and "now we just want to get on with our business".

Mr Meagher asked Ms Lambden to order Luxbet, which with Tabcorp runs a "bet care" program, to donate money to Mission Australia.

Ms Lambden put Luxbet on a 12-month undertaking, without conviction, to be of good behaviour and ordered it to make a $1200 donation and pay costs.

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Frequently Asked Questions about this Article…

What did Luxbet (a Tabcorp subsidiary) admit to in the 2010 Australian Open promotion?

Luxbet Pty Ltd admitted it offered illegal rewards as an inducement to bet during the 2010 Australian Open. The promotion included 'more favourable odds' on Roger Federer and Serena Williams, and required new customers to open an account with a minimum of $100 and place up to $50 to receive 'bonus' winnings.

What was the legal outcome and penalty for Luxbet in the Melbourne Magistrates Court?

Luxbet pleaded guilty to offering an inducement as a reward to open a betting account. The magistrate placed the company on a 12-month undertaking without conviction for good behaviour, ordered a $1,200 donation and required Luxbet to pay court costs.

Which regulator prosecuted the case and why is it significant for investors?

The prosecution was brought under a Victorian Commission for Gambling Regulation law. It is significant because the Luxbet case was the first prosecution under that law, signalling active regulatory enforcement in the Victorian gambling sector.

Are other bookmakers facing similar charges under the gambling regulator?

Yes. Similar charges have been issued against three other bookmaker firms: Sportsbet, International All Sports Ltd, and Eskander's Betstar Pty Ltd, according to the article.

How did Tabcorp respond to the allegation that Luxbet's promotion breached gambling advertising rules?

Tabcorp's defence, led by barrister Andrew Meagher, said the promotion had been vetted by compliance and legal teams. He told the court that after hearing nothing back from the commission on a similar advertising issue, Tabcorp mistakenly assumed the promotion did not breach regulations and argued the breach was not deliberate.

Did Luxbet or Tabcorp have any responsible gambling initiatives mentioned in the case?

Yes. The article notes that Luxbet, together with Tabcorp, runs a 'bet care' program, which was mentioned as part of the company's response in court.

Was Luxbet ordered to make a charitable donation as part of the court outcome?

Yes. The court ordered Luxbet to make a $1,200 donation. Defence counsel had asked the magistrate to order a donation to Mission Australia, and the court also required the company to pay legal costs.

What should everyday investors watch regarding this case and gambling industry regulation?

Investors should monitor regulatory enforcement and legal outcomes for gambling firms, especially after this first prosecution under the Victorian Commission for Gambling Regulation law and similar charges against other bookmakers. Keep an eye on company compliance practices, official rulings, and any statements from firms like Tabcorp, as these can affect reputation and regulatory risk.