Betting companies deny claims they offered illicit drugs and escorts to gamblers

Betting companies have denied explosive claims they offered customers access to illicit drugs and escorts to encourage continued gambling.

The allegations were aired during a Senate inquiry into the federal government's proposed gambling reforms, where Alliance for Gambling Reform chief advocate Reverend Tim Costello spoke about a young man he said received funding for travel, escorts and drugs from Sportsbet and TAB.

The man is now in prison after being charged over the alleged theft of $12.3 million.

Representing Sportsbet, Jules Norton Selzer said the company had found "zero evidence" to support the "deplorable" allegations raised by Reverend Costello and said the company would "gladly" investigate the matter if further information was provided.

TAB also rejected the claims, saying the inducements described "do not in any way form part of TAB's customer offering" and that the company maintains "zero tolerance" for such behaviour.

Former NRL player Luke Bateman appeared before the inquiry on Monday, and said betting company representatives offered to source him illicit drugs while he was struggling with a severe gambling addiction.

Mr Bateman did not identify which companies he was referring to.

Speaking generally about allegations levelled at betting companies at the inquiry, Responsible Wagering Australia chief executive Kai Cantwell described the allegations as "egregious" but said the wagering industry "strongly refutes" the claims.

"If these claims are true, we strongly recommend complaints are levelled with the individual operators as well as law enforcement and regulators, so that clearly illegal behaviours can be properly investigated," he said.

In a fiery exchange with Greens Senator Sarah Hanson-Young on Tuesday, Sportsbet insisted that "most" customers gambled "responsibly and recreationally".

Senator Hanson-Young warned the company was on "very thin ice" with the Australian public.

"Your industry only gets to survive on the social licence you have," she said.

Children appear in online gambling ad

Senator David Pocock showed the inquiry screenshots from an online ad by wagering company Bet365 which included young children dressed in branded T-shirts competing in a race.

The ad has since disappeared from Racing.com.

He also raised an example of gambling ads playing between Disney songs on a Spotify playlist.

Mr Norton Selzer said it was "absolutely not" the company's intention to advertise to children, and said it had wound back its advertising on free-to-air TV to reduce exposure.

He also defended the Spotify ad, saying an adult had curated the playlist.

"This was an adult on an adult playlist," he said.

Senator Pocock accused Mr Norton Selzer of "BS", asking if the company wanted "every seven-year-old to have their own Spotify account."

Mr Cantwell said concerns about underage exposure to gambling ads were legitimate.

"I'm not going to shy away from the fact that you have presented me with children wearing gambling products," he said.

"Has the industry always got everything right? No. We are presented with cases where we may have got things wrong."

The proposed legislation does not include a total ban on advertisements.

There are currently partial restrictions on gambling advertising, and the proposed bill would go further in stopping children's exposure to branding and promotions.

It is not illegal for gambling ads to appear in the ways described by Senator Pocock.

Industry claims VIPs not chosen for high spend

TAB spokesperson Julian Whealing said the company had 800,000 active customers, including about 400 they considered VIP.

He said the operator had stringent "know your customer" requirements in an effort to avoid criminals using their services.

"We do want to help our customers where we can," he said.

Neither Sportsbet nor TAB was able to say how many account managers serviced their VIP customers.

Sportsbet said it provided "tailored offers" to some customers, with Mr Norton Selzer saying those customers were selected based on "engagement" rather than betting volume.

When pressed on what constituted sufficient engagement, he said it could relate to "a range of things", including customers enjoying "different products".

"It is not necessarily about volume," he said.

Mr Norton Selzer also defended Sportsbet's use of inducements, which he described as "promotions" that rewarded "customer loyalty".

"It's about trying to ultimately retain our customers," he said.

Advocates are pushing for a total ban on inducements, which was a key finding of the 2023 You Win Some, You Lose More report by late Labor MP Peta Murphy, and is not included in the proposed legislation.

Regulator can't say what a 'notable person' is

The communications watchdog also appeared before the inquiry where officials struggled to answer questions about how the legislation would be implemented if it passed parliament.

A tense exchange unfolded between Senator Hanson-Young and the Australian Communications and Media Authority (ACMA) over the bill's "notable person" provision, which is intended to regulate gambling promotion by public figures and influencers.

Senator Hanson-Young repeatedly questioned the regulator about who would fall within the definition.

A representative of ACMA said it had "not formed the precise definition" but was considering case studies.

Sportsbet was also critical of the lack of clarity, claiming that "anyone with an Instagram account" could be considered a notable person included in the current draft.

The regulator confirmed it had not received additional funding to enforce the proposed advertising regime.

Punters may turn to illegal overseas markets

Sportsbet, TAB and Responsible Wagering Australia told the inquiry they were broadly supportive of the government's changes, but warned other proposals, including a complete gambling ad ban, would accelerate the movement of punters to illegal offshore gambling streams.

Mr Norton Selzer described the proposed legislation as "substantial" and warned additional advertising bans would create "significant funding issues" for sport, racing and broadcasting while having a "disproportionate impact relative to the policy objectives of the bill".

Mr Cantwell said licensed online wagering companies already operated in one of the "most highly regulated gambling markets in the world" and contributed $6 billion in economic activity each year.

"We are not and have never been anti-reform," he said.

"Seventy per cent of Australians enjoy a punt, and the key question is where they gamble.

"If the regulated market becomes less visible, harder to access or less competitive, consumers don't stop gambling … the evidence proves that they will move to illegal offshore operators."