In a significant enforcement action that underscores the strict regulatory landscape of New South Wales (NSW), PlayUp Interactive, a major player in the online gambling industry operating under the trading name Draftstars, has been slapped with a substantial fine of AU$586,000 (approximately $394,389 USD). The fine, imposed by the Downing Centre Local Court on August 12, 2024, represents one of the largest penalties ever levied in the state for breaches of gambling advertising laws.
Case Background: Illegal Advertisements and Regulatory Scrutiny
The penalty follows an intensive investigation by Liquor & Gaming NSW, which identified 33 instances of illegal advertisements on PlayUp Interactive’s website. These advertisements were found to contain inducements to participate in gambling activities, a clear violation of NSW law. Specifically, the ads offered incentives that encouraged individuals to gamble more frequently and to open new betting accounts—actions that are explicitly prohibited under current regulations.
Liquor & Gaming NSW’s investigation culminated in the court’s decision to hold PlayUp Interactive accountable for these breaches, reflecting the state’s zero-tolerance policy toward illegal gambling advertising. The decision not only highlights the company’s failure to comply with established laws but also sends a strong message to the entire industry about the consequences of such violations.
Understanding the Legal Framework: NSW’s Stringent Gambling Advertising Laws
NSW has some of the most stringent regulations in Australia when it comes to gambling advertising. Under these laws, any advertisement that offers inducements to participate in gambling, such as bonus bets or incentives to open new betting accounts, is illegal unless it is targeted only at existing account holders. These restrictions are designed to protect the public from the risks associated with gambling, particularly in promoting responsible gambling practices.
The law specifically prohibits advertisements that offer incentives to open a new betting account, to refer others to open accounts, or to keep an account open. Companies that are found guilty of publishing prohibited gambling advertisements can face severe penalties. For corporations, the maximum fine can reach AU$110,000 per offense, while individuals can be fined up to AU$11,000.
In the case of PlayUp Interactive, the scale of the fine reflects the seriousness of the offenses, with each of the 33 illegal advertisements contributing to the total penalty.
Authorities Speak Out: Emphasizing Compliance and Enforcement
Dimitri Argeres, Director of Compliance & Enforcement at Liquor & Gaming NSW, was vocal about the importance of compliance with these laws. In his statement following the court’s decision, Argeres highlighted that the advertising of gambling products must be conducted within the strict confines of the law, without resorting to illegal inducements.
“NSW bans the advertisement of any offer of an inducement to participate in a gambling activity, including an inducement to bet more frequently, to persons who do not hold a betting account with the betting operator,” Argeres stated. He further emphasized that it is the responsibility of the betting service provider to ensure that no prohibited gambling advertisements are published or communicated within NSW.
This case, according to Argeres, is a clear demonstration of the government’s commitment to enforcing these laws and protecting the community from the potential harms of gambling. The substantial fine imposed on PlayUp Interactive serves as a stark reminder to all operators that NSW takes compliance very seriously.
Implications for the Industry: A Warning to Betting Operators
The fine imposed on PlayUp Interactive is not just a punitive measure; it is also a clear warning to the entire gambling industry operating within NSW. The state’s regulatory body has shown that it is willing and able to pursue significant penalties against companies that flout the law.
This case could set a precedent for future enforcement actions, particularly as the regulatory environment continues to evolve. With gambling advertising coming under increasing scrutiny, operators must ensure that their marketing practices are fully compliant with the law. Failure to do so could result in similarly severe penalties, or even harsher ones, depending on the nature and extent of the violations.
The case of PlayUp Interactive is particularly noteworthy when compared to other recent enforcement actions. For example, earlier this year, the former licensee of the St George Hotel in Belmore was fined for operating gaming machines outside of permitted hours. This case, while different in nature, further illustrates the proactive stance taken by NSW regulators in ensuring compliance across the gambling industry.
The AU$586,000 fine imposed on PlayUp Interactive is a landmark in the regulation of gambling advertising in NSW. It underscores the critical importance of adhering to legal requirements in an industry that is highly regulated and closely monitored. As Liquor & Gaming NSW continues to enforce these laws rigorously, it is clear that there is little tolerance for any breaches, particularly those that have the potential to harm the public by encouraging irresponsible gambling behavior.
For betting operators, this case is a clear signal that compliance must be a top priority. The financial and reputational risks associated with breaching NSW’s gambling advertising laws are simply too great to ignore. Moving forward, companies operating in this space must ensure that their advertising practices are not only effective but also fully compliant with the law to avoid facing similar consequences.
The fine against PlayUp Interactive serves as both a punishment and a deterrent, reinforcing the message that NSW will continue to uphold its stringent gambling laws to protect the public and maintain the integrity of the industry.