Mandatory code of practice for sports bookmakers: deferred settlement facilities
Northern Territory Licensed Sports Bookmakers are wagering service providers who offer online and telephone wagering on thoroughbred, harness and greyhound racing, sporting events and certain other approved events. They do not offer online gaming, poker machines, casino table games, bingo or keno.
Sports bookmakers have a strong commitment to promoting responsible gambling and recognise the need to respond to community concerns.
This Code of Practice (Code), for the provision of deferred settlement facilities (DSF), is a licence condition for all Sports Bookmakers licensed in the Northern Territory.
The Code provides a minimum industry standard in relation to the provision of the DSF to ensure a prudent and consistent approach is adopted by all Sports Bookmakers and ensuring consumer protection and harm minimisation measures are strengthened.
The Code’s parameters and minimum industry standards will ensure the benefits are maintained for approved customers to use a DSF as a convenient funding option for managing their wagering account whilst addressing community concerns and mitigating the risk of harm to others.
The minimum industry standards, as detailed in this Code, clearly differentiate this funding option from the ‘offering lines of credit’ by other commercial practices.
The Code addresses calls from some in the community for the prohibition of offering customers such a funding option, as a prohibition may result in a number of unintended consequences. These include all of the following:
- customers would continue to access credit from unregulated overseas operators (which may also adversely impact on the integrity of sport as suspicious betting patterns cannot be identified or bets tracked)
- customers would continue to access credit from less scrupulous operators, such as illegal SP bookmakers and loan sharks which have little regard for consumer protection or harm minimisation
- legitimate and illegitimate third party credit providers and intermediaries may fill the void either directly or indirectly which would then subject customers to:
- significant interest and fees on their loans
- undesirable collection methods.
The objective of the Code is to provide a robust framework for mandatory Sports Bookmaker regulation in relation to the provision of DSF to ensure this funding option accords with the promotion of responsible gambling while allowing Sports Bookmaker’s to remain competitive against offshore, unlicensed wagering operators.
The following minimum standards must be adhered to by Sports Bookmakers for all customers who open an account with a Sports Bookmaker after the commencement of the operation of the Code (other than for professional and VIP punters and bookmakers ‘laying off’ bets who, for the avoidance of doubt will not be covered by this Code).
A “professional and VIP punter” is defined as a person who has turned over at least $250,000 in any 12 month period, or whose betting patterns reasonably suggest that such person will turn over at least $250,000 in a 12 month period.
- The DSF must be applied for. Sports Bookmakers must not offer a DSF on an unsolicited basis and no incentives or promotional offers are to be offered to encourage customers to open a DSF.
- Sports Bookmakers can only advertise the provision of a DSF on the provider’s own website, in the ordinary course of business through its Business Development Managers (or equivalent) or in Electronic Direct Marketing (EDM) with members who have agreed to receive such materials.
- Either the Sports Bookmaker or an independent external assessment institution must undertake an appropriate credit assessment of an application for a DSF. Such checks must include:
- Verification of identity in accordance with Anti-Money Laundering requirements;
- Confirmation of age;
- Confirmation of current residential address;
- Contact details including phone and email address; and
- Assess credit worthiness by establishing employment or source of income or by other means.
- Settlement of the account is to occur weekly or monthly. Monthly settlement may only occur with facilities over $20,000 (although such facilities may still be settled in a shorter timeframe).
- A wagering provider cannot charge interest on the account or charge any fees for the administration of the account.
- A DSF must not be approved for an amount in excess of a pre-commitment level set by a customer.
- Facilities cannot be approved for any customer whose account verification process has not been finalised.
- For a DSF over $20,000 the Sports Bookmaker or an independent external assessment institution must interview the customer. Interviews should occur on a recorded phone line or be appropriately documented and filed, to assist in the assessment of the customer’s ability to service the DSF.
- A customer shall be prohibited from placing bets if their account balance at any time is equal to or exceeds the DSF amount.
- Reminder notices and the follow-up of any overdue monies for the DSF will be undertaken by appropriately trained staff for at least the first twenty-one (21) days of arrears before the matter can be referred to an external collection agency.
- The Sports Bookmaker may institute debt recovery proceedings against the customer to recover the outstanding account balance if a customer has not settled their account within a twenty-one day (21) period of the agreed settlement period.
- The Sports Bookmaker must maintain a register of all customers that have an approved DSF.
- The Sports Bookmaker must review an existing DSF where there has been a failure to repay by a scheduled settlement date to ensure that limit remains appropriate.
- The customer must be provided with a copy of the Code.
Any proposed changes to the method by which wagering providers use a DSF will not apply to existing DSF holders (a Grandfather Clause).
The Code will be reviewed in 12 months from the date of gazettal or sooner if required.
Complaints relating to compliance of this mandatory Code of Practice must be made via the online gambling dispute form for final determination.