Australia's Sportsbet litigation could set dangerous precendent

A A$200 free bet promotional offer has triggered litigation between Paddy Power’s Aussie subsidiary Sportsbet and the state of Victoria which could have far-reaching effects in that country.

At the heart of the case is the question of whether an operator based and licensed in one territory or province can be held criminally responsible for the appearance of its promotional offers on the computer or mobile screens of punters in another state.

Sportsbet is based and has its servers in the Northern Territory, where it is licensed. It was hit by a fine from the Victorian Commission for Gambling Regulation, which claims that Sportsbet violated its laws by allowing its promotional offer to be viewed online by Victorian players.

Sportbet’s sister site, IASBet, was similarly charged for offering a A$1,000 sign-up bonus.

The Victorians claim that offering incentives to open a betting account is illegal in that province (it is legal in the Northern Territory, however).

In court last week, Sportsbet legal representatives presented the argument that the company is licensed and has its servers in the Northern Territory, according to reports in the Herald Sun newspaper.

The lawyers contended that the offer had therefore been legally made in the Northern Territory, and that in any case promotional inducements were not covered in any interstate compacts the two provinces may have in place.

They also cautioned that a finding in support of the fine could have far-reaching consequences for any website that was visible to internet or mobile users in Victoria.

Local industry observers are watching the on-going legal tussle with interest.