Several media outlets in Australia could lose gambling revenue streams in case the Federal Government supports some parliamentary committee’s inquiry calls to suspend trailing commissions.
News Corp and other media outlets that refer people to gambling companies through adverts usually receive a commission when punters subsequently lose money. According to reports, the commission in question can reach 30% of punters’ net losses in some cases.
In 2011, an Australian parliamentary committee shared its concerns about so-called affiliate payments but the practice continued without further measures to be taken. The value of payments has increased in line with the Australian online gambling sector, which, according to reports, generates an annual turnover amounting to almost $50 billion.
As Casino Guardian already reported, a new bipartisan inquiry headed by Peta Murphy, a Member of Parliament from the Labour Party, has made a recommendation that commissions being paid to any third party involved in the provision of online gambling to local customers should be prohibited. Ms Murphy has explained that, as heard by the committee, this practice tended to be extremely dangerous to people experiencing gambling-related harm.
So-called “trailing commissions” are delivered by gambling operators in different ways. Some of them are calculated on the base of every customer’s losing bet, with a percentage of the punter’s loss automatically paid to the affiliate. Others are paid to affiliates every month or the payment depends on certain conditions, such as once five active gamblers are referred.
According to PointsBet documents, the sports betting operator requires affiliate websites to actively recruit potential customers through commercials in order to pay them a commission. Dabble’s terms and conditions, on the other hand, require affiliate websites to provide the sportsbook operator with information that allows them to track the referred customers and comply with the company’s advertising rules.
Online Gambling Operators Offer Incentives to Affiliate Platforms to Groom Australian Punters
Reportedly, the mass media and publishing company News Corp has acquired a number of websites, including racenet.co.au and punters.com.au, which accumulate sports betting information and refer customers to Australian sports betting operators. These platforms, however, feature a much higher volume of gambling ads than the ones featured in general online news sites.
The revenue that so-called trailing commissions generate for gambling websites remains unknown but previous reports claim that it has been “substantial”.
When approached for commentary on the trailing commissions, Australian communications minister Michelle Rowland shared she was still considering the recommendations made by the parliamentary inquiry and promised that she would further engage with the sector as quickly as possible.
The use of affiliate commissions has been regularly recorded for more than a decade by Lauren Levin, a Financial Counselling Australia harm reduction campaigner. According to her, a business whose entire premise is based on receiving trailing commissions worth between 25% and 30% of gamblers’ net losses violates customer protection rules, and businesses that do so are offered incentives to groom people to lose. The fact that commissions are usually undisclosed and players are not aware they actually exist raises even more questions associated with consumer protection.
According to Lauren Gurrieri, an associate professor of marketing at RMIT University, the affiliate websites’ payments have managed to circumvent the competent authorities monitoring, while at the same time offering incentives to groom customers – a trend that is considered highly concerning and proves there are some broader issues associated with the Australian gambling sector.
- Author
Daniel Williams
