Neds, a startup gaming company with a focus on sports betting, has been fined by a court in New South Wales for its advertising campaigns that encourage people to gamble. The advertisers offered incentives to gamblers who opened an account with the company, which violates the law.

Examples of incentives offered by Neds to entice new business were deposit matches of $500 and offers to boost betting of new customers. The Liquor and Gaming Board of New South Wales brought five charges against Neds, and, after pleading guilty, the company was fined $18,000.

A Newcomer in Sports Betting

Neds is owned by bookmaker Dean Shannon and is considered a startup company, having begun in 2017 in the Northern Territory. Shannon has experience with online bookmaking, having founded Ladbrokes and Bookmaker. Neds’ headquarters is located in Brisbane. The company went public with a stock offering worth $55 million in April. Neds has an online presence in all of Australia, and it is estimated the company is worth approximately $200 million.

Shannon has stated that he has plans to launch the website in the United Kingdom and other countries. The technology platform the website uses is built to handle high volumes of transactions seamlessly. It is preparing to launch online lotteries and gaming, as well as sportsbooks.

Neds has had a reputation for provocative advertisement since its founding. Its advertisements on television have caused controversy. They have scantily clad women cavorting around offering incentives for gambling and declaring sports gambling to be sexy.

Another ad that was deemed controversial was a television ad that showed construction workers not working at their jobs but placing bets on their mobile phones. That ad, which was free to the business, was pulled from television after dozens of complaints to Australia’s Advertising Standards Board.

Advertising Laws for Gambling in Australia

In the past, advertisers of gambling and gambling products in Australia had more leeway to advertise in whatever manner they chose. However, earlier this year, the NSW government enacted a law that places greater restrictions on advertising of gambling in order to reduce the harm that gambling can cause the population of NSW.

Some of the provisions of the new law are:

  • Banning the use of any inducement within advertising for gambling that might give consumers the idea that to participate in gambling activities gives them additional money. In the past, gambling companies were allowed to offer inducements as long as the ad contained a disclaimer that stated gambling was a risk and that there was the potential the gambler could lose all the money, including the incentives.
  • The penalties for offering inducements were raised and continue to increase for additional offenses by the same company. The penalties can run from $5,000 per offense to $55,000 per offense, depending on the number of prior offenses.
  • Directors are no longer excluded from liability for company advertisements because the law now assumes the directors had some knowledge of the advertisements before they were published or televised.

While Neds paid the fine to the NSW government, it is not clear if it will change its advertising ways. Shannon is known for his provocative ads, and the more conversation he is able to create about his company, the better.

If his advertising starts conversations and leads to an increase in revenue, then Neds’ fine is a drop in the bucket considering the amount of revenue the company is set to make over the next year. Experts are predicting the company will gross hundreds of millions of dollars in 2018 on bookmaking countrywide.

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Thomas McCoy was born in Bethesda, Maryland and studied finance at the Kogod School of Business at American University in Washington D.C. before heading to New York and a job as a forex trader on Wall Street. Successful enough to launch his own, online forex trading platform, Thomas has long had a keen interest in the places where the worlds of finance and technology meet. As a prolific blogger, Thomas considers himself an expert on cryptocurrencies, casino asset restructuring, and emerging technologies set to change the way people do business.