👉 Background: Sportsbet is a sports betting company that launched back in Darwin in 1993. Since then, it’s grown rapidly through its rogue and incessant TV and social media ads. In fact, Sportsbet is now in the top 3 betting companies in Australia, with Tabcorp and Ladrokes/Neds.

👉 What happened: Now, Sportsbet is facing a class action from its customers who claim Sportsbet has enabled its customers to bet on live sports matches (which is illegal unless its "wholly" done via the phone). Sportsbet had created a loophole to circumvent this legislation - it enabled bets to be created on the app, but confirmed via the phone. It was called their "Fast Code" service.

‍👉 What else: Now, the class action is seeking a refund for everyone who lost money on in-play bets using Sportsbet’s Fast Code service over the past six years. And, if this is successful, Sportsbet’s finances and brand reputation could take a massive hit.

What's the key learning?

💡There is always an ongoing cat-and-mouse game between regulators and innovators, especially in fast-evolving industries.

💡In this case, Sportsbet introduced an in-app workaround to make bets seem compliant. But, the class action claims they were just skirting the law - and that ain't legal.

💡This ain’t Sportsbet’s first run-in with the law. In 2022, it was fined $2.5 million for spamming its customers with emails as well. So if this class action is successful, the jig might just be up for Sportsbet.