Sportsbet and TAB flatly rejected allegations they provided illicit drugs and escorts to a high-spending customer during a Senate inquiry into gambling reform, even as a former NRL player testified that betting company representatives offered to source him drugs while he struggled with severe addiction.
The denials came Monday and Tuesday as Parliament scrutinized the federal government's proposed gambling reforms. Reverend Tim Costello, chief advocate for the Alliance for Gambling Reform, told the inquiry about a young man who received funding for travel, escorts and drugs from the two companies. That man now sits in prison after being charged over the alleged theft of $12.3 million.
Representing Sportsbet, Jules Norton Selzer said the company had found "zero evidence" to support what he called "deplorable" allegations. TAB rejected the claims outright, stating that the inducements described "do not in any way form part of TAB's customer offering" and that it maintains "zero tolerance" for such behaviour.
The Addiction Crisis at the Center
But the companies' denials collided head-on with testimony from Luke Bateman, a former NRL player who appeared before the inquiry on Monday. Bateman said betting company representatives offered to source him illicit drugs while he was struggling with a severe gambling addiction. He didn't identify which companies made the offer, leaving the specific claim unresolved—but his testimony painted a starkly different picture of how the industry operates around vulnerable customers.
Responsible Wagering Australia chief executive Kai Cantwell described the allegations as "egregious" while saying the wagering industry "strongly refutes" the claims. Yet he also acknowledged the industry's track record isn't spotless. "Has the industry always got everything right? No," Cantwell said. "We are presented with cases where we may have got things wrong."
That admission came as Senator David Pocock presented screenshots of a Bet365 ad featuring young children dressed in branded T-shirts competing in a race. The ad has since disappeared from Racing.com. Pocock also raised the example of gambling ads playing between Disney songs on a Spotify playlist—a detail that cuts to the heart of the reform debate.
The Advertising Problem Nobody Can Define
When Pocock accused Sportsbet of deliberately targeting children, Norton Selzer insisted it was "absolutely not" the company's intention. He said Sportsbet had wound back its advertising on free-to-air TV to reduce exposure. On the Spotify ad, he offered a defense: "This was an adult on an adult playlist."
Pocock wasn't convinced. "BS," he shot back, asking if the company wanted "every seven-year-old to have their own Spotify account."
Even the communications watchdog appeared unable to provide clarity. The Australian Communications and Media Authority (ACMA) struggled to answer questions about how proposed legislation would be implemented. In a tense exchange with Senator Sarah Hanson-Young, ACMA representatives admitted they had "not formed the precise definition" of who would fall under the bill's "notable person" provision, intended to regulate gambling promotion by public figures and influencers.
Sportsbet was also critical of the lack of clarity, claiming that "anyone with an Instagram account" could be considered a notable person under the current draft. The regulator confirmed it had not received additional funding to enforce the proposed advertising regime—a gap that raises questions about how seriously Parliament intends to enforce new rules.
The VIP Customer Problem
The inquiry also exposed a fundamental lack of transparency around how betting companies cultivate high-spending customers. TAB spokesperson Julian Whealing said the operator had 800,000 active customers, including about 400 they considered VIP. He said the company had stringent "know your customer" requirements to avoid criminals using their services.
But neither Sportsbet nor TAB could say how many account managers serviced their VIP customers—a striking gap in accountability. Sportsbet said it provided "tailored offers" to some customers, with Norton Selzer saying those customers were selected based on "engagement" rather than betting volume. When pressed on what constituted sufficient engagement, he said it could relate to "a range of things," including customers enjoying "different products." The vagueness of that answer suggests the industry operates with minimal external oversight of how it targets and retains its most profitable customers.
Norton Selzer defended Sportsbet's use of inducements, which he described as "promotions" that rewarded "customer loyalty." "It's about trying to ultimately retain our customers," he said. But advocates are pushing for a total ban on inducements—a key finding of the 2023 You Win Some, You Lose More report by late Labor MP Peta Murphy—which isn't included in the proposed legislation.
The Threat of Offshore Gambling
Sportsbet, TAB and Responsible Wagering Australia told the inquiry they were broadly supportive of the government's changes. But all three warned that proposals for a complete gambling ad ban would accelerate movement to illegal offshore gambling streams.
Norton Selzer described the proposed legislation as "substantial" and warned that additional advertising bans would create "significant funding issues" for sport, racing and broadcasting while having a "disproportionate impact relative to the policy objectives of the bill." Cantwell said licensed online wagering companies already operated in one of the "most highly regulated gambling markets in the world" and contributed $6 billion in economic activity each year.
Senator Hanson-Young wasn't swayed by the industry's arguments about regulation. "Your industry only gets to survive on the social licence you have," she told Sportsbet. "You're on very thin ice with the Australian public."
The tension between industry assurances and the testimony of addiction victims underscores the core problem: gambling companies have strong financial incentives to cultivate high-spending customers, yet the mechanisms for doing so remain largely opaque and unregulated. The proposed reforms would strengthen some protections, but the debate itself reveals how much discretion betting companies retain to shape customer behaviour through inducements, targeted marketing, and account management practices that aren't fully transparent to regulators or the public.
Why This Matters:
The allegations and testimony before this Senate inquiry expose a gap between what gambling companies claim about their practices and what vulnerable customers experience. A young man received funding for escorts and drugs from betting operators; a former athlete says he was offered illicit substances while addicted. Whether these claims are true or not, they raise urgent questions about how the industry manages VIP customers and whether current regulations adequately protect people struggling with gambling addiction. The industry's inability to explain how many account managers service high-value customers, or to define what constitutes "engagement" for targeted offers, suggests minimal transparency around profit-maximizing practices. The communications watchdog hasn't even formed precise definitions for key terms in the proposed legislation, and hasn't received funding to enforce new rules. Meanwhile, betting companies warn that stronger protections will push customers to illegal offshore operators—a threat that essentially argues the industry needs minimal regulation to survive. For the millions of Australians who gamble, and the families affected by problem gambling, the question is whether Parliament will impose genuine accountability or accept the industry's framing that regulation must be light to protect jobs and funding for sport.