In this sports betting company, the winners are called 'problem customers'

Updated

On a hot Saturday afternoon in Darwin, James Poppleton is mopping the sweat from his brow.

It hasn't rained for 160 days.

On this particular day, he's got even more reason to perspire.

He's about to speak out against his former employer — one of the world's largest betting companies.

Mr Poppleton worked for 18 months as a customer account supervisor at bet365.

What he saw during his time at the company disturbed him so much he's blowing the whistle on bet365's practices — despite the personal risk.

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"Australians have an innate sense of fairness almost built-in, and what the bookies do, what bet365 does is not fair," he said.

"You can't win. Those that win are stopped. Those that lose are exploited and then they develop cheating techniques as well."

Taking in a game of women's AFL at Tracy Village Oval, there's a palpable sense that a deluge of rain is about to break Darwin's dry spell, and James is spilling what he knows about how parts of the sports betting industry operates.

"I'm speaking out about bet365 because the information I know is a burden on my conscience."

For the first time, he's revealing how bet365 uses backdoor algorithms, restrictions and alleged delaying tactics to skew the competition and drive up profits — all while the punter thinks they're playing a fair game.

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Punters are suspicious

It was a bet365 promotion on the Big Bash League that made the agency attractive to Daniel Laidlaw. He's a punter who understands odds better than most.

A professional poker player by night, he treats sports betting as a hobby.

He noticed something unusual was happening with his bet365 account earlier this year.

"When I tried to place my usual-sized bets, it was apparent that I could only bet to win an amount in the range of $5-10 dollars when previously, I'd be able to bet to win amounts between $1,000 and $5,000."

As a result, Mr Laidlaw now gambles with offshore betting sites that pay no tax in Australia.

Bet365 won't tell Mr Laidlaw why it restricted the size of his bets.

ABC Investigations has obtained a screenshot of Mr Laidlaw's account details from inside bet365. It reveals that he has been effectively banned from betting with the agency. The truth is revealed by a secret algorithm that classifies Daniel as a successful punter and therefore a risk to the company's profits.

It rates him at 0.0025. This means inside bet365 Mr Laidlaw is considered a threat to its bottom-line.

According to former bet365 employee James Poppleton, a risk rating of 0.0025 is one of the highest that can be assigned.

He explains how the system operates:

"Your data tells them how many bets you've placed, what sport you've put it on, your average bet, your total turnover and your win or loss ratio to the company," he says.

"If you win, the algorithm kicks in and stops you from being able to bet any significant amount of money."

Mr Laidlaw has not been able to obtain his risk rating from the company itself.

"I think it's outrageous. It's unfair. And there's also just no transparency. If they're profiling us in this way, then we should know as customers exactly what it means and have access to this information," he says.

No one from bet365 would agree to an interview with the ABC. In a statement, it said its "service is provided in accordance with its published terms and conditions and all applicable laws and regulations."

As part of those terms and conditions, it can close or suspend an account at any time for any reason.

Mr Poppleton claims these algorithms apply not just to winners, but those who lose as well.

"As soon as you start losing, they'll open you up to lose more and more and more, you can bet bigger and bigger amounts," he says.

"If you stop winning, you're allowed to bet more and more and more. It's the opposite of responsible gambling."

Bet365 said it, "has a robust responsible gambling policy in place to monitor each customer's gambling patterns and expenditure and ensure that their gambling behaviour is within responsible limits."

A reclusive billionaire

From humble origins, bet365 has capitalised on an explosion in online gambling and now boasts over $5 billion in turnover for its global operations. The UK-based agency is privately owned by the Coates family and based in the city of Stoke-on-Trent.

At its centre is the reclusive mathematical and entrepreneurial genius Denise Coates, who is now by far Britain's highest-paid chief executive officer; she took home a whopping $506 million pay packet last year.

Her father owned what she once described as a "small chain of pretty rubbish betting shops". It has been reported she bought the domain name bet365.com on eBay and launched the business from a portable cabin in a car park near one of the family betting shops.

'Ban or bankrupt'

Bet365 soon pioneered a new way of maximising profits.

The betting agency would entice punters to sign up with good odds, free bets and special offers and then ban or restrict the successful ones, sending them off to gamble with their competitors.

"The other companies didn't know what to do," says Brian Chappell, the founder of the UK consumer advocate group Justice for Punters.

"They were asking: 'How do we get our losing customers back because all we're ending up with is our winning customers?' So, they had to join the game, didn't they?"

The consumer advocate describes the business model that bet365 pioneered as "ban or bankrupt".

"It's this business model of being really, really ruthless with your customer base. You end up with a customer base that is virtually 100 per cent known losers."

Part of bet365's success in Australia is attributable to its relationship with the biggest sporting codes — it's an official gold partner of Cricket Australia.

Its logo can be seen on the boundary rope during play, and the odds are regularly spruiked during pay-TV coverage.





'Problem customers'

For bet365 the most lucrative area of sports betting globally is in-play betting, although the company claims it's a minor part of its Australian business. In-play allows punters to bet while a match is live — the next goal in football, the next try in football, the next wicket in cricket.

A smart in-play punter will have a good knowledge of the sport, an understanding of how odds work and will then apply those skills to try and beat the bookmaker in fast-moving sports where odds can sometimes lag behind what's unfolding in the game.

In Australia, you can only bet in-play over the phone thanks to laws dating back to 2001 which attempted to minimise the losses from online betting.

A secret internal bet365 document obtained by ABC Investigations suggests that mandatory phone betting for in-play was causing problems for the company.

The policy document, dated September 2016, is designed to deal with what bet365 calls "problem customers" and says:

"The nature of betting on the telephone as opposed to betting online lends itself to the possibility of being exploited in fast-changing markets … some customers are aware of this fact and use the pace of the sport to their advantage when placing bets."

The leaked document shows that bet365 was concerned by customers stalling on the phone or placing what it calls late bets.

bet365 told the ABC it targets, "those who seek to gain an unfair advantage over other customers through deliberately deceptive and fraudulent means including by using delay tactics and other abuses of the system."

Given the terms and conditions already allows the company to ban customers it suspects of fraud or reject any bet it sees fit, James Poppleton describes the problem customer policy in a different way.

"We were having lots of customers who were better than the trading department at betting at live in-play, so they would see where the odds were just that little bit better than what they believed they should be. And they were winning," he says.

The so-called "problem customers" were put on a list and managed by a special team which would check their betting history, listen to their calls and potentially restrict them from betting.

According to Mr Poppleton, this policy wasn't doing enough to prevent these "problem customers" from winning.

He claims the company came up with a new secret strategy to deal with them.

'Delay testing'

An internal bet365 email from September 2017, obtained by ABC Investigations, announced that something called Quick Code Delay Testing was taking place.

Customers making Quick Code bets over the phone using 3- or 4-digit codes were having the length of their calls logged. According to the email, the testing was to see, "if there is any delay between placing the bets on Cricket as opposed to the other sports."

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Lawyers acting for the company told the ABC that the purpose of the testing was designed to reduce "naturally occurring" delays experienced by customers when placing bets over the phone.

Mr Poppleton had suspicions it was for something else entirely.

He claims the testing was to see whether customers would notice if there was a delay for in-play betting on certain sports.

"I asked one of the managers if the purpose of the testing was to see whether or not you could tell if there was a delay at the point of bet placement within the tele-bet software. And he said, yes."

The ABC contacted the manager in question and asked him to confirm Mr Poppleton's allegation. He did not respond.

Mr Poppleton claims at the time, there was a delay of 1-3 seconds between when a bet was submitted over the phone in certain sports and when it was accepted.

Seconds may not sound like much, but when betting on fast-moving sports involving elite athletes, even micro-seconds can count. Broadcast delays can mean the action on the TV is a few seconds behind the action at the ground.

He claims any delay would give more time for a bookmaker to reject a punter's bet or reconsider the odds on offer.

The former bet365 employee says the testing stopped soon after he raised the issue with a manager.

Mr Poppleton concluded that it had solved the problem of sharp punters winning on in-play and it was no longer necessary to use the "problem customer" policy.

"The procedures we used to manage customers who were beating us in-play were no longer needed."

He claims the alleged delay was big enough to make a difference but small enough for the punter not to notice and gave bet365 an unfair advantage.

Bet365 told the ABC, "it has never used any form of delay in its telephone in-play betting service in Australia," and that its "telephone system does not have any such functionality".

Delay 'is cheating': Punter

ABC Investigations has obtained four screenshots from computer terminals inside bet365. They show customer accounts which have the words "Delay Added" next to punters' names.

Three of these accounts appear to belong to overseas punters.

"I've seen a complaint spreadsheet that a couple of international customers had asked if there was a delay within their accounts," says James Poppleton.

He says if there's a delay put on for overseas customers it's unfair, especially if they're not told about it:

"Putting a delay into people's accounts or into individual sports and not informing the punter is cheating. They are only doing it to make more profit, to stop people who are smarter than the bookie and to win more money off them, to cheat them. Punters should know what the rules of betting are."

One of the accounts with "Delay Added" next to the punter's name appears to be Australian but also has the term "Aus BetCall" against it. This is a reference to an old bet365 system which allowed a punter to place bets using a phone or computer without having to have an actual human conversation.

Several betting agencies had different versions of these systems but they are no longer in use after a government crackdown.

The regulator

The main regulator for sports betting is the Northern Territory Racing Commission.

The NT government introduced very low tax rates to attract corporate bookmakers ten years ago. More than 20 agencies subsequently set up their headquarters in Darwin, including bet365.

Alastair Shields has been the chair of the NT Racing Commission for just over 18 months.

He says he's not heard of any allegations about delays in in-play betting.

"If there was some deliberate action taken to delay … that's something we would have jurisdiction to look at, in particular, whether that, I guess, complies with their licence conditions, within the terms and conditions of their contract."

When it comes to restrictions placed on successful punter's accounts he says he has had complaints about that, but there's little he could do about it.

"Essentially, it's a contractual matter between a client and a sports bookmaker. That's a bit the same as if I go into a shop and the shopkeeper decides they don't want to serve me. They can decide not to do that."

A fair bet?

Mr Poppleton had an acrimonious relationship with bet365 before he left and is worried about the cost of speaking out.

"They'll either deny it and say I'm lying or that I'm a disgruntled employee."

He says two disputes with management before he left the company were resolved but he began to question the culture of bet365.

Mr Poppleton says one was over staff being forced to take annual leave and another about employees being disciplined for taking sick leave.

"It motivated me to look further into the other activities of the company, and that led me to discover that the whole company is set up for screwing the punter."

He says he's ashamed about his time working for bet365 but hopes speaking out will help shed light on the secretive world of sports betting.

"I think punters, when they find out, will be angry. Aussie punters think they're getting a fair go. Getting a fair game. A fair bet. And they're not."

Watch the story on 7.30 and listen to the podcast on Background Briefing.

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Topics: gambling, arts-and-entertainment, other-sports, sport, corporate-governance, australia, darwin-0800, nt

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