Betfair describes itself as the world's biggest betting exchange, an online portal where punters can bet against each other.

Key points: The man, "Mr M", asked Betfair to reverse a request to transfer $150k from his betting account into his personal bank account

The man, "Mr M", asked Betfair to reverse a request to transfer $150k from his betting account into his personal bank account The "desperate" punter had already lost $190k in one day and had a history of self-exclusion

The "desperate" punter had already lost $190k in one day and had a history of self-exclusion Betfair should have identified "red flag behaviour" and suspended his account, NT Racing Commission finds

But the company has found itself on the losing end of a punt by one of its own clients.

"Mr M", as he is described in official documents, lodged a gambling dispute against Betfair and has managed to get the company to refund him $150,000 in "unlawful bets".

The details of the case are outlined in a decision by the Northern Territory Racing Commission, which regulates Betfair in Australia.

The key question was whether Betfair should have identified "red flag behaviours" that showed Mr M had a gambling problem before it agreed to reverse his request to transfer $150,000 out of his Betfair account and into his personal bank account.

The Commission heard Mr M had already lost significant sums of money on February 20 this year when he made his initial request to shift the money into his bank account.

But within 23 minutes of making the request, Mr M gambled away the remaining $86,388 that was still in his account.

Four hours later, after topping up his wagering account with $35,000, he was again close to zero after just 47 minutes.

In a "desperate mindset", Mr M then asked Betfair to reverse his earlier withdrawal request so he could top up his wagering account with $150,000.

After initially being told that Betfair "generally can't cancel" withdrawal requests, Mr M made three more calls to the company and a manager eventually agreed to reverse the withdrawal as a "one-off".

Mr M subsequently gambled away the $150,000 that was returned to his account.

Betfair failed to 'reasonably recognise' red flags

Betfair told the commission that it could not have reasonably known Mr M had a gambling problem as he had never stated he had one, nor were there any "discernible indicators" found in his gambling activity.

This was despite acknowledging that Mr M had previously self-excluded himself from gambling for six months in 2014 and had a one-month timeout on his account in 2016.

The commission also heard Mr M had tried to reverse a $40,000 withdrawal in January this year, only to be told he couldn't do that because of "responsible gambling" reasons.

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The commission was also given evidence showing a significant increase in Mr M's gambling activity, from $22,000 in 2016 and $47,000 in 2017 to $380,000 in 2018.

"On the weight of evidence provided, the commission is satisfied that Betfair failed to adhere to the code by not having reasonably recognised the red flag behaviours of the complainant," the commission said in its decision.

"It is reasonable in the circumstances and particularly given … the complainant's previous self-exclusions and timeouts from his account that a review of all his betting activity up to the time of the request to cancel the withdrawal be carried out.

"If this had been done, it would have been apparent that the complainant lost over $190,000 in one day prior to his request to cancel his withdrawal.

"It follows that had Betfair complied with the code and observed the red flag behaviours, it would have necessarily suspended the complainant's account and not accepted further bets from him, nor agreed to reverse the withdrawal request."

It found all bets placed after Mr M's withdrawal request were "unlawful bets" and therefor Mr M should be refunded $150,000.

The commission said it was the third time in 18 months that Betfair had failed to comply with a condition of its licence.

As a result, it fined the company $13,175.