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Online lottery company Lottoland takes court action

Mon, Jun 10, 9:23am by Staff Writer

Online lottery company Lottoland has launched legal action against the federal government after an investigation found the company has violated gambling laws by providing prohibited services.

The Sydney Morning Herald reports that the federal media watchdog’s investigation centered on Lottoland’s “jackpot betting” product which determines winners by pulling numbers from financial markets including the New York Stock Exchange at opening time, arranging them into one long number and using a computer calculator to convert it into the winning numbers.

“The Australian Communications and Media Authority investigation found that several Lottoland online jackpot betting services were games of chances which are prohibited,” the regulator said.

“These included the Mon and Wed Jackpot, Tue Jackpot, Thu Jackpot, US Millions, and US Power jackpot betting services.”

The decision is a fresh blow to the embattled business in Australia.

The company only recently began offering the exotic jackpot betting product after its main product, lottery betting, allowing punters to place bets on the outcomes of local and overseas lotteries without having to buy a ticket in any draw, was outlawed by Australian parliament last year.

In the wake of the finding against its new offering, Lottoland’s Australian business on Friday said it had filed legal action in the New South Wales Supreme Court against ACMA because “we believe their view on jackpot betting is wrong.”

The company said it believed its jackpot betting products, which had been approved by Australian licencing authorities, were compliant with Australian law.

“We have worked hard to adapt to recent changes to the law, and we are committed to providing exciting new products that our customers love,” Lottoland Australia chief executive Luke Brill said.

Lottoland has stirred controversy since its arrival in Australia, being viewed as a threat to lottery provider Tabcorp and the newsagents and lotto agents who sell lottery products.

With a series of provocative TV advertisements, Lottoland has been expanding in popularity and claims to have 750,000 users in Australia.

A federal government ban on so-called “synthetic” lottery sites such as Lottoland’s, which passed Parliament last year, followed a storm of criticism and prolonged campaigning from the lottery operators and sellers who argued Lottoland had been cutting into their businesses and eroding tens of millions of dollars in tax revenue that would otherwise fund important infrastructure and services.

Lottery Office offers its support

The Lottery Office has officially come out in support of regulators’ inquiries into Lottoland and its jackpot betting offerings. The Australian-owned organisation is the only licenced Northern Territory lottery operator online. The operator allows players to bet on lotteries around the world like Powerball and Mega Millions in the United States, and EuroMillions in Europe.

Jaclyn Mundy, General Manager of The Lottery Office, has given her support for a strictly-controlled environment. And she is concerned that people will confuse her company’s products with those from Lottoland.

“Some of the names that Lottoland is using for financial market betting, such as US Power, are obviously designed to look like its previous ‘lottery betting’ products, though its products based on financial market indices from around the world have nothing to do with lotteries. This may be confusing for consumers. Also, it is hard to tell from their advertising if what they offer really is ‘jackpot’ betting,” Ms Mundy said.

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