Information and resources for financial counsellors

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Information and resources for financial counsellors

Credit for gambling

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It is well known that the availability of credit increases the risk of gambling harm.

To reduce the risk of people getting into debt due to gambling, clubs, pubs, casinos and all major online wagering operators in NSW are not permitted to provide credit to be used for gambling.

Laws which prevent venues from providing credit for gambling include:

  • section 74 of the Casino Control Act 1992 (NSW) prohibits casinos from providing credit for gambling purposes
  • section 47C of the Gaming Machines Act 2001 (NSW) prohibits club and pub ATMs and EFTPOS machines from providing cash from a credit card account
  • section 108 of the Liquor Act 2007 (NSW) prohibits clubs and pubs from providing any form of credit to enable a person to gamble on the premises
  • section 109 of the Liquor Act 2007 (NSW) prohibits venues from disguising credit for gambling as payment for goods and services (e.g. describing a credit card cash advance as being for "accommodation")
  • section 81 of the Totalizator Act 1997 (NSW) prohibits the TAB from allowing most forms of credit betting
  • Part 2B of the Interactive Gambling Act 2001 (NSW) prohibits interactive wagering services from providing credit, with limited exceptions

If your client reports that one of the above actions may have happened at a pub, club or casino then the venue’s actions should be reported to Liquor & Gaming NSW. Licensed online operators who break the rules can be reported to the Australian Communications and Media Authority (ACMA).

Centrelink debts

If Centrelink believes a client has been overpaid, they will contact the client to explain how much they were overpaid, the repayment procedure and the due date by which the client needs to start making the repayment. Any overpayment is considered a debt and must be repaid to Centrelink.

If your client does not attempt to make the repayment or stops making repayments, they may be at risk of prosecution for Centrelink fraud. Courts typically impose severe penalties for Centrelink fraud, which could include imprisonment.

Helping your client to establish a repayment plan will make it easier for them to get on top of their debt and ensure that it is repaid in full. If your client is later charged with fraud they could receive a lighter sentence if they have tried to repay their debt. A client charged with Centrelink fraud should also seek professional legal help.

If your client is considering bankruptcy, they should know that there are often unexpected results of going bankrupt and that bankruptcy may only extinguish a Centrelink debt in limited circumstances. If your client seeks advice about Centrelink debts and decisions, refer them to the Welfare Rights Legal Centre.

Illegal access of superannuation

Self-managed super funds (SMSFs) are complex financial structures that must only be used to fund someone’s retirement, just like a regular super fund. When someone manages an SMSF, they are responsible for everything that happens to the fund, including not making illegal withdrawals for gambling.

Clients who have an SMSF and illegally withdraw funds to gamble could face serious penalties from the ATO, including repayment, disqualification from operating an SMSF and even having the SMSF’s funds frozen.

If your client has made unauthorised withdrawals from their self-managed super fund (SMSF), they should tell the ATO by completing a Contravention Disclosure Form that is downloadable from the ATO website. They will also need to declare the withdrawal on their tax return.

You should also encourage these clients to close their SMSF and transfer the remaining funds to a regular superannuation fund. This will remove the temptation of using the available funds for gambling.

Debt collection

Clients who gamble may:

  • frequently accumulate multiple overdue debts
  • have a history of debt consolidation
  • have opened multiple new accounts to service existing loans

Gambling counselling clients often disclose details about their debts to a counsellor in the course of treatment. It is important that these clients are supported to, where possible, consolidate and pay down these debts to assist in their recovery.

You should be aware that people who are experiencing issues with gambling may not disclose all of their debts to you, or they may continue to obtain further credit without disclosing this information. Be sure to check their financial documents carefully, including financial statements and credit reports.

Be cautious about setting up long-term payment arrangements for someone who struggles to control their gambling, as the risk of relapse can make long-term arrangements impractical.

If your client has a problem paying off their mortgage due to gambling issues, this Mortgage Stress Handbook by Legal Aid NSW provides repayment options as well as related guidance.

Clients who receive a Statement of Claim for unpaid debts must decide whether they should lodge a defence. For small debts, they may not need to see a lawyer. For information on the Local Court process for claims up to $20,000, visit LawAccess NSW

Ensure your client is aware of the enforcement process after judgement, particularly regarding wage garnishees, bankruptcy and seizure of property.


With the stress of debt collection due to gambling, an individual may feel the need to turn to bankruptcy to clear their debts and seek a fresh start. While bankruptcy can enable your client to clear their unsecured debt and allow them to focus on their rehabilitation, it also has serious consequences.

Where gambling losses increases a person’s debts during the 2 years prior to bankruptcy, the person may be prosecuted and can receive a prison sentence of up to 1 year. This is very serious and may be a significant factor in whether your client should declare bankruptcy.

The Australian Financial Security Authority (AFSA) pursues prosecutions under these laws. You can find a short summary of recent cases on their website.

Gambling counselling clients often seek help when their debts become too much to manage. If your client has taken out loans within 2 years of filing for bankruptcy, when they knew that they were unable to repay the debt, they have committed an offence and could receive a prison sentence of up to 1 year.

You should support your client in explaining their personal situation to AFSA if they are under investigation or are facing legal action. Your client should also seek independent legal advice as soon as possible.

You should know that the court will consider your client more favourably if they:

  • have not applied for additional credit prior to filing for bankruptcy
  • are attending gambling counselling on a regular basis
  • have not previously been bankrupt

For a person who is bankrupt and facing prosecution, AFSA will take into consideration the circumstances of the offence as well as their personal situation.

Impact of gambling losses on property settlements

Property settlements after divorce are difficult to face and will often come down to what each spouse has contributed or taken away from the shared pool of funds in the marriage.

As stated in section 79 and section 75(2) Family Law Act 1975 (Cth), the Federal Circuit and Family Court of Australia considers the contributions made by each party to a marriage when calculating the division of property. Negative actions and contributions, such as taking shared funds to gamble, will also be taken into account.

Generally, the Court will only take gambling expenditure into account when calculating the division of property if the amounts lost are largely disproportionate to the parties’ lifestyle. If your client is facing marriage breakdown following one partner’s gambling, they should seek independent legal advice on how property should be divided.

GambleAware acknowledges Aboriginal people as the traditional custodians of the land and we pay respects to Elders past, present and emerging. GambleAware is an inclusive support service.
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