Sportsbet owner expands from gambling into less-regulated 'rewards club'

The popular 'rewards club' model has users enter into draws for cars, cash and luxury homes. (AAP: Julian Smith)

Sportsbet's parent company has launched a rewards club, which operates under less stringent 'trade promotion' laws.

Gambling reform advocate Tim Costello is concerned about close ties between a major gambling company and the loosely regulated giveaway sector.

The federal government has pledged to crack down on "dodgy lotteries" with stricter laws, but there has been limited enforcement of existing regulations.

One of the biggest gambling companies in the world is breaking into Australia's "rewards clubs" scene, raising alarm bells for anti-gambling advocates.

Sportsbet's parent company Flutter Entertainment has launched Sportsdream Rewards, a company using the rewards club model, which has exploded in popularity.

Rewards clubs use 'trade promotions' as a loophole to run prize draws often worth millions of dollars. (Supplied: Sportsdream Rewards)

Sportsdream promises customer entries into prize draws of cars, cash and luxury holidays for just $19 a month, as well as rebates on sporting events and discounts on brands in exchange for a membership fee.

The current draw is offering either a brand new 4WD or $100,000 cash.

The lucrative rewards club industry claims to have given away hundreds of millions of dollars to members, who pay a monthly fee to join the clubs, and are entered into draws to win prizes, which can include cash, cars or even houses.

"Rewards clubs" have exploded in Australia, claiming to have given away hundreds of millions in prizes, but they operate with almost no legal scrutiny.

The clubs operate using "trade promotion" laws, which are intended to permit lotteries or giveaways to promote a product or service, and not be the product themselves.

The ABC has previously identified over 80 companies that use this legal loophole.

The Sportsdream Rewards club is operated by a company called Free To Play Australia Pty Ltd — it does not promote its links to Sportsbet, despite the paper trail revealing close ties.

ASIC filings obtained by the ABC list Free to Play's owner as Paddy Power, a subsidiary of Flutter Entertainment.

Sportsbet's chief executive officer, since promoted to boss of Flutter APAC, and chief commercial officer are the directors of Free to Play Australia Pty Ltd, with the registered address listed at Sportsbet's headquarters in Melbourne.

Flutter is one of the largest gambling companies in the world, owning popular platforms such as Fanduel, Sky Betting & Gaming and Sportsbet, generating $US9.4 billion