Under the law in the Northern Territory, where BetEzy was licensed, unlawful betting is an offence both for punter and bookmaker.

BetEzy, which had several run-ins with regulator the NT Racing Commission, wound up on July 1 after former Sportsbet chief executive Matthew Tripp bought the company's customer database.

Mr Tripp is now operating under a new NT licence granted to his company BetEasy, and has no responsibility for the case.

The punter, "Mr E", told the commission he placed the bets with BetEzy VIP manager Gary Daniels on the evening of November 29 last year.

At the time, Mr E's account was suspended due to his account being almost $15,000 in debit.

In a bid to get his betting account reactivated, Mr E sent BetEzy's chairman, Chris Ryan, a screenshot showing he had transferred $50,000 into the bookmaker's bank account.

However, Mr Ryan refused to reactivate Mr E's betting account until the funds cleared.

It is then that Mr E alleges Mr Daniels offered to accept the bets, "all of which were recorded via SMS".

"Gary advised he would be placing $1 of each bet on his own account to be sure the company could see bets were placed prior to a race start," Mr E told the commission.

"At the conclusion of the evening, Gary posted an SMS stating that my ledger balance was $169,000 in credit. He stated in the same SMS that he would probably lose his job and his girlfriend for what had occurred."

However, Mr Daniels, who was not authorised to accept bets, denied he did so and the commission said that despite repeated requests, Mr E "never produced copies of these text messages or any ledger entries relating to the bets placed".

"Indeed Mr E has not been able to provide any authenticated or verifiable detail of any of the alleged bets, despite being requested to do so on a number of occasions," chairman Richard O'Sullivan said in a decision handed down last Friday.

The commission said Mr E was also unable to produce a document showing he had put $50,000 into BetEzy's bank account. Mr E said he cancelled the transfer on November 30 after the betting dispute.

The commission decided the alleged bets were unlawful after hearing from Mr Ryan that BetEzy never accepted SMS bets.

It said BetEzy's rules only allowed it to take bets by telephone, internet or fax, unless it asked the commission for permission, and it had not done so.

There were also no betting slips or audit logs showing the alleged bets, as required by BetEzy's licence.

Under the NT's Unlawful Betting Act, it is a crime punishable by a fine of up to $2980 for a first offence to make an unlawful bet.

However, it would be necessary to show that the punter knew the bets were unlawful and it is believed Mr E would argue he relied upon the word of Mr Daniels.

Operating as an illegal bookmaker is punishable by a fine of up to $15,645 for a first offence, rising to three years in jail for a third breach.