A Victorian Gambling and Casino Control Commission investigation exposed Tabcorp repeatedly breaching its betting licence and the responsible gambling code between August 2020 and February 2023.
In one instance, a Tabcorp account manager placed a "responsible gambling call" to the customer whose betting patterns were flagged as potentially concerning by its own monitoring systems.
The call ended with the manager communicating that a deposit-match promotion of $2000 would be allocated to the customer's account.
The incident was indicative of a culture of Tabcorp not taking seriously its harm minimisation obligations, commission chair Fran Thorn said.
"The recorded call provides evidence of a lack of commitment to responsible gambling policies and demonstrates a lack of concern for the customer's wellbeing," she said.
"Instead of offering support or making suggestions to help the customer manage their gambling, the call was used as an opportunity to encourage them to continue gambling."
Other breaches include sending direct marketing material to a customer six times between October 2022 and February 2023 after they had opted out, and failing to minimise the potential for gambling harm through inadequate training of employees.
While Tabcorp co-operated with the investigation, Ms Thorn said the breaches reflect systemic operational deficiencies and non-compliance with its licence conditions and resulted in "significant harm" to a customer.
"The hefty fine, the largest the commission has ever issued to Tabcorp, is proportionate to the seriousness of the licensee's misconduct," she said.
"It sends a clear message to the gambling industry that this kind of behaviour is not acceptable and will not be tolerated."
Tabcorp has been directed to clean up its act, with the watchdog vowing to actively monitor the implementation and effectiveness of a new program to overhaul its operations.
The company has been contacted for comment.