Monday, 25 March 2013

The Online Gambling Review

Written by

Two years of work, pretty much nothing to show for it. 

Two weeks ago, the Federal Government released a report that has been almost two years in the making. At more than 180 pages long, the Review of the Interactive Gambling Act 2001 contains 32 recommendations for changes to the laws regulating all forms of online gambling in Australia. It was informed by evidence provided in dozens of submissions from academics, counsellors, industry representatives and private individuals, as well as hearings held in every state and territory around the country.

This should have been something of a big deal. The Interactive Gambling Act (IGA) is the only Act this country has that deals directly with online gambling, and it’s woefully out of date. Consider the online landscape in 2001: MSN and Yahoo! ruled the web; NeoPets was bigger than Google; and MySpace, YouTube and Facebook were still several years away. Not only that, but it would be six years before the iPhone saw the light of day. The internet of 12 years ago, and the way we used it, has changed beyond all recognition; it’s obvious that our laws need to change to keep pace.

Instead: blink, and you would have missed it. On the same day the review was released, the government also released their proposed media reforms; the ensuing backlash from News Ltd papers effectively buried the gambling act review, in much the same way as the recent “spill-that-wasn’t” overshadowed the government’s Forced Adoption apology.

That’s not to say that the review was completely ignored. There was a smattering of articles and the usual suspects had their say -  turns out that everyone hated it. Online bookmakers and betting agencies thought it went too far, while gambling critics (such as Nick Xenophon and Andrew Wilkie) thought it didn’t go far enough. Predictable reactions, to be honest and not really enough on which to base an informed opinion.

So what’s the truth of the matter? What will this long-overdue review mean to you, me and the bloke next door? Where do we go from here?

Let’s take a look.

Background
When it was introduced, the IGA effectively made it illegal to offer online gambling (with the exception of sports betting ) services in Australia. Australian gambling websites were prohibited and overseas gambling websites that offered their services to Australians were theoretically subject to fines of up to $1.1 million a day. The act of actually gambling online was NOT made an offence; the focus was on the industry, not the gamblers.

The advertising of prohibited online gambling services was, naturally enough, also illegal; so too was “in-play” betting on the internet. “In-play” betting refers to bets placed on sporting events after they have already started and, while this is legal when done in person or over the phone, it is illegal to do so online.

The IGA has proven to be a toothless tiger. International casino websites completely ignored the ban and the threat of fines, and continued to operate in Australian digital space. In the ten years since the IGA was introduced, not a single fine has been imposed. The only impact was that no Australian company could offer online casino gambling… so all the money lost has gone offshore, and Australian gamblers are taking an even bigger risk by using sites that do not have to comply with Australian laws and regulations. According to the review report, roughly $1 billion is spent by Australians every year on up to 2,200 international online casino sites. This is not a door that can be closed.

The Review
The review of the IGA can effectively be condensed to three key points, which are:

  • The creation of a national standard that establishes a framework for harm minimisation and consumer protection. This process would involve input from states and territories, and be incorporated into state/territory legislation. The standard should include pre-commitment capability, age verification requirements and self-exclusion schemes, as well as a range of other measures.
  • The ban on online casino sites should continue, but a trial of online tournament poker sites should be allowed. This trial would be dependent upon the creation of the national harm minimisation standard.
  • Online “in-play” betting could be legalised by state/territory governments; however, micro-betting on sporting events should be banned completely. This means that even placing micro-bets in person at a physical outlet would be illegal. These changes would also be dependent upon the creation of the national harm minimisation standard.

That’s pretty much it. There’s a lot of other guff about advertising, and ACMA, and the creation of an industry code, but none of that will actually have much of an impact on you or me.

What It All Means
Sadly, the report boils down to little more than a stalling exercise. There’s very little difference between this report and the draft report that was released in May 2012; the key is that all of the recommendations that would actually have an impact one way or another are dependent upon the formulation of the national harm minimisation standard.

And the report is quite clear that the standard would not be the sole responsibility of the Federal Government, but would need the involvement of all state and territory governments. That means that until all levels of government can sit down with representatives from the industry and relevant community groups to hammer out a national standard that they all agree on, and pass that standard into law separately for each state or territory, nothing else will change.

Business as usual
With a Federal election only six months away, there is absolutely no chance that this national standard will be formulated before a potential change in government. And if THAT happens (as most pundits are predicting), then all bets are off. Or rather, on. The Coalition has flatly refused to consider any changes to the IGA that could be considered to “weaken the current prohibition on online gambling”; if they form government later this year, then this report and every recommendation it contains will be permanently buried.

Similarly, the legalisation of online in-play betting and the banning of ALL micro-betting on sporting events are also dependent upon the national standard. Neither will progress until the standard is put together... so we may as well kiss them goodbye as well.

And as for the trial of online tournament poker? It will go the way of the mandatory pre-commitment trial in the ACT... swallowed by a quagmire of self-interest and obfuscation.

The one thing that the government could have, and should have, done with this review was to take the bull by the horns. The regulation of online gambling is NOT a matter for the states and territories; the internet does not recognise state borders and it’s seriously foolish to try to force local legislation to deal with a national, even global, problem. Instead, the government has refused to deal with the issue themselves and passed the buck to the state governments; the result is a stalemate.

By insisting that states and territories regulate online gambling in their own jurisdictions, the Federal Government has equated online gambling with other physical forms of gambling; notably poker machines. But the differences between the two are too great for this to make any sense. A national standard should be the responsibility of the Federal government; that would allow for consistency of legislation across the country and a simplicity that a myriad of state-based laws couldn’t hope to match. It would also remove the stumbling block that every other recommendation is waiting on.

They’ve made a nonsense of this entire review and ensured that none of the recommendations that might actually make a difference (for better or for worse) will ever get up.

It’s sad and not a little ironic that a government that owes its existence to a deal struck to regulate gambling (a deal it later walked away from) can spend two years reviewing gambling legislation and have so little to show for it.

Tom Cummings

Tom Cummings is a former problem gambler and advocate for gambling reform. He blogs about gambling and is running a gambling reform campaign (with a petition you should sign at www.clubpubfail.com)

Follow Tom on twitter @cyenne40

www.cyenne.com