An American's Response to Australian Glenn Barry's Recent Comment on the Queensland Statute

3 July 1998

Congratulations to Glenn Barry (IGN's Mr. Nambling) for commenting on what I agree are certain realities in the new Queensland "Interactive Gambling (Player Protection) Act 1998". The new law is not a deregulation, no-holds-barred statute. It is not a decriminalization, anything-goes statute. It is what its title says that it is: one Australian State's attempt to protect its citizens and to confront the realities of Internet gambling.

As subscribers to IGN know, I have recently published two articles focussing on the Australian model for regulating Internet gambling. [Under the general title of "Internet Gambling - Problems and Opportunities", the first is entitled "Separate Approaches in Australia and the United States" and the second is called "Australia's Current Efforts to Legalize and Control Internet Gambling".] I am in the process of preparing a third article, which delves extensively into the matters raised by Mr. Barry. But given Mr. Barry's article "Queensland Law Not What It Seems", I thought it timely to make the following observations:

Types of gambling

In setting forth a method of permitting, and indeed proactively supporting, interactive gambling, Queensland has not given up its right to determine what types of gambling will or will not be sanctioned:

    (A) for operation by those interactive gambling service providers who obtain a Queensland license, and
    (B) for participation by Queensland residents.

Queensland's Authority

In establishing a means to enter into reciprocal agreements with another like-minded government ("participating jurisdictions"), Queensland reserves the right to review the policy and standards of the other government and decide

    (A) not to grant "participating jurisdiction" status;
    (B) to insist on conditions in the intergovernmental agreement between the two jurisdictions; and
    (C) to limit what games would be welcome in Queensland and the rules of such games, and so forth.

Legal Exclusions

The Queensland statute, itself, already exercises policy judgements in this regard: it excludes from the new law (by excluding from the definition of "Interactive Game"):

"...activities by way of, or incidental to, wagering authorized under the Racing and Betting Act 1980 or the Wagering Act 1998 if the activities are of a kind authorized under [this] Act at the commencement of this section..."

In practical terms, I take this to mean that all telephone wagering and similar activities currently engaged in, by Queensland TAB or by licensed bookmakers in Queensland, will not be available as permissible activities within this State to anyone other than the current operators. Put another way, unless the ISP is in one of these protected groups, it will not be able to take advantage of the new statute to operate horserace betting or sports wagering to or from Queensland.

Objectives of the Law

The primary purposes of the new law are clearly set forth in its "Objects". These are, in part, "to regulate and control...interactive gambling...; to provide protection for players of interactive games; and to provide a basis for implementing... the reciprocal recognition between participating jurisdictions..., the regulation and control of interactive gambling..., and the sharing of tax derived from interactive gambling on an equitable basis".

Queensland is not giving up its right to examine the probity of any applicant for an ISP license or to test the equipment and system that the applicant proposes to utilize. Rather, Queensland is proposing that, where there are jurisdictions with the same investigative standards, there is no need for both to conduct the same investigations. They can enter into reciprocity agreements, recognizing each other's licensees.

Of course, Queensland, through the Minister responsible for Gambling, may opt not to exercise any or all of these options to review, limit, and/or strictly regulate. But the Minister has the right to do so and can be expected to act in accordance with the Queensland government's view of what is in the "public interest" for Queensland.

Off-Shore Options

It seems to me, therefore, that if a "Caribbean Cybercasino" (in Mr. Barry's phrase) wished to avail itself of the new Queensland statute (including the ability to lawfully advertise and promote its products in Queensland), it has only two options:

    A - It can seek to have the country under which it is licensed become a "participating jurisdiction" in cooperation with Queensland; or

    B - It can directly apply for a Queensland license, subject to all the rigorous regulatory conditions for licensing and gaming that Queensland will hereafter adopt.

In either case, Queensland will expect to receive an equitable share of the revenue generated from Queensland residents.

If Cybercasinos are unwilling or unable to undertake either of these two options, they will remain in a status not unlike the current status of such interactive operators with relation to accepting bets from residents in the United States - taking their chances as to

    (a) what current law actually means,
    (b) whether they are in violation of that current law when acting totally from a foreign shore, and
    (c) if they are technically in violation, whether in a practical sense they can be reached for sanction by the offended government.

Michael Shagan is an attorney and full-time legal/business consultant, primarily to the racing and wagering industries. He welcomes all comments. Please e-mail him at