Aussie Government Completes IGA Review - No Changes to Be Made

12 July 2004

Australia's federal government ended weeks of rumors today by making it official: No changes will be made to the 2001 Interactive Gambling Act (IGA).

"I call on the states and territories to recognize their responsibilities and investigate opportunities to strengthen their licensing regimes across all wagering services."
-Daryl Williams

The decision's impact in the short term will be felt most by the bookmaking industry, which lobbied heavily for a ban on betting exchanges. By not amending the IGA to include such a ban, the government has essentially opened up the Australian market to betting exchange suppliers.

Today's announcement, made by Communications Minister Daryl Williams, caps a prescribed yearlong review of the IGA.

As part of the review, which included submissions from nearly 50 companies and trade groups, it was decided that no specific regulatory action in relation to betting exchanges was needed.

Instead, Williams said, the matter will remain in the hands of the individual states and territories.

"This decision doesn't prevent each state and territory from issuing--or restricting--interactive wagering and betting exchange services," Williams explained.

The IGA was passed in 2001 with the aim of preventing the escalation of problem gambling in Australia. Many lawmakers argued at the time that the policy was needed to prevent the growth of gambling--and subsequently problem gambling--through online channels.

The Department of Communications, Information Technology and the Arts (DCITA) spent more than a year on the mandated review. Williams said an official report will be published shortly. Its primary focus, he said, was determining if and how problem gambling should be addressed by amending the legislation.

He said the review team found "no compelling evidence" to suggest that betting exchanges were likely to contribute to an increase in the level of problem gambling in Australia.

As many in the interactive gaming industry have argued for years, the review also pointed out that consumer protection measures can be introduced in an online gambling environment that are impossible to create in a land-based setting. Williams said the enhanced measures are best carried out through existing state and territory licensing regimes.

"I call on the states and territories to recognize their responsibilities and investigate opportunities to strengthen their licensing regimes across all wagering services," Williams said.

The official decision is a major victory for leading betting exchange Betfair, which spent the last 18 months lobbying for regulated betting exchanges in Australia.

On the other side of the coin are the land-based bookmakers, as well as some in the racing industry, who argue that exchanges have an unfair advantage and don't put enough of their revenue back into the racing industry.

Officials with Betfair, however, have consistently stated that they will put as much back into the industry as land-based bookmakers do if they're granted a license to operate.

The racing industry, meanwhile, has cited concerns over integrity. Betfair has addressed these concerns by policing itself and reporting suspicious betting to racing officials, but opponents of betting exchanges don't think this is enough.

Australian racing officials argue that both British and Asian racing were damaged after the introduction of Internet betting. But in the end, racing's arguments didn't hold water with government officials, and Australia's TABs are indicating that they'll set up betting exchange networks to compete with Betfair and other industry leaders.

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