Australia Moves to Ban Online Gambling

27 March 2001
The Australian government announced today that it will look to permanently ban Internet gambling, a move that has operators crying foul.

The announcement comes as the end of the yearlong moratorium on online gaming draws to a close in May.

The proposed law would make it illegal for Australian operators to take bets from Australian residents, but it would enable them to continue operating using a customer base of players located outside Australia--a decision that did have some operators willing to listen.

"The federal government will shortly introduce legislation to prohibit Australian gambling service providers from providing online and interactive gambling and wagering services to people located in Australia," Communications Minister Richard Alston said in a prepared statement

If the government has its way--the ban must be passed by the Parliament--interactive gaming in Australia would cease to exist.

"The prohibition will apply to all gaming and wagering services, including poker machines, casino games, sports betting and lotteries, that are offered on a commercial basis over the Internet or through online delivery systems such as interactive television and advanced mobile phone technologies," Alston said.

As they have all along, operators and industry associations are claiming the ban will be unenforceable and cannot work.

The Australian Casino Association (ACA), an outspoken opponent to both the moratorium and a ban, argues that Australians will be able to find other avenues for gambling if they can't find them within their own borders.

"The simple fact is that Australians will still have access to hundreds of overseas sites that do not have the (same) high standards of customer protection in place as do Australian regulated sites," ACA Executive Director Chris Downy told Reuters.

Alston also wants Internet service providers to offer their Australian customers filters that can block access to foreign gambling sites. He said in his statement that allowing operators to still accept wagers from overseas could be a carrot in getting them to agree to the deal.

"The legislation will place the onus on gambling service providers to determine whether users are physically located in Australia and, if they are, to prevent them from accessing the gambling site," Alston said.

Shadow Youth Affairs Minister Kate Lundy, a member of the opposition Labor Party, feels the ban is the easy way out for a government which doesn't want to explore other technological options.

"The message the (government) is sending to the world is that we are. . . an IT backwater, prohibiting content because the government has no idea how to implement a workable policy that protects those most at risk without encumbering Internet development," Lundy told Reuters.

Peter Bridge, the managing director of online gambling for Lasseters, said his company was pleased with the consideration the government gave to allowing operators to still do business outside Australia.

"We operate in 210 countries, and Australia is a very small part of our business," Bridge said.

Downy, meanwhile, feels the government could have saved a lot of time and trouble if they would have considered a similar move prior to imposing the moratorium.

"We have always said that the Internet casino industry is predominantly an e-commerce export industry and that the vast majority of our customers are based overseas," he said. "If the government had listened to the industry in the first place, companies who have invested millions of dollars in research and development need not have ceased operations because of the government's decision to introduce a moratorium--there was no need for that."

Bridge does find it ironic though that the government is telling the industry it is OK to stay in business as long as you don’t get your customers from Australia.

"If the filtering is voluntary it will have very little effect," he told the AAP. "It’s hypocritical that Australians are being denied the higher forms of player protection measures that are on offer here."

An official with Tabcorp Holdings Ltd., an interactive betting firm based in Australia, echoed the sentiments of the ACA. "If the objective is to protect Australians then. . . what we have seen today doesn’t achieve that," a spokeswoman for Tabcorp told the Dow Jones Newswires. "It boils down to offshore operators being able to provide Internet gambling services to Australians while Australian companies, which are the ones that can be regulated by the Australian government, are not being able to do so," she said.

As one of Australia’s largest gambling companies, Tabcorp feels Aussie firms are being treated unfairly.

"In our view it's illogical and it discriminates against Australian companies," the spokesperson added.

In his statement, Alston said the reason for the move is to continue the government’s role as a leader in helping problem gamblers.

"While it is a matter for other countries to decide how they will approach online gambling," he said. "Australia’s status as one of the world’s leading problem gambling nations demands that we take decisive action to protect the most vulnerable in the community."