Australian Operators Respond to Moratorium Bil

6 December 2000
Yesterday's passing of the Australian Internet gambling moratorium has left the entire online gaming community Down Under shaken and angry. Once considered a legal activity, operating a licensed interactive casino has now been outlawed for many, say the Australian online casino operators caught in its snare. The yearlong moratorium, which is retrospective back to May 19 is likely to affect at least six online casino operators that launched sites after that date, as well as numerous other companies that have invested substantial funds obtaining a license and building future e-casinos.

Officials at Federal Hotels, for example, are up in arms over the moratorium. After having secured Tasmanian licenses to operate two online casinos, Wrest Point and Country Club, the company foresees huge losses when it closes the sites later this week. "The government has sat there and allowed us to invest $20 million and spend nearly two years developing this technology and now they're telling us that a legal activity is now an illegal activity," said Federal Managing Director Greg Farrell. Twenty employees could also be laid off because of the sites' closings. These layoffs are just the tip of the iceberg. Democratic Senator Natasha Stott Despoja has says the moratorium will cost 1,000 jobs in Tasmania alone--a figure that at least one opponent, Senator Bob Brown, scoffed at.

Further indicating their displeasure, officials from Federal Hotels may be seeking legal advice regarding whether the government has the power to implement the moratorium, and whether Federal Hotels could receive compensation as a result of the moratorium.

Another operator that will be forced to close is Tattersalls, which also received a license from Tasmania. Its' site,, began taking bets over the Internet in October. Also on the casualty list are Kerry Packer's two companies, Publishing & Broadcasting Ltd. and ecorp, which have yet to launch a site, although a considerable amount of time and money has been invested in their future online casino. Their plans are put on hold, and could potentially cost huge sums of money.

It's unlikely that any operators will defy the moratorium. Sites that don't comply will face stiff penalties, including fines up to $1.1 million per day for the company, and another $200,000 a day for senior executives. Not only are companies that launched their sites following the May 19 deadline affected, but any site operating previous to the date that has upgraded its technology or site after May 19 could also be affected.

This means that Lasseters Online will have to undo seven months of work in upgrading its offering. "The moratorium will prevent us from upgrading our site as new technology becomes available," lamented Lasseters Online managing director Peter Bridge. "It will also prevent us from extending the varieties of gaming products offered. This is critical to retaining and attracting players particularly as Internet usage grows in new markets worldwide."

He continued, "As responsible operators, we will comply with the moratorium. But we will be look at all our alternatives to ensure Lasseters Online can continue to grow. We expect to start seeing more operators moving offshore because of the position being taken by the Federal government in Australia."

Bridge also expressed concern that many Australians would begin gambling with offshore e-casinos, which was echoed during the Senate debates, especially by the Labor Party. In addition, some Senators attempted to either prevent the bill's passage or include amendments to the bill addressing their particular concerns. Stott Despoja, for example, failed to gain support for her amendment covering the moratorium's retrospectivity, and also proposing a public awareness campaign.

The Internet Industry Association lashed out at what officials there called an "unjustifiable and misdirected" decision by the effort in passing the moratorium bill. "While our association does not advocate gambling and has an established track record in promoting end-user welfare, we are seriously concerned that the government's efforts on this issue may backfire, driving Australians offshore into unregulated jurisdictions, with none of the safeguards that apply locally, even now," IIA Executive Director Peter Coroneos said.

Coroneos also said that the IIA will attempt to work with the government "to explore ways to prevent the moratorium escalating into a ban, which will have negative implications for mainstream e-commerce in Australia."

Some operators have been spared. Thanks to last minute amendments to the bill that ensured enough support for the moratorium to finally get pushed through, many sports betting operators can continue taking bets online. This allows, for example, the various state TABs to continue accepting Internet bets, and even the NSW TAB is getting set to launch its new online fixed-odds wagering service.

The moratorium will be effective until May 2001. During its final six months, the government will reportedly study whether a ban is feasible.