Australia's Gaming Industries

20 April 1999
The Productivity Commission, an independent commonwealth agency that serves as the Australian government's principal review and advisory body on microeconomic policy and regulation, has undertaken a national public inquiry into the country's gambling industries. From time to time IGN will be posting documentation of testimonies and reports regarding Internet gaming submitted to the inquiry. Our last probe examined the efforts of South Australia Senator Grant Chapman. This time around, we look at the March 1999 submission by ACIL Consulting.

The 252 page report, covering all of Australia's gaming industries, was funded by Crown Limited, Jupiters Limited, Star City Casino, TABCORP Holdings Limited, TAB Limited and Tattersall's. Most (if not all) of these companies, incidentally, have shown an interest in getting involved with online gambling. It should be noted, however, that the report is exclusively based on the views of ACIL and not the companies funding the project.

Both the report and ACIL's testimony before the inquiry focus on the positives drawn from the revenue generated by gambling and specifically call for deregulation and the lowering of gambling taxes to help the industry expand. They also point out that the Australian government tries to paint a negative picture of gaming, yet benefits greatly from the industry because of the extremely high tax rates.

The Internet gaming portion of the report (Chapter 10) is well researched and informative, and delivers a useful synopsis of the industry. It's generally accurate, with the exception of the statement that there are 35 to 40 sites currently offering online wagering. (In actuality, at the time it was submitted, there were at least 300 domains offering bets online.)

Regarding the Internet, ACIL opens discussion on taxation (an issue that sparked some debate between ACIL and the inquiry panel) and whether it's feasible to tax online gaming operators. They warn that taxes will have to be minimized in order for Australian operators to compete with operators in tax-free Caribbean jurisdictions. The hearing also featured discussion (and plenty of disagreement) on the role that the commonwealth and federal governments would play in the taxation process.

Also covered in the report are the regulation of e-commerce; encryption and security; an analysis of legislation in Queensland, the ACT and the Northern Territory; an analysis of the National Regulatory Model for interactive gaming drafted by Australian state and territory racing and gaming ministers; an overview of developments in the U.S.; and underage and problem gambling.

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