Change in Store Down Under?

17 January 2003

Nearly two years after the banning of online casinos in Australia, a movement is affront to re-introduce the industry in the jurisdiction.

Later this quarter the federal government will undergo a review of its Internet gambling law, which currently prohibits Australian residents and operators from accessing one another while each are allowed to seek services and customers based outside of the country.

The Australian Casino Association is expected to urge the federal government to remove those restrictions and introduce a regime similar to that of the one in place prior to the enactment of the Interactive Gaming Act in 2001.

Under the laws introduced in 2001, local cyber casinos must deal only with foreign gamblers. Those laws were passed at the end of a one-year moratorium on the issuance of new licenses for online casinos. Before 2000, Australia was considered by many to be the world's leading jurisdiction for highly regulated, licensed online casinos.

Australian Casino Association executive director Chris Downy told the Herald Sun that his group will probably be asked to submit a formal report to the government as part of the review and asking them reverse the ban will probably be at the top of the list.

"We will look at the government's issues paper before making any decisions on what goes in our submission," he said. "But on that issue our position has never changed."

At the other end of the spectrum is the Australian horseracing industry, which was been excluded from the ban and has leveraged its exemption to gain a bigger share of the betting dollar over the last two years.

The racing industry also successfully lobbied for a clause that prohibited overseas bookmakers from carrying odds for Australian races.

Australian Racing Board chief executive Andrew Harding said offshore betting sites were taking bets on local races but paying no turnover tax to the local industry.

Other groups, namely the Interchurch Gambling Taskforce, said they would push for additional laws to further cut down on the amount of Internet gambling conducted in Australia. John Dalziel, the chairman of the taskforce, said the group would push for amendments that would force banks to refuse credit card transactions from offshore gambling sites.

Communications Minister Richard Alston announced the review, which is required after two years as part of passing the original Act, earlier this week.

Alston said the Department of Communications, Information Technology and the Arts (DCITA) is preparing an issues paper as a guide for members of the public and organizations wanting to comment on interactive gambling laws introduced by the government in 2001.

The Interactive Gambling Act 2001 was introduced in response to community concerns about the availability and accessibility of online gambling in Australia, according to a statement released by the DCITA. Alston said the review is an important element of the government's approach to preventing the escalation of the harmful effects of gambling on Australian communities.

Under the act, it is an offense to provide an interactive gaming service to customers in Australia and to advertise such services--including online casino-style services involving games of chance or mixed chance and skill, such as roulette, poker, craps, online poker machines and blackjack. However, services such as telephone betting, wagering (sports and racing), lottery services, certain Corporations Law contracts and services with a designated broadcasting or data casting link are exempted under the Act.

The review, required under section 68 of the Act, will assess the effectiveness of the Act in dealing with the social and commercial impact of these services.

The review will consider the current exemptions under the Act and any relevant technological developments. It will also consider matters associated with the enforceability of financial agreements relating to interactive gambling services under section 69A of the Act. Section 69 allows the drafting regulations to render unenforceable agreements that provide for the payment of money for the supply of illegal interactive gambling services.

As part of the DCITA's review process, industry and community groups will be consulted and submissions from interested parties will be welcomed. The department will likely also seek external expertise on the broad range of matters to be dealt with under the review.

The review will start within the next two months and is scheduled to last through the remainder of 2003.