Excerpt From Star City's Report to the Australian Gambling Inquiry

26 April 1999
The Implications of New Technologies such as the Internet

Gaming operations in Australia could dramatically change in the coming years as new technological advances take effect. Clearly, these developments have the potential to create an exciting new era in gaming if handled correctly. However, new technology also has the potential to cause major social problems if it is not accompanied by adequate controls.

Star City is already the most technologically advanced gaming operator in Australia. We have introduced a unique player rating system called PitTrak which enables gaming divisions to keep accurate data on the betting patterns of regular players. Patrons simply have their rating cards swiped through a machine when they begin playing to have their betting transactions recorded. This replaces the traditional manual system of writing such information on cards.

Another innovation aimed at helping both players and staff is PitCam. Small cameras are located on each table to record all play. In the event of a dispute the action can be replayed immediately to determine whether a mistake has been made.

Star City also has a sophisticated computer system operating the slot machine network and more than 1000 surveillance cameras monitoring tables and providing perimeter surveillance.

In other words, Star City has utilised some of the most advanced technological developments to improve safety, deter criminal and unsavoury behaviour, ensure the integrity of gaming operations and assist patrons and staff.

There is now a growing potential for new technology to expand the range and accessibility of gambling. Internet gambling is already here. More sophisticated telephone operations, interactive television and other advances are on the way.

While other developments such as Internet gambling have enormous potential they also have inherent dangers. These dangers have already been recognised by the United States Senate which has approved legislation to ban most forms of gambling on the Internet. In Australia, most State governments are taking a low key approach but have been quick to develop guidelines for the introduction of Internet gaming. It appears that most governments are reluctant to approve Internet gaming until adequate controls are in place to minimise the social consequences. But, at the same time, they do not want to be miss out on the financial benefits of on-line gaming so they are preparing guidelines and legislation in advance.

The Tasmanian Government has indicated that it wants to proceed with Internet gaming - but it would be available only to players in other States. Tasmanian residents would be prohibited from using the service. The Queensland Government announced recently that it would license Internet operators -and take 50 per cent of metered profits. The NSW Government has developed a model for Internet gaming and legislation could be introduced as early as 1999. The ACT Government is keen to secure part of the lucrative market and has indicated that the first licence could be issued this year. The Victorian Government is also well advanced in the preparation of an Internet regulatory model.

While all governments appear to have concerns about the social impact of on-line gaming, they cannot ignore the potential profits. Indeed, the Chicago Crime Commission has calculated that world Internet gaming will be worth about $35 billion a year by 2000.

Star City believes that Internet gaming in Australia requires adequate controls to prevent abuse. The potential for minors to bet on the Internet is of particular concern. Warnings should also be given to new players to bet sensibly before opening an Internet account. It is likely that technology will be developed which will allay many of these concerns in the year ahead. For instance, it is likely that some computer systems will be able to identify hand or finger prints as a way of accessing Internet gaming. Parents would, therefore, be able to prevent their children gaining access to on-line gaming.

The incidence of problem gambling is also likely to rise unless Internet gaming is properly controlled. At present, Star City offers a comprehensive responsible gaming strategy including advice on where patrons can seek help. It is crucial that any Internet provider be required to offer the same precautions. Many people are reluctant to leave their homes to go to a club or casino to bet alone. Others feel intimidated by the prospect of sitting at a gaming table with other players. There will be a temptation for many of these people to take the option of betting privately at home so the Internet has the potential to open up a vast new gaming market.

If controls can be developed to deal with these issues it is inevitable that Internet gaming will become a reality around the world. Australian governments will have little choice but to approve Internet operations - or lose revenue to other States.

The reality is, of course, that anyone can already set up a gaming operation on the Internet. In this sense, the US legislators have their head in the sand. Indeed, Internet gaming is already being advertised widely within Australia. A company called Golden Palace, based in Antigua operates a service which offers 28 games. These range from traditional casino games like Blackjack and Sic Bo through to simulated scratch lottery games and poker machines. The graphics on the games are very realistic and it is simple to sign up to play and pay.

Star City believes these Internet providers pose a real threat to traditional casinos, particularly those which have paid large licence fees. In NSW, for example, Star City has paid more than $250 million for the casino licence - yet anyone can set up an Internet service at minimal cost and no licence fee.

Star City believes the Federal Government should work with the States to restrict Internet licences to operators with a proven track record of reliability and integrity. By licensing Internet gaming, governments will continue to collect gaming taxes and maintain control over such operations. Patrons will also be protected from unscrupulous activities. Australian residents are much more likely to bet on the Internet with companies registered and licensed in Australia than with overseas operators.

New technologies such as the Internet will undoubtedly impact on the amount of money spent at traditional gaming venues such as casinos and clubs. Certainly, those players who do not wish to travel to venues - or those with only a short amount of time - will find it more convenient to play on the net. The overall amount of tax generated for governments is likely to rise significantly if Internet gaming is sanctioned and appropriate licensing is in place. If no such controls are put in place then Australian governments will risk suffering significant drops in gaming revenues.