Is Competition Healthy in Australia?

5 April 1999
It's yet another example of the accelerated crisscrossing of the online and traditional gaming industries. Casino Journal's National Gaming Summary, a publication that itself exemplifies this crisscrossing, reports that representatives of the Australian gaming industry are asking for deregulation in order to compete with the online gaming industry.

The plea was made in a report submitted to the Australian Productivity Commission's inquiry into Australia's gambling industries by ACIL Consulting. According to the report, gambling operators are suffering because they're dealing with tax rates of 60 percent to 70 percent, while Internet gaming operators in Australia are looking at tax rates of 50 percent and lower. (Jeez, the U.S. government is really missing the boat here.)

On the gaming tax rates in general, ACIL reports, "The rates of tax on other goods and services as well as other forms of entertainment are generally much lower than those on gambling. … Our view is that the gambling industry has become a victim of the narrow taxation bases available to state and territory governments."

It also seeks to downplay the existence of problem gambling, the basis behind heavy regulation in Australia. "It is wrong to blame gambling as an industry for difficulties experienced by a small number of people with deep-seated personality disorders," the report said. "There are many reasons for thinking it is not as grave a problem as it is commonly portrayed."

For those keeping score, ACIL's presentation was partially funded by Star City and Jupiters. Both Australian casino operators are partially owned by U.S.-based corporations (Harrah's and Hilton, respectively) and both have an interest in the online gaming industry. (Jupiters owns Centrebet online sportsbook and Star City has expressed and interest in launching an online casino.)