Minutes of the OLGAA Meeting of Monday, 24 August 1998

held at Level 8, Gateway, 1 Macquarie Place, Sydney

Meeting: Issues discussed.

The proceedings commenced at approximately 5.30 p.m. Jamie Nettleton as Chairman gave a welcome address and introduced Steve Toneguzzo who also thanked the participants for coming and Jamie for providing the venue.

Steve Toneguzzo then requested the participants to introduce themselves briefly, which they accordingly did. Steven Toneguzzo then introduced David Ford from the Queensland Office of Gaming Regulation who was the key speaker for the night.

Summary of David Ford's Talk

Ford began by outlining the difficulties in relation to the regulation of internet gaming from a regulator's perspective. First, jurisdictional difficulties exist with each jurisdiction having different ideas as to what regulatory and taxation schemes should be in place. There are also problems in meeting all the interests of the various gaming interest groups. Despite this, Ford stated that there were lots of benefits in regulating the gaming industry and that, in fact, regulation is the only alternative.

It was stated that the National Regulatory Model for Interactive Home Gaming Products was introduced on 23 May 1997. The Queensland Government was the first to draft legislation built on this national model which sets out to license participants.

Ford then noted that the Queensland Interactive Gambling (Player Protection) Bill 1998 was introduced into Queensland Parliament on 5 March - the first Australian legislation to regulate internet gaming. The legislation introduces a concept of a cooperative scheme between Queensland and other participating jurisdictions for the regulation and control of interactive gambling. However, the legislation makes it clear that Queensland is prepared to regulate interactive gambling on its own.

The Queensland approach is flexible, providing for licences granted in one State to operate throughout Australia, standards in regard to the correctness of software, internal controls and player protection (through mandatory registration, self and third party exclusion). There would also be self-imposed betting limits.

He indicated that one of the problems arising from the uniform approach was the co-operation of each State, particularly in relation to taxation.

Ford also referred to a draft technical standards document which will be available on the QGR internet site. This should be available to all applicants in September.

Ford then outlined the position of other States.

1. ACT legislation based on the Queensland model has been introduced.
2. Victoria and South Australia: In the process of drafting legislation.
3. Western Australia: Opposed to the whole notion of internet gaming and might look at prohibition.
4. New South Wales is conducting a Parliamentary Commission Inquiry into internet gaming, therefore nothing will happen to the end of the year.
5. Tasmania and Northern Territory: Acknowledge receipt of the issue, with an extension of existing gaming registration to current licensees.

David Ford then addressed the key regulatory problems:

1. Kyl Bill: This Bill is entirely irrelevant to the Australian position and has no influence on regulatory discussions in Australia. However, it was noted that it would be interesting to see what happens if the Bill is passed through Congress.
   
   
2. Tax Rates: There are a number of different models as to how internet gaming should be taxed.
   
   
3. Revenue to the States: One idea is that the rate should be similar to that imposed on Casinos, however this is problematic. A better idea is that a single consistent rate be payable for all interactive games. It was noted that we may need to look at lowering the tax rates.
   
   
4. Exclusivity amongst States: Various parties have been granted exclusivities in different state jurisdictions (which overlap). Each of these exclusivities is a very valuable commodity in its exclusivity. This is problematic as owners are reluctant, understandably to relinquish these exclusive rights.

Goals and objectives of OLGAA:

David Ford concluded that:

1. OLGAA can be an honest broker between individual participants and Government providing advantages to both parties.
   
   
2. We are moving into a period where the reputation of the gambling industry is about to go into a slide. OLGAA can halt this slide by assisting government, regulators and participants in achieving honest gambling practices. Thus, OLGAA can help community acceptance of gambling which has a huge social benefit.

Forms expressing interest in membership of OLGAA were then circulated. Steve Toneguzzo presented the mission statement and objectives of the Association to the meeting and asked for comments.

In relation to the mission to: "promote Australia as the world leader in responsible and regulated online gambling", the following issues arose:

1. Should the word "gambling" or "gaming" or "wagering" or a combination of these be used? Jim Colquhon said that the distinction must be made as there is a clear distinction between these terms in ACT and New South Wales.
   
   
2. Should OLGAA include "Australia and New Zealand" or just "Australia"?

After much discussion it was agreed that it should include Australia and New Zealand and that the word "gambling" should stand.

The Chairman then asked the meeting to address the objectives of the Association.

1. The first objective of OLGAA, namely to "lobby Government for consistency and clarity of legislation, regulations and standards". Unanimously agreed.
2. The second objective - "establish, maintain and update codes of conduct for industry participants". Unanimously agreed.
3. The third objective - "identify and resolve matters of concern to the community, government and industry". Unanimously agreed.
4. The fourth objective - "support the community in researching, assessing, identifying and implementing responsible practices". Problems of reliability of research and funding such activities were discussed, however it was agreed the objective was sound in principle.
5. The fifth objective - "provide information relating to the implications of technology for the gambling industry to participants, regulators, and other interested parties. Unanimously agreed.

After finalising the objectives, there was further discussion. The Chairman asked who should be the members of OLGAA. A point was raised that the organisation would lose its creditability if a member violated codes of conduct. The Chairman pointed out that a criterion of membership could be continued compliance with OLGAA's rules and regulations.

There was then further discussion prompted by Terry Lillis of Centrebet in relation to whether Australia and New Zealand should be involved. After a show of hands, it was decided that Australia and New Zealand should be involved.

The Chairman then raised the issue of the further development of the Association. The Chairman noted that this involved 3 questions:

1. Who and how many people should be involved?
   
   
2. What issues should the Committee consider?
   
   
3. When should the next meeting of OLGAA be held?

It was considered that a Steering Committee should be formed to consider these questions and then report to the members.

Nominations were taken and it was decided that the Steering Committee would consist of Jim Colquhon, Terry Lillis, Jenny Thompson, Simon Townsend, David Ohlson, Steve Toneguzzo, Jamie Nettleton and Jon Moss.

Suggestions concerning further issues to be considered by the Steering Committee were as follows:

1. Probity of the Board and the Group.
2. Articles of Association. (Rules and structure of membership).
3. A realistic player identification.
4. Networking facility - newsgroups.
5. Code of conduct for marketing and promotion.
6. Market research and information on competitors.
7. Classes of membership.
8. Charge rates and business plan (corporate secretariat).
9. General code of conduct.
10. Standards for verifying software and systems.

The Chairman concluded the meeting by thanking everybody for attending the meeting and indicated that the attendance and contributions suggested that OLGAA clearly has a purpose.

There being no further business the meeting closed.