Remember the days when Australia was looked upon as the perfect model for the regulation and cultivation of online gambling? Not so fast, says Prime Minister John Howard. Based on the findings of the Productivity Commission's report for the Inquiry into the Australian Gambling Industry, Prime Minister Howard has recommended a ban on Internet gambling.
The report, released to the public today, addresses the problem gambling epidemic in Australia by suggesting that the growth of gambling be curbed. According to Prime Minister Howard, the first priority in doing this is putting a stop to Net betting.
It's not a radical idea, in fact, the same approach was taken by the National Gambling Impact Study Commission in the United States. The Prime Minister's stance is unusual, however, in that he's seeking to take impose federal authority over an area that is strictly legislated by state governments.
"The regulation of gambling has traditionally been a state responsibility," the Prime Minister said. "It is not our desire to change this. The Commonwealth, however, does have a leadership role in coordinating a national response to problem gambling."
State government officials, as you might suppose, aren't pleased with the suggestion of a federal ban on Net betting. Several states, in fact, have recently implemented licensing schemes for online casinos and
sportsbooks, bringing in substantial licensing fees and tax revenues. Tasmanian Premier Bacon, who's state just passed legislation to regulate online gambling, told ABC Radio that the Prime Minister shouldn't interfere with gambling because it's a state issue. ACT Treasurer Humphries' added that such a ban would be impossible.
The Commission found that 290,000 problem gamers lost a combined total of $3.5 million annually. The average problem gambler lost $12,000 annually, compared to casual gamblers who lost $650 a year. The Commission also suggested the establishment of a ministerial council on gaming in order to develop a unified national approach for problem gambling, which the Prime Minister approved.
"I have written today to the Premiers and Chief Ministers proposing the establishment of a Ministerial Council on Gambling," the Prime Minister said. "It will focus on stopping the further expansion of gambling Australia, on the impacts of problem gambling on families and communities, on Internet gambling and on consumer protection."
The proposed council will look closely at Internet gambling. "Internet gambling has the potential to dramatically increase the number of problem gamblers because it will be accessible to every
household 24 hours a day," the Prime Minister said.
Peter Bridge, CEO of Northern Territory-based Lasseters Casino, the only company with a licensed operational online casino in Australia, welcomes the decision to create a Ministerial Council. "We trust the Council will take a long and rational view of the online gaming business and look at the consequences and benefits of regulating it, " Bridge said . He also said that he'll offer to assistance with the council.
Regardless of whether the government regulates online gaming, Australians will still be able to access offshore sites--not all of which are above board, Bridge pointed out.
Northern Territories Gaming Minister Tim Baldwin agrees. "To ban Internet gambling will simply mean Australians will place their Internet bets on overseas sites," he said. "That will not only strip the states, territories and Federal Government of taxation revenue, but will mean Australians are betting on Internet sites with few, if any, of the player protection measures that have developed for Australian sites--including those to assist in combating problem gambling."
The burning question, of course, is: Can the federal government succeed in prohibition?
Prime Minister Howard faces an uphill battle, considering that the Internet gambling industry has already established roots in Australia. Most states either have legislation in place or are in the process of passing legislation that legalizes and regulates online gambling.
Glenn Barry, a gaming industry consultant and commentator in Australia (and a regular contributor to IGN), is highly skeptical of the chances of a federal ban being adopted from a gambling standpoint, but suggests that the federal government will seek alternative ways to stop Net betting. "There's no doubt the states control gambling and the feds have no real say as the laws currently stand, however the Internet gets into the communications policy area, which is federal. That seems to be the possible opening for the feds to intervene. The other area may be the banking/credit angle."
Barry also believes that online gambling is taking the heat for the "real damage," which he says is being done by the slot industry. "I wouldn't be surprised if they are behind the scenes pointing the finger at cybergambling as the threat to distract attention from themselves," Barry said. "There has been a lot of heat aimed at cybergambling by the anti-lobby because it has been--or was--the softest target. Then you have some established gambling who fear it somewhat (i.e. real world slot operators and their suppliers). So far it's just a talk-fest and there is a lot happening that should be in place before the talk-fest ends.
As far as the pro-Net betting/anti- Net betting argument goes, much of the rhetoric mirrors that which has been tossed about in the U.S., although the anti-prohibition side of the debate been better accepted Down Under.
The state regulators are undivided in their position. "Prohibition is not the way to go," Minister Baldwin iterated in a media release issued today. "The consistent advice of the experts in this area is that prohibition would not work."