While most of those who oppose banning online gambling in Australia have concentrated on how the state and territorial governments will lose tax dollars--resulting at the very least in decreased funding for problem gambling services--less attention has been paid to how the ban will cost the country in other ways.
In the midst of the battle, major interactive gaming companies are threatening to leave Australia for friendlier shores. Most recently, Kerry Packer's Publishing and Broadcast group, along with its partner e-corp, said it would probably relocate to Vanuatu.
"There has been no final decision, but that is certainly the most likely destination," a PBL top executive told The Sydney Morning Herald. PBL execs are waiting for the final outcome of voting on the Internet Gaming Moratorium 2001 bill--likely to come next month--before making their final decision.
PBL currently holds an interactive gaming license from Tasmania, but has been unable to launch the site because of the recently ended yearlong moratorium that prevented the introduction of new gaming sites. So far the company has reportedly invested more than A$10 million on the dormant site. Executives are expecting to reap A$50 million during the first year of its anticipated operation.
The federal government for months has confused Aussie Net betting companies, keeping them from knowing which way is up, much less whether their services will remain legal. PBL executives decided the uncertainty was too much to bear and began researching other online gaming jurisdictions around the world.
"The Internet gaming team has been looking at locations in Vanuatu for some time as we've watched the Australian federal legislation on Internet gaming," the PBL executive confirmed.
In Vanuatu, the company would benefit from a low 2.5 percent taxation rate, while remaining at a location relatively close to its Australian roots. Plus, applying for a license only costs US$750,000, while the annual license fee runs US$50,000--a drop in the bucket compared to what the company paid for its yet-to-be-launched Tasmanian Net betting operations.
Meanwhile, the federal government is saying that PBL's move to Vanuatu, which would have the company's profits returned to Australia, might not be such a great idea. "If an organization operates completely offshore, and if all their decision-making is made overseas, then it would be possible, including the investment and the revenue, to come back to Australia," Senator Lyn Allison told The Age. "But if there was any decision-making in Australia, then it would be deemed an Australian company."
Bookmaking firm Canbet has recently threatened to take its business outside Australia as well. The company says it will relocate to the United Kingdom if the government decides to include sports betting in the moratorium--an issue that has been bandied back and forth in recent months. The Age reported yesterday that, while the ban would cover all online gambling services within Australia, it appears that negotiations with Democrats may spare sports and race betting services. If so, then Canbet may decide to stay home.
In further news, The Herald Sun reported today that the effect of a permanent ban on interactive gambling pass could trickle down to state TABs. Australian Racing Board CEO Andrew Harding predicts that many punters would drop the TABs in favor of offshore betting sites, resulting in some grim statistics for the racing industry over the next 10 years:
- Turnover at TABs would probably drop $2.54 billion.
- Funds being distributed to the industry would probably drop by $115 million.
- Racing prize monies would probably fall by $115 million.
- Governments would probably see $120 million less in revenues from these sources.