Betfair Calls For End To Australian Online Poker Ban

[dave nz]

27 Apr, 2009 / GamblingCompliance Ltd. / James Kilsby

Betting exchange operator Betfair has called on the Australian government to introduce reforms to allow online poker and casino games as part of its submission to a major public consultation process on the future direction of the gambling industry Down Under.
Betfair echoed calls by other interest groups for a root and branch rethink of Australia’s 2001 Interactive Gambling Act in its submission to the consultation process being conducted by the federal government’s Productivity Commission.

The company has called upon the government to amend the 2001 Act to allow online casino games and poker, as well change the rules to allow the betting exchange operator to accept in-running bets. The poker and casino prohibition has proved unenforceable, according to Betfair, leading large numbers of Australians to set up accounts to play online poker via websites based outside the country, instead of with locally-regulated internet betting providers.

Australians spend around A$300m per year gambling on foreign poker sites, Betfair estimates in its submission. “Poker has undergone a phenomenal rise in popularity in recent years, and as a result, more and more poker and other card game players are turning to the web.

“It is illegal to offer online poker to Australian residents, but that hasn’t prevented several large international operators from creating an enormous customer base here – assisted by promotional activities using high profile Australians and cross-selling through ‘play for free’ sites. It is estimated that more than $300m is bet by Australians annually on online poker – and it’s a figure that is rapidly growing.

“All revenues flow directly offshore without any tax being paid in Australia. Furthermore, players are gambling in a largely unregulated environment, with little protection offered to players in terms of fraud, security or harm minimisation. The ban on offering interactive gaming to Australians has had very little effect on curtailing the enormous growth of that sector of the market in Australia.

“Betfair advocates an approach based on regulation, rather than attempts to prohibit the activity. Only through regulation can effective player protection initiatives be enforced in the online environment.”

Betfair also believes that a number of Australians set up accounts with foreign companies to indulge in in-running betting, which licensed operators such as Betfair are equally prohibiting from offering in accordance with the Interactive Gambling Act.

“Australia is the only jurisdiction in the world that allows online wagering on sport but at the same time prevents punters from using the internet to place in-play bets. To put it another way, except in Australia, wherever it is legal to place a wager over the internet, it is also legal to do so in-play on a racing or sporting event.

“Because there is no law against someone in Australia betting online in-play on sport (the prohibition is directed solely at the operator) there is a large incentive for Australians to bet with these overseas operators. As a result, licensed Australian wagering operators are permanently losing the business of punters who are lured to these sites by offering in-play sports betting online. This means that transactions are not regulated in Australia, there is no requirement to place appropriate social harm minimisation measures in place and no taxes or product fees are returned to governments or sporting bodies.”

Prime Minister Kevin Rudd last year called upon the Productivity Commission to update a 1999 study into the prevalence of problem gambling in Australia, as well as coordinate a major review of state- and federal-level gambling policy in the country.

The review comes at a decisive moment in the history of the Australian gambling sector. Though internet poker and casino gambling remains prohibited under the 2001 Act, the online wagering sector has effectively already been reshaped by the landmark High Court decision last year on a case between Betfair and the state government in Western Australia.

Meanwhile, in the land-based industry, alleged links between poker machines and gambling addiction have led to calls for tighter regulatory control over machine gambling in Australian casinos, clubs and pubs.

In its own submission to the Productivity Commission however, industry group Clubs Australia labels internet gambling a greater social threat than poker machines. Internet gambling should be subject to federal regulation, Clubs Australia argues, with operators bound to equally stringent player protection rules as those in place for Australia’s land-based sector, and also prohibited from advertising their on television, radio or in print.

Clubs Australia states: “The Interactive Gambling Act 2001 proscribes the operation of ‘casino-style’ internet gambling in Australia, including by foreign-based companies. However, Clubs Australia is aware that casino-style gambling is being accessed by Australians.

“Although the Act’s intentions are laudable, its lack of enforcement – coupled with the increasingly heavy regulation of land-based gambling operators – means that problem gamblers are moving to unmonitored, unregulated online and mobile-phone-based providers, sometimes located offshore.”

“An Act which is not enforced against internet gaming providers, while Australian-based not-for- profit clubs must comply with significantly higher standards, is neither fair nor good governance,” the submission states. “Clubs Australia recommends that the Federal Government regulate internet gambling on behalf of all States and Territories, including by prohibiting advertising.”

But any federal moves to regulate online gaming in Australia are still likely to be resisted by powerful interest groups both from within the gambling sector, and at a state government level. The Western Australian government, for example, states in its submission that the availability of cross-border interactive gambling has undermined its policy initiatives to restrict terrestrial gambling opportunities in the state.

“Cross border wagering is flourishing and there is an increasing threat to Western Australian Government policy from interstate and overseas gambling service providers,” the Western Australian Government said in its Productivity Commission submission.

“The convergence of computing, communications and broadcasting technology embodied in interactive home gambling has serious implications for, and represents a threat to Government policy with respect to gambling.”

The submission adds: “In regards to overseas-based internet gambling service providers, the potential exists to introduce interactive gaming machines into every home in Western Australia. This would seriously undermine the Western Australian Governments prohibition on poker machines and policy of limiting the extent and character of gaming machine technology in the public realm.”

Meanwhile, the Melbourne-based betting, gaming and lotteries operator Tatts Group expressly states that the Federal Government should resist calls to amend provisions related to online casinos and in-running wagering. “Tatts Group supports the retention of the current provisions of the Interactive Gambling Act,” the company said.

The Productivity Commission has thus far received 220 responses in the first stage of its consultation process. It expects to hold a public hearing in September or October on its initial draft policy recommendations that should be published over the summer, ahead of a final report that is slated for delivery to the Australian government on November 24, 2009.