Australia: Online Gaming - Australian Productivity Commission Final Report on Gambling (June 2010)

Addisons FocusPapers: What Does It Mean For The Online Gaming Sector?
Last Updated: 5 July 2010
Article by Ashleigh Fehrenbach and Andrew Dawson


On 23 June 2010, the Productivity Commission (Commission) released its Final Report on Gambling.1 The Report represents a significant milestone in Australian gambling regulation and follows on from the Draft Report the Commission published in October 2009.2

The Productivity Commission was requested by the Australian Government to report on various matters relating to the gambling industry including:

  • the implications of new technologies (such as the Internet), including the effect on traditional government controls on the gambling industries; and
  • the effectiveness and success of harm minimisation measures.

This review represents the second inquiry conducted by the Commission, the first being in 1999. The 2010 report makes a number of recommendations concerning Australia's gambling industries, including several specific to online gaming.

Key Findings and Recommendations

  • Research suggests that, although online gaming has benefits, the potential impact of consumption of online gaming services by problem gamblers poses a significant social cost. Accordingly, online gaming should be subject to appropriate regulation.
  • The Interactive Gambling Act 2001 (Cth) (IGA) (which currently prohibits online gaming) has had limited effectiveness in reducing demand for online gaming services and its effectiveness is likely to decline over time.
  • The IGA discriminates against potential online gaming providers by effectively ensuring that the Australian market (which is growing) for online gaming is catered for by offshore providers who operate under different regulatory regimes.
  • The most appropriate form of regulation is gradual managed liberalisation of online gaming with strict licensing criteria and harm minimisation requirements.
  • Such liberalisation should commence with the liberalisation of online poker which is likely the safest form of online gambling and, subject to the effect of this liberalisation, extend to other forms of online gambling.

The Commission's Findings

The IGA prohibits the provision of online gaming (but not online wagering on races or sports betting) to Australian residents.

The Commission examined whether the IGA had achieved its objectives which included:

  • limiting the development of the online gaming industry and, thereby, minimising the scope for problem gambling amongst Australians; and
  • balancing the protection of Australians with a sensible and enforceable regulatory regime.

The Productivity Commission reached the view that, although it is probable that the IGA has had the desired effect of reducing demand for online gaming and, therefore, the development of the online gaming industry, it is not clear that the effect has been large. In fact, consumption by Australians of online gaming services offered by international sites has grown considerably and will continue to grow. The IGA has, therefore, had limited effectiveness and that effectiveness will decline over time.

This means that Australians participating in online gaming do so using offshore online gaming sites which may not have appropriate harm minimisation processes in place and may operate with unscrupulous business practices. In other words, there is no means for an Australian wishing to engage in online gaming activity to participate through a service licensed by an Australian jurisdiction having regard to Australian harm minimisation principles.

Although the Commission's conclusions (as discussed in more detail below) apply predominantly to online gaming, they are equally relevant to gaming that can be conducted using other technologies under Commonwealth government control such as mobile phones and broadcasting.

The Commission's Conclusions

Online gaming offers unique benefits and also carries with it risks. Although the risks have often been overstated, the relatively high proportion of problem gamblers that surveys and data suggest use online gaming services is a cause for concern. These and other potential harms associated with online gaming indicate that appropriate regulation of online gaming is needed to protect consumers.

However, in respect to the current prohibitions in the IGA:

  • the prohibitions have had limited effectiveness in preventing growth in consumption of online gaming services by Australians;
  • the effectiveness of those prohibitions is likely to decline over time;
  • the prohibitions amount to discriminatory deregulation which ensures that the Australian online gaming market is exclusively catered to by offshore providers who operate under various different regulatory regimes;
  • the prohibitions provide inadequate protection for Australian online gamblers; and
  • the scope of the problem of inadequate protection is likely to rise as consumption by Australians of online gaming services increases.

Accordingly, the IGA in its current form does not represent the best regulatory option for Australia. The two broad regulatory options available are:

  • strengthening the IGA to make it more effective; or
  • amending the IGA to realise the benefits of online gaming while minimising its potential harms.

Although it is questionable whether strengthening the IGA through the imposition of effective internet filter/blocking mechanisms is possible (which are discussed), the costs of strengthening the IGA and continuing the prohibition of online gaming are not warranted by the apparent level of harm of online gaming.

Accordingly, the amendment of the IGA to permit gradual managed liberalisation of online gaming is preferable. This gradual liberalisation should commence with online poker because it appears to be the least risky and, therefore, safest form of online gambling.

Any regulation in Australia of online gaming should be national. If possible, it should be consistent with regulation in similarly liberalised countries (such as the UK) – this will enable Australian licensed operators to compete internationally.

The Commission's Recommendations

The Australian Government should amend the IGA to permit the supply of online poker games.

Online poker, along with other gambling forms currently exempted from the IGA, should be subject to a regulatory regime that mandates:

  • strict probity standards; and
  • high standards of harm minimisation including:
    • the prominent display of information on account activity and information on problem gambling and links to problem gambling resources;
    • the ability of players to pre-commit to a certain level of gambling expenditure;
    • the ability of players to self-exclude; and
    • the display of automated self warnings arising from potentially harmful patterns of play.

The Australian Government should monitor the effectiveness of:

  • harm minimisation standards applying to licensed online gaming; and
  • the performance of the regulator in overseeing a national regulatory regime.

The Australian Government should also evaluate whether:

  • the provision of online poker should continue to be permitted; and
  • liberalisation should be extended to other online gambling forms.

Differences from the Draft Report

The key difference in the Final Report from the Draft Report relates to the suggestion of gradual liberalisation of online gaming with the licensing of online poker occurring first.

The Australian Government's Response

The Australian Government issued a press release after the release of the Final Report stating:

  • the Australian Government does not support the liberalisation of online gaming (including online poker) as recommended by the Commission;
  • the current prohibitions under the IGA will continue to apply;
  • the Australian Government will examine the regulatory approach of other countries with similar regimes in relation to online gaming (such as the United Stated of America); and
  • the Australian Government will work with other countries to investigate the possibility of a more effective multilateral regulatory regime to address online gaming, its social impacts and its impact on the Australian gambling industry.

Way forward

The Final Report of the Commission indicates that the prohibitionist approach in the IGA has not been effective and that a more appropriate way of regulating online gaming is through a policy of managed liberalisation. Clearly, the Government does not accept this approach – however, we anticipate that considerable debate will continue on this topic, and the appropriate means in which online gaining should be regulated in Australia.

1. See

2. See and Addisons FocusPaper entitled "Productivity Commission Draft Report on Gambling (October 2009) - What does this mean for the online gaming sector?".

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions