Online gaming regulation in Australia has been in a state of flux since the enactment of the Interactive Gambling Act 2001 (Cth) (the IGA) in 2001. Unfortunately, the latest report, the report of the Parliamentary Joint Select Committee on Gambling Reform Inquiry into Interactive and Online Gambling and Gambling Advertising (the JSCOGR Report), has not assisted in clarifying the position.
The JSCOGR Report was released on 8 December 2011 and covers a variety of issues. It follows the Productivity Commission's Inquiry into Gambling in 2010.
Although the report is the work of a parliamentary committee and, therefore, not binding on the Federal Government, its recommendations and views will be considered by the Department of Broadband, Communications and the Digital Economy's (DBCDE) in the context of its ongoing review of the IGA (the DBCDE Review)6 and are likely to form the basis of arguments both for and against the liberalisation of the IGA.
Paucity of Research
When the IGA was first passed, Australia was at the forefront of online gaming regulation. In the late 90s, the States and Territories had developed model legislation to create a harmonised national regime for online gaming regulation. Each State or Territory planned to introduce its own legislation but these statutes were, as much as possible, to be in fairly similar terms. Indeed, Victoria, Queensland, the Northern Territory and the ACT introduced legislation of this nature (and licences had been granted in some jurisdictions) before the Federal Government passed a law creating a moratorium on the provision of any online gaming service while the appropriate legislative stance was considered. Subsequently, the IGA was enacted.
Once the IGA was enacted, the pre-eminence in the regulation of online gaming that Australia held was lost and the further development of gambling regulation was taken up in other jurisdictions, notably Europe, where many reputable online operators are now licensed. While Australians are not prohibited from using online gaming services, no Australian operator is permitted to offer these services to Australian residents.
As most operators which provide online gaming services are located overseas, it is difficult for Australian researchers to gain access to this data and, to date, there has been limited research conducted on the impact of online gaming from an Australian perspective.
It is perhaps unsurprising then that the central finding of the JSCOGR Report is that the lack of research in Australia in understanding the ramifications of online gaming makes it difficult to formulate policy. As a result, the central recommendation of the JSCOGR Report is that research should be commissioned by the DBCDE and that it was unable to make recommendations to liberalise the IGA.
Differing Points of View
The JSCOGR Report covers both gaming and wagering and the report makes recommendations in respect of each.7 In the case of wagering, JSCOGR seems largely in agreement. Its recommendations appear to have been reached unanimously and it was relatively clear in its approach.
The situation is not as straightforward in relation to gaming. In addition to considering online gambling more generally, the inquiry considered a private member's bill that Senator Nick Xenophon had introduced into the Senate and which was referred to JSCOGR. Among other things, Senator Xenophon's bill attempts to make Australian residents less attractive to overseas gambling operators by allowing Australians to, in essence, avoid the obligation to pay credit card payments made to overseas operators.
A majority of JSCGOR rejected Senator Xenophon's bill on the basis that it would cause considerable difficulties in implementation and may have the perverse incentive of encouraging Australians to begin using online gambling websites under the impression that there would be no risk of loss. Unsurprisingly, Senator Xenophon, a member of JSCOGR, disagreed with this conclusion and, in a comment at the end of the report, criticised the decision.
More surprising were the additional comments of the Chairman of JSCOGR, Andrew Wilkie. Mr Wilkie has risen to prominence in Australia as the lead advocate for a pre-commitment system for electronic gaming machines (poker machines). Notwithstanding his strict position on the dangers which he believes poker machines pose, Mr Wilkie believed that JSCOGR should have followed the advice of the Productivity Commission and recommended the managed liberalisation of online gaming, beginning with poker.
Although the JSCOGR Report specifically recommended that DBCDE commission research as part of its review, we are not aware of DBCDE acting on this proposal and, in our opinion, consider it unlikely. The DBCDE Review is due to report in the first half of 2012 and that would present little time for any meaningful research to be conducted. That said, the recommendation in the JSCOGR Report for any liberalisation to be delayed until further research has been carried out provides a counterpoint to the recommendation of the Productivity Commission's inquiry for managed liberalisation of poker (the Commission recommended liberalisation of one type of gaming activity partly so as to allow for study of the consequences). If DBCDE is reluctant to recommend liberalisation, it may point to the JSCOGR Report for support.
Attention will now focus on the DBCDE Review. While the discussion paper that DBCDE released seemed to indicate that serious consideration would be given to the liberalisation of online gaming, the JSCOGR Report illustrates the difficulties that the liberalisation of online gaming presents.
Relatively widespread agreement amongst policymakers that the existing regulatory regime for online gaming is not working is one thing, moving to amend the IGA and allowing a more liberalised approach which involves the licensing of online gaming operators is another.
6 For background to the DBCDE Review, see our previous issue of Addisons Gambling Law & Regulation at http://www.addisonslawyers.com.au/focuspaper/222.
7 For more detail on what the JSCOGR Report means for the wagering sector see Addisons our previous story JSCOGR Inquiry into Online Gambling - What does it mean for wagering operators in 2012?.
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