Australia: Regulated Online Gambling Industry Versus Legislative Prohibition: Is A Regulated Approach The Best Way To Protect Australian Consumers Of Online Gambling Services?

The online gambling industry is an alluring idea for many. The opportunity to chance their hand 24 hours a day without leaving their own home presents a potential minefield for those who cannot resist the temptation. This article considers whether a regulated approach to online gambling is the best method of protecting Australian consumers.

Australia's Legislative Framework

Regulation of the gambling industry in Australia has traditionally been the responsibility of the States who rely on the revenue generated from such activities.1 However, in 2001 the Commonwealth undertook a more active role in the regulation through the introduction of the Interactive Gambling Act 2001 (Cth) (the Act).

The Act provides the federal framework for the regulation of the online gambling industry in Australia. Broadly, the Act was designed to impede the continued expansion of gambling in Australia whilst minimising the impact of problem gambling for families and communities and boosting consumer protection.2 There are two major functions of the Act:

  1. The Act makes it an offence to provide interactive gambling services to a person who is physically present in Australia.3
  2. The Act creates an industry-based complaints system which allows Australian consumers to make complaints about online gambling services which originate off-shore.

The Act, however, does not affect the operation of online sports betting services,4 such as Sportsbet and Betfair, as these are considered to involve an element of skill rather than being a game of pure chance.

A number of States have also legislated with respect to online gambling. However, the regulatory approach taken by the States is effectively curtailed by the federal scheme which operates 'over the top' of the State schemes.

While the Commonwealth has enacted a "blocking" scheme, the State legislative schemes are "enabling" due to their attempt to control online gambling activities through regulation of the industry.5 For example, Queensland's Interactive Gambling (Player Protection) Act 1998 (Qld) attempts to regulate the industry and protect online gambling participants by providing for a licensing and audit scheme for authorised providers (requiring player registration) and allowing for special orders to ban problem gamblers. Similarly, the Northern Territory's Gaming Control (Internet Gaming) Regulations 1998 (NT) sets out detailed licensing requirements and player protection measures in order to control the industry within the Northern Territory.

Therefore, the present situation is that an online gambling service provider may operate in Australia, but may not provide their services to Australian consumers. Australian consumers wanting to engage in online gambling have no option but to wager in an off-shore operation.

Regulated System

There is support for a properly regulated online gambling industry in Australia. Most importantly, the major argument in favour of regulation is that a harm-minimisation approach is the best strategy for an industry that is rapidly expanding. A regulated approach offers the socially-desirable ability to monitor users of the online gambling services.

Andrew Essa, in his article 'The Prohibition of Online-Casinos in Australia: Is It Working?'6 argues that while prohibition successfully prevents Australian-based providers from operating within Australia, Australian consumers inevitably have access to overseas-based sites (which have not been the subject of the IGA complaints scheme) due to the inherent nature of the Internet to allow users to circumvent domestic prohibitions. This creates a myriad of new difficulties as problem gamblers who are being pushed off-shore are difficult to track and monitor.

Tales of devastating woe caused by excessive gambling are often reported as current affairs. The Senate Committee Netbets Report7 argues that cohesive regulation offers the ability to implement harm minimisation policies which could significantly reduce the potential for a consumer to 'slip through the cracks'. The Netbets Report describes a number of such policies, including:

  • identification of problem gamblers;
  • exclusions of certain players;
  • time limits on gambling and the continuity of gambling activities;
  • warnings about the risks of gambling and advertising about responsible gambling;
  • links to problem gambling information; and
  • player information tracking system e.g. amounts of money being spent by a particular player.

The Netbets Report recommended that the Federal and State governments develop a strict, uniform regulatory system with an emphasis on consumer protection through harm-minimisation policies. The argument is that through implementing policies such as these, problem gamblers would be identified and intervention would become possible before the situation became dire. Undoubtedly, the impact of such intervention is a desirable outcome for the greater Australian community both socially and financially.

Supporters of a regulatory approach argue that regulation would encourage users of online gambling services to use legitimate online operations, rather than certain off-shore sites which have typically been considered less responsible in their approach to gaming. Dr Richard Woolley, a research fellow at the Centre for Industry Innovation Studies at the University of Western Sydney, believes that if the industry were to be regulated there would be a reduction in money being channelled to organised crime or illegal markets.

An example of a successfully regulated operation is Lasseters online casino which operates out of the Northern Territory (the only jurisdication in Australia that grants licences to online casinos). Lasseters was the first company in the world to launch a fully regulated online gambling service in 1999. Operating under the tightly regulated Northern Territory legislative scheme, Lasseters employs strategies such as restricting access by minors and providing a referral service to gambling advice and support groups. Additionally, players have the option to exclude themselves from the site either permanently or temporarily to encourage self-prohibition. Players may only bet with funds available in their playing account and all transactions are recorded and tracked. Additionally, players can set periodic betting limits to discourage impulse gambling.

What Is Happening Overseas?

Interestingly, the United Kingdom and the United States of America have taken opposite approaches to this issue. In the USA, online gambling has been curbed by the introduction of the Internet Gambling Enforcement Act 2006. Whilst this Act does not expressly outlaw online gambling, it makes the taking or making of payments from online gambling sites by US banks and credit card companies an offence, thereby reducing the ability of online gambling sites to operate. The UK, however, has recently adopted a regulated system of online gambling. In other parts of the world, Germany banned online gambling totally on 1 January 2008.


Where does this leave us in considering the online gambling industry in Australia?

Any Australian who has access to the Internet has the ability to gamble on off-shore sites, and it is this fact that gives weight to the argument that a regulation approach be adopted. Regulation of the industry through a harm-minimisation approach would enable in-depth tracking of problem gamblers which would minimise social and financial burdens on the community.

Since its commencement in 2001, the Act has had very few significant amendments and there is no major system changes apparent in the near future. However, given the highly variable nature of the Internet due to ever-increasing technological advances and its exponentially growing usage rate, it is not unthinkable that reform of this decidedly controversial industry would be considered.


1. Dr Kim Jackson, Parliamentary Report.

2. Dr Kim Jackson, Parliamentary Report.

3. Interactive Gambling Act 2001 (Cth) s15.

4. Interactive Gambling Act 2001 (Cth) s8A.

5. Chalmers, R. 2002. 'Regulating the Net in Australia: Firing Blanks or Silver Bullets?' Murdoch University Electronic Journal of Law 9(3).

6. Essa, A. 2004. 'The Prohibition of Online-Casinos in Australia: Is It Working?' Queensland University of Technology Law & Justice Journal 6.

7. Senate Committee Report: 'Netbets: A Review of Online Gambling in Australia' (2000).

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”

Related Topics
Related Articles
Related Video
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
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

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