A myriad of complex issues will need to be considered by the wagering sector in 2012. These include the decisions in the pending High Court appeals in the Sportsbet and Betfair applications, the much anticipated report of the Department of Broadband, Communications and the Digital Economy (DBCDE) concerning its review of the Interactive Gambling Act 2001 (Cth) (the DBCDE Review), as well as the manner in which broader community concerns over match fixing and the proliferation of sports betting advertising will be addressed.
A precursor to these developments is the report of the Parliamentary Joint Select Committee on Gambling Reform Inquiry into Interactive and Online Gambling and Gambling Advertising (the JSCOGR Report) released on 8 December 2011. The JSCOGR Report covers a number of these issues and its recommendations, although not binding, will be considered by the DBCDE Review and politicians in determining future policy affecting the wagering sector.
Product Fees and Sports Integrity
Product fee litigation in Australia has been going on since the first legislation came into force in 2007. However, to date, this has centred on the racing sector. While all State and Territory jurisdictions have in place race fields regimes (with the exception of the Northern Territory), only Victoria has legislation requiring agreements between wagering operators and sports administrators to be in place to enable a fee to be paid to the sport.
The JSCOGR Report supports the principle of a nationally consistent legislative framework in which sporting administrators and wagering operators will be required to agree to share information, and under which sporting administrators will be able to veto categories of bets. The JSCOGR Report also suggests that betting operators adopt an industry standard for information exchange by July 2012. Finally, it recommends that codes of conduct be adopted for smaller sports to ensure integrity (with government funding to those sports being contingent on the adoption of such codes in order to encourage adoption).
Increased regulation of sports betting has been on the national agenda for the past year. Indeed, Federal and State/Territory Attorneys General and Ministers for Sport are currently reviewing proposals for the introduction of nationally consistent match fixing laws and the formation of a National Sports Integrity Unit.
Although the focus to date of these discussions has been on protecting the integrity of sport, it seems unlikely that legislation to restrict the use of sporting fixture information would be introduced without conferring on sports administrators the right to levy a fee or require an operator to enter into a contribution agreement (as is the case under Victorian legislation).
If legislation of this nature were to be introduced in a manner which is not coordinated, sport may face the same issues encountered by the racing sector in the past 3 years, namely duplication, inconsistency and the potential for ongoing litigation.
Moreover, if the Betfair and Sportsbet High Court appeals are dismissed (which would be viewed as an effective endorsement of the approach taken by Racing NSW), it is possible that some sports administrators may seriously consider moving away from the existing gross profits-based product fees that they have voluntarily entered into with wagering operators to turnover-based fees.
Due to the rapid growth of sports betting activity in Australia over recent years, and the perceived proliferation of sports betting advertising and sponsorships, the JSCOGR Report notes the commensurate increase of community concern about the potential harmful consequences. It also suggests significant growth in the number of problem gamblers reported as a result of involvement in sports betting activity.
The concern mainly arises from the exposure of children to gambling practices, and the JSCOGR Report notes in particular the blurring of the boundaries between sports betting and the game.
The JSCOGR Report also recommends a total ban on live odds promotion at venues and during broadcasts, and a total ban on gambling advertising during times that children are watching (regardless of whether this is during a sporting match or not). A mandatory national code of conduct is recommended covering advertising (which would include inducements to bet), credit betting, harm minimisation measures, a ban on display of gambling companies' logos on sports uniforms and restrictions on give-aways of merchandise with logos of betting companies.
While the JSCOGR Report recommends that further research be conducted broadly in relation to sports betting, it also contains more specific suggested areas that should be researched, such as the risks of online in-play betting and the 90-day verification time frame currently provided to confirm a customer's identity (with a view to reducing it to 72 hours). The JSCOGR Report suggests that nationally consistent requirements be adopted so that gambling messages counterbalance effectively messages for the promotion of gambling.
Much discussion has taken place relating to the possible liberalisation of the current restrictions on in-play betting. Prior to the JSCOGR Report, there were various media reports indicating that, in addition to wagering operators, a number of sporting administrators had come to the view that the liberalisation of in-play betting would allow greater scrutiny of these betting markets. (While the current prohibitions prevent Australian wagering operators from offering in-play betting, numerous overseas bookmakers offer this product to Australian customers. These overseas operators do not have information sharing arrangements with sporting administrators and, as a result, it can be difficult for administrators to investigate the betting participants and betting patterns that are occurring on these markets.)
However, the JSCOGR Report expresses considerable concern as to whether liberalisation of online wagering (primarily in the area of in-play betting) would simply expand the gambling market and encourage the development of problem gamblers. JSCOGR took the view that the prohibition against in-play betting should remain in place until better data is available to indicate the likely consequences of a relaxation of the existing ban.
In addition, the JSCOGR Report recommended DBCDE commission research as part of its review. While there is no indication that DBCDE has instigated any research as a result of the JSCOGR Report, politicians opposed to any change to the existing IGA may point to this as a precondition before any amendments were to be considered.
The recommendations of the JSCOGR are likely to be considered by DBCDE and taken into account in the course of the DBCDE Review. We anticipate that sports betting operators, and other interested stakeholders (for example, sporting administrators and broadcasters) will want to ensure that their views on the recommendations are taken into account.
Also, we anticipate that considerable efforts will be taken by DBCDE to ensure that the views of all interested parties are considered properly.
The DBCDE Review will be awaited with interest by the wagering sector.
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