1 History of and overall attitudes to gambling
1.1 How prevalent are different types of gambling in your jurisdiction? For example, does the current law reflect: (a) Religious or moral objections to gambling? (b) A permissive approach which also seeks to address the social consequences of gambling? and (c) The promotion of gambling as an ‘export' industry?
Gambling is firmly embedded in Australian culture and is fuelled by an inherent passion for sports, racing and gaming. Gambling is an important industry in Australia and contributes significantly to its gross domestic product. Despite the sizeable contribution of the gambling industry to the Australian economy, there exists social pressure on government and operators to heighten measures in relation to consumer protection and to minimise problem gambling.
In Australia, there is a general prohibition in all jurisdictions on the conduct and promotion of gambling. Legislative exemptions exist for gambling activities that are conducted under a licence.
These activities include:
- lotteries (both in venue and online);
- wagering and sports betting (both in venue and online);
- electronic gaming machines, slot machines and ‘pokies' (in venues); and
- land-based casinos where casino games – including poker, baccarat and blackjack (among others) – can be played.
The paternalistic approach to the regulation of gambling services by Australian federal and state and territory governments is a response to the concerns that arise from the adverse social consequences associated with gambling. However, gambling has long been a part of Australia's culture and identity and, together with racing and sport, is well established in the national consciousness.
State and territory-based regulation of gambling in the early 20th century marked the beginning of the legislative regime in place today. With the introduction of online wagering in the late 20th century, the industry continues to flourish, despite the continuing conflict between the economic returns provided by the gambling sector to state and territory governments and sporting and racing bodies, and the pressure for governments to take action to minimise problem-gambling behaviour.
2 Legal and regulatory framework
2.1 Which legislative and regulatory provisions govern gambling in your jurisdiction?
Set out below is a list of the primary legislation governing gaming, betting, lotteries and social/skill arrangements for each Australian state and territory, as well as at the federal level. This list is not exhaustive; there are many statutes that are incidental to gambling activity (eg, legislation setting the applicable gambling tax rates). There are also various subordinate legislative instruments, including regulations, which have not been included.
- Victoria (VIC):
- the Casino (Management Agreement) Act 1993 (Vic);
- the Casino Control Act 1991 (Vic); and
- the Gambling Regulation Act 2003 (Vic).
- New South Wales (NSW):
- the Betting and Racing Act 1998 (NSW);
- the Casino Control Act 1992 (NSW);
- the Community Gaming Act 2018 (NSW);
- the Gaming Machines Act 2001 (NSW);
- the Public Lotteries Act 1996 (NSW);
- the Unlawful Gambling Act 1998 (NSW); and
- the Totalizator Act 1997 (NSW).
- Queensland (Qld):
- the Breakwater Island Casino Agreement Act 1984 (Qld);
- the Brisbane Casino Agreement Act 1992 (Qld);
- the Cairns Casino Agreement Act 1993 (Qld);
- the Casino Control Act 1982 (Qld);
- the Charitable and Non-Profit Gaming Act 1999 (Qld);
- the Gaming Machine Act 1991 (Qld);
- the Interactive Gambling (Player Protection) Act 1998 (Qld);
- the Jupiters Casino Agreement Act 1983 (Qld);
- the Keno Act 1996 (Qld);
- the Lotteries Act 1997 (Qld);
- the Queen's Wharf Brisbane Act 2016 (Qld); and
- the Wagering Act 1998 (Qld).
- Australian Capital Territory (ACT):
- the Casino Control Act 2006 (ACT);
- the Gaming Machine Act 2004 (ACT);
- the Interactive Gambling Act 1998 (ACT);
- the Lotteries Act 1964 (ACT);
- the Pool Betting Act 1964 (ACT);
- the Race and Sports Bookmaking Act 2001 (ACT);
- the Racing Act 1999 (ACT);
- the Totalisator Act 2014 (ACT); and
- the Unlawful Gambling Act 2009 (ACT).
- South Australia (SA):
- the Authorised Betting Operations Act 2000 (SA);
- the Gambling Administration Act 2019 (SA);
- the Casino Act 1997 (SA);
- the Gaming Machines Act 1992 (SA);
- the Lottery and Gaming Act 1936 (SA); and
- the State Lotteries Act 1966 (SA).
- Tasmania (Tas):
- the Gaming Control Act 1993 (Tas).
- Western Australia (WA):
- the Betting Control Act 1954 (WA);
- the Casino (Burswood Island) Agreement Act 1985 (WA);
- the Casino Control Act 1984 (WA);
- the Gaming and Betting (Contracts and Securities) Act 1985 (WA);
- the Gaming and Wagering Commission Act 1987 (WA);
- the Racing and Wagering Western Australia Act 2003 (WA); and
- the Racing Bets Levy Act 2009 (WA).
- Northern Territory (NT):
- the Gaming Control Act 1993 (NT);
- the Gaming Machine Act 1995 (NT);
- the Racing and Betting Act 1983 (NT);
- the Unlawful Betting Act 1989 (NT); and
- the Totalisator Licensing and Regulation Act 2000 (NT).
- the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth);
- the Financial Transaction Reports Act 1988 (Cth); and
- the Interactive Gambling Act 2001 (Cth).
2.2 Which bodies are responsible for regulating and enforcing the applicable laws and regulations? What powers do they have?
Gambling laws in Australia are complex as there is no single overarching statute regulating gambling activities; nor is there a single overarching gambling authority. Instead, gambling in Australia is regulated at the state, territory and federal level. Each of Australia's eight mainland states and territories separately regulates gambling activities within its respective jurisdiction. In addition, a series of federal statutes cover certain aspects of gambling activity throughout Australia.
The key responsibilities assigned to the state and territory gambling regulators include granting licences, monitoring compliance of gambling operators and enforcement of legislation where necessary. Set out below are the regulators responsible for regulating gambling activity in each Australian state and territory.
Victoria: The Victorian Gambling and Casino Control Commission is VIC's independent gambling authority responsible for licensing and compliance.
The Office of Liquor, Gaming and Racing is a division within VIC's Department of Justice and Regulation responsible for policy, legislation, regulation, and major licensing.
New South Wales: Liquor and Gaming New South Wales (L&GNSW) sits within the NSW Department of Enterprise, Investment and Trade and is responsible for policy, licensing and compliance. Separately, the Independent Liquor and Gaming Authority (ILGA) is an independent statutory decision-maker responsible for a range of casino, liquor, registered club and gaming machine regulatory functions. A number of ILGA's routine licensing functions are delegated to L&GNSW. The New South Wales Independent Casino Commission (NICC) has recently been established which has the sole responsibility to regulate the two casinos in the state.
Queensland: The Queensland Office of Liquor and Gaming Regulation (QOLGR) is responsible for licensing and compliance and the Office of Regulatory Policy (QORP) is responsible for policy and legislative development for the regulation of liquor, gaming and fair trading, as well as harm minimisation programmes for the liquor and gambling industries. The QOLGR and QORP sit within the state's Department of Justice and Attorney-General.
Australian Capital Territory: The Gambling and Racing Commission sits within the portfolio of the minister for regulatory services and is the ACT's independent gambling authority responsible for licensing, compliance and education.
South Australia: Consumer and Business Services sits within the Attorney-General's Department and is responsible for policy, licensing and compliance in relation to betting, casinos, gaming machines and lotteries.
The Lotteries Commission of South Australia sits within the Auditor General's Department and has the primary function of promoting and conducting lotteries in SA. It has appointed a master agent to operate the commission's brands and products.
Tasmania: The Tasmanian Liquor and Gaming Commission sits within the Department of Treasury and Finance and is Tas's independent gambling authority responsible for licensing and compliance.
Western Australia: The Western Australian Department of Racing, Gaming and Liquor sits within the portfolio of the Minister for Racing and Gaming and is responsible for policy, licensing and compliance matters.
Northern Territory: The Northern Territory Racing Commission (NTRC) is largely responsible for compliance matters.
Licensing NT is responsible for licensing matters affecting all gambling activities in the NT.
The NTRC and Licensing NT sit within the NT Department of the Attorney-General and Justice.
Local government: To a lesser extent, local government bodies in most states and territories also regulate gambling from a local government and town planning perspective, but typically only as it relates to gaming machines and their operation within the relevant municipal district.
Federal regulators: The Australian Constitution provides the federal government with powers to regulate and govern, among other things, telecommunications, money and trade among the states and territories.
Using these powers, the federal government has enacted legislation regulating, among other things:
- interactive gambling;
- anti-money laundering and counter-terrorism financing (AML/CTF); and
- consumer and competition protections.
Set out below are the relevant regulatory bodies and a brief description of how they regulate gambling.
Interactive gambling: The Australian Communications and Media Authority (ACMA) is the body responsible for media and communications regulation throughout Australia, including monitoring and enforcing the regulation of gambling online and over the telephone (referred to as the ‘interactive gambling laws').
ACMA monitors compliance with and enforces the interactive gambling laws.
Australia's federal interactive gambling laws prohibit certain activities, such as:
- online casinos, slot machines and poker;
- online wagering services that accept ‘in-play' betting on live sports events;
- online wagering services provided without a licence issued by an Australian state or territory;
- online instant lotteries; and
- the provision or facilitation of the provision of credit by certain interactive wagering service providers to their customers.
ACMA has the power to, among other things:
- instigate civil proceedings in Australia;
- notify border protection agencies of the names of directors/principals of offending illegal offshore operators (who may then be placed on a ‘movement alert list', thereby disrupting any travel to Australia); and
- liaise with foreign regulators to stop alleged offenders.
A key focus for ACMA has been combating illegal online casinos from being offered in Australia. More recently, this focus has expanded to targeting affiliate advertising websites that promote and drive traffic towards illegal gambling websites.
ACMA has also been proactive in its strategic engagement with international regulators and adopted a robust enforcement approach. In mid 2022, ACMA advised that it had requested internet service providers to block more than 500 illegal gambling websites.
ACMA, which now regularly requests that internet service providers block proscribed websites, claims that there has been a 95% reduction in traffic to the top 10 gambling websites that were blocked to June 2022.
AML/CTF regulation: The Australian Transaction Reports and Analysis Centre (AUSTRAC) is the regulator responsible for detecting, deterring and disrupting criminal abuse of the financial system, including money laundering and terrorism financing.
Under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) (‘AML/CTF Act'), certain gambling activities are classified as ‘designated services', with providers of such services being ‘reporting entities' required to, among other things:
- register with AUSTRAC;
- develop and maintain a compliant AML/CTF program; and
- report certain transactions to AUSTRAC, including by way of threshold transaction reports (TTRs) and suspicious matter reports (SMRs).
Failure to comply with the AML/CTF Act – including not maintaining a compliant AML/CTF program and not filing TTRs and/or SMRs (or filing them late) – can result in large civil penalties and possible criminal exposure. For example, in 2017 a large Australian gambling company paid an A$45 million civil penalty to AUSTRAC for failing to comply with certain requirements under the AML/CTF Act.
Competition: The Australian Consumer and Competition Commission (ACCC) is responsible, under the Competition and Consumer Act 2010 (Cth) (CCA), for enforcing the Australian consumer protection laws., among other things. From a gambling perspective, the ACCC monitors compliance by gambling service providers of their obligations under the CCA, including gambling advertising (to ensure the consumer is not being treated unconscionably or unfairly in breach of the CCA). It also takes appropriate enforcement action where it deems necessary.
2.3 What is the regulators' general approach in regulating the gambling sector?
This is covered in question 2.2, due to the complex framework.
3 Definitions and scope of gambling
3.1 How is ‘gambling' defined in your jurisdiction?
Although it is difficult to provide an all-encompassing legal definition of ‘gambling' in Australia, generally speaking, ‘gambling' is defined as an activity which involves staking money or something of real-world value on the outcome of an event that is determined in full or in part by chance, such as a sporting event or a horse race, with the intent of winning a prize or something else of value.
Gambling regulation in Australia also extends to ‘trade promotions' (offered referred to in other jurisdictions as ‘sweepstakes') – that is, free-to-enter competitions for the promotion of trade. While such activities are generally permissible – subject to compliance with requirements in relation to factors such as draw integrity, publication of results and eligible prize types – some Australian states and territories require the promoter to first obtain a permit from the relevant regulator.
3.2 What different types of activities are defined in the gambling legislation and what specific requirements apply to each? Please consider: (a) Betting (fixed odds/pool and spread)/betting on lotteries; (b) Gaming (house and ring games); (c) Lotteries/scratch cards and (d) The interface with financial products (if relevant).
Casino gaming: Online casino gaming in Australia (including slots and casino table games such as roulette and blackjack) is regulated by the Australian Communications and Media Authority (ACMA).
Online casino gaming is prohibited in Australia under the Interactive Gambling Act 2001 (Cth). However, a person may still apply for an ‘internet gaming licence' in the Northern Territory and offer gaming products outside of Australia in certain circumstances.
Online poker: Online poker is prohibited in Australia under the Interactive Gambling Act. There have been lobbying efforts seeking its approval, on the basis that it is a game of skill. There is a possibility that it could be legalised in the future.
Poker is typically played within casinos and is regulated as a table game by the state and territory gambling regulators detailed below. In addition to casinos, poker is also played in hotels and clubs without generally being regulated in the same manner as a traditional casino table poker game, subject to prohibitions or limitations on a third party (e.g. the venue owner/operator or tournament organiser) gaining a percentage or share of any amount bet.
Bingo: Online bingo is regulated by the state and territory gambling regulators detailed below. Bingo is regulated by state and territory gambling regulators.
Betting (including sports betting, wagering, fantasy betting): Online and land-based betting is regulated by the regulators detailed in question 2.2. Fantasy betting is offered by corporate bookmakers licensed in the Northern Territory. The relevant regulatory bodies are the Northern Territory Racing Commission and Licensing NT. There is currently no land-based betting on fantasy sports in Australia.
Lotteries: Online and retail lotteries are regulated by the regulators detailed in question 2.2.
Social gaming with no prize in money or money's worth: Social gaming (as described) is not generally regulated by gambling regulators; however, age classifications and other restrictions apply to such games.
Skill-based gaming and competitions with no element of chance: Any skill games and competitions with no element of chance are not typically regarded as gambling, but may fall within certain ‘interactive gaming' regimes when operated online and be regulated by state and territory gambling regulators.
Skill-based gaming machines (which are a mixture of skill and chance) are starting to emerge in casinos; however, regulatory approvals have been slow to date as a result of the lack of available research on harm minimisation. If these games are not entirely skill-based (ie, there is an element of chance), they will be subject to the relevant gaming laws.
3.3 What are the main mechanisms and features of the control of gambling in your jurisdiction? What are the consequences of breach of the regulations, both for operators and for players?
In Australia, there is no single overarching statute regulating gambling activities; nor is there a single overarching gambling authority. Instead, gambling in Australia is regulated at state, territory and federal levels. Each of Australia's eight mainland states and territories separately regulates gambling activities within its respective jurisdiction. In addition, a series of federal statutes cover certain aspects of gambling activity throughout Australia.
The Interactive Gambling Act, for example, regulates interactive (or online) gambling services; while state and territory legislation regulates land-based and online gambling activities and sets out the regulatory frameworks for different types of gambling, including casinos, sports betting, poker machines and lotteries. The Interactive Gambling Act prevails over state and territory legislation to the extent there are any inconsistencies.
The Interactive Gambling Act prohibits overseas-based operators, which do not hold a relevant state or territory licence, from providing online gambling to Australian residents. The Interactive Gambling Act also prohibits certain forms of online gambling such as casinos, poker and bingo.
Consequences of breach of the regulations: Gambling businesses can incur sanctions for breaching their licence conditions, breaching legislation or both. This will often vary depending on three factors:
- Licensing body: Some states and territories have multiple bodies that can issue licences. The possible sanctions imposed will depend on the framework in which these bodies operate and the restrictions that they impose. For example, in New South Wales, Racing NSW, Harness Racing NSW and the Greyhound Welfare Integrity Commission can issue bookmaking licences.
- Licence conditions: Generally, regulators impose a set of general conditions on their licensees. However, provisions generally exist allowing the regulating body to impose additional licence conditions where they see fit.
- Jurisdiction: The jurisdiction in which an operator is licensed is also relevant to possible sanctions and the types of conduct that give rise to sanctions can differ depending on the laws of that jurisdiction.
For the sake of brevity, we have not itemised each of the eight state and territory jurisdictions and how sanctions can be applied.
At the federal level, breaches of the Interactive Gambling Act carry significant penalties. For example, breaches of certain provisions can result in a civil penalty of up to 7,500 penalty units for individuals (A$1.665 million) or five times that amount for corporations (A$8.325 million).
The Interactive Gambling Act is stated expressly to have extraterritorial effect (ie, it applies to overseas operators that breach the Interactive Gambling Act by offering prohibited gambling services into Australia). ACMA has the power to notify international regulators of contraventions of the Interactive Gambling Act by their licensees.
Individuals: Generally, liability is placed on the gambling provider to comply with the various legislative requirements, rather than the customer. However, in some limited circumstances, a customer can also be held liable. For example, in Western Australia, individuals can be penalised if they are a minor who places a bet (see Section 22 of the Betting Control Act 1954 (WA)) or if they place a bet on an Australian race with an operator who is unlicensed (see Sections 23 and 24 of the Betting Control Act 1954 (WA)).
Directors and officers: There are some situations where the criminal conduct of the gambling entity is extended to the directors or officers of the company. For example, under Section 53 of the Unlawful Gambling Act 1998 (NSW), directors or officials also commit an offence if they aid, abet, counsel, procure, incite or conspire with others to commit the criminal offence of the gambling entity.
At the federal level, an example is that ACMA can notify border protection agencies of the names of directors, principals and officers of operators acting in contravention of the Interactive Gambling Act. These names may then be placed on a ‘movement alert list', thereby disrupting any travel to and from Australia. In addition, there are ancillary liability provisions which mean that in certain circumstances, those individuals who aid, abet, counsel, procure, incite or conspire with others to breach the Interactive Gambling Act will incur a civil penalty as if they had breached the act themselves.
Agents: There are certain situations whereby persons who aid or abet criminal activities also commit a criminal offence. At the federal level, ACMA's compliance priorities for 2021–22 indicated a focus on affiliate services – that is, websites that advertise or promote online gambling services and provide links to them. This focus means that ACMA will target affiliate services that are breaking advertising laws or helping to provide illegal gambling services in Australia. The discussion above relating to ancillary liability provisions will also likely capture directors, officers and principals of these affiliate services. At the state or territory level, some advertising restrictions also capture the publication of advertisements by marketing affiliates utilised by licensed operators.
Payment processors and internet service providers: As stated above, there are certain situations whereby persons who aid or abet criminal activity are at risk of committing an offence themselves. This also extends to those involved in money transfers in certain situations. There are currently no legislative requirements placed on internet service providers (ISPs) to implement geo-blocking or other similar measures to prevent Australians from accessing illegal or unlicensed gambling content.
However, ACMA has the power to request internet service providers to block access to offshore online gambling operators it considers to be operating illegally in Australia (see Section 313 of the Telecommunications Act 1997 (Cth)). ACMA also maintains a list of the illegal websites it has blocked and publishes this on its website. As of mid 2022, more than 500 websites had been blocked by ACMA. Additionally, ACMA publishes a list of approved operators that hold an Australian licence to assist Australian consumers who are gambling online to make informed decisions.
4 Issues of jurisdiction
4.1 What approach do the courts take to the issue of jurisdiction? Where an operator which is physically outside the jurisdiction offers services to individuals within the jurisdiction, is such gambling treated as taking place offshore and outside the control of the authorities? If not, what triggers establish when such gambling is subject to the laws and control of your jurisdiction?
Any remote gambling services accessible in Australia will contravene the Interactive Gambling Act unless the operator holds a licence issued by an Australian state or territory permitting such activities. Casino products (eg, slots, roulette, blackjack, poker) are illegal in Australia and a licence is not available.
4.2 Can foreign operators provide remote gambling services in your jurisdiction without obtaining a licence? Can licensed domestic operators provide services overseas?
Foreign operators can generally provide remote services to Australians only if they hold a licence issued by an Australian state or territory. If they do not hold a licence, they will most likely contravene the Interactive Gambling Act and also state and territory gambling laws.
Licensed domestic operators can provide gambling services overseas if it is lawful to do so in the jurisdiction in which they are offering their services. The Australian Communications and Media Authority (ACMA) has the ability to issue a notice to such operators to require them to cease doing this where the overseas jurisdiction lodges a complaint with ACMA and certain requirements are met.
5 Remote versus non-remote gambling
5.1 Does the gambling regime in your jurisdiction distinguish between remote and non-remote gambling? If so, how are these defined?
Land-based gambling: Land-based gambling is regulated predominately through state and territory legislation. However, there are some exceptions, such as the Interactive Gambling Act (IGA) and the Anti-Money Laundering/Counter-Terrorist Financing (AML/CTF) Act, which are federal pieces of legislation that also apply to land-based gambling operators.
Land-based gambling can be understood through the various licences generally available under state and territory legislation:
- Off-course betting in retail venues (‘retail wagering'): Retail wagering includes offering pari-mutuel (totalisator) bets on racing (thoroughbred, greyhound and harness) and some sports, as well as fixed-odds betting on racing, virtual/simulated racing, sports and other approved events. Generally, retail wagering is offered by the state and territory totalisator agency boards (TABs) pursuant to a sole licence, thereby providing the TABs with a form of retail exclusivity. The TABs offer their land-based retail wagering in dedicated retail venues, racecourses or terminals in hotels and clubs.
- Lottery products: Like retail wagering, exclusive licences have been granted to provide land-based lottery products in each state or territory. These products are generally available for purchase by consumers from retailers, with the most prevalent location being newsagents.
- Licensed gaming machine operators (ie, poker/slot machines): Generally, gaming machines such as slot or poker machines (colloquially referred to as ‘pokie' machines) are permitted under the various state and territory licensing regimes in casinos, hotels and clubs (except for Western Australia, where gaming machines are only permitted in casinos). The regulation (including the total number of gaming machines available) differs in each state and territory. For example, in New South Wales, the socio-economic impact on the venue/area is considered during any application to raise the number of gaming machines (see Part 3, Division 3 of the Gaming Machine Regulation 2019 (NSW)). Additionally, in Victoria, there is a venue, area and jurisdiction cap on the number of gaming machines with a mandatory pre-commitment system (which players can opt-out of).
- Land-based casinos: The number of casino licences available is limited. Typically, there is only one per state and territory, except in the case of current casino licences held in each of Queensland, New South Wales and the Northern Territory.
Remote gambling: Online gambling is regulated at the state, territory and federal level. To offer remote (online) gambling services to Australians is a two-step process. First, the type of online gambling must not be prohibited under the IGA. As stated previously, some of the unlawful types of online gambling include online casinos, bingo and poker. Second, to offer lawful types of online gambling, there is a requirement to hold a state or territory-issued licence that enables online gambling.
The Australian Communications and Media Authority (ACMA) administers the IGA. Recently, ACMA has become more proactive in its enforcement of the IGA and it regularly requests internet service providers to block websites that breach the IGA in respect of unlicensed operators operating in or offering services into Australia. A key focus of ACMA has been combating illegal online casinos from being offered into Australia. More recently, the focus has expanded to target affiliate advertising websites that drive traffic towards illegal gambling websites.
5.2 Are there any restrictions on the media through which gambling can be provided (eg, internet/mobile telephony)?
Gambling can be provided through all mediums. However, there are some exceptions – for example, live betting on sport (as distinct from racing) can only be provided in a retail environment or over the telephone. It cannot be provided over the Internet or on mobile devices.
6.1 What types of licences are available? Please consider: (a) Operators; (b) Activities (if relevant); (c) Premises; (d) Key individuals (if relevant) and (e) Equipment (if relevant).
Licences required for the lawful offer of the relevant products to persons located in Australia are set out below:
- Casino table gaming and gaming machines, retail wagering, lotteries and keno all require an operator licence, which is typically long-dated and is granted by the relevant Australian state or territory.
- Bookmaking requires a corporate bookmaker licence or an on-course bookmaker licence. Corporate bookmakers are typically licensed in the Northern Territory (NT); whereas on-course bookmakers are licensed in the relevant state or territory. These licences are generally of shorter duration to retail licences (eg, 12 months for a Victorian on-course bookmaker's licence). Corporate bookmakers offer fixed-odds betting online and over the telephone on sport, racing and other approved events; whereas on-course bookmakers offer fixed odds betting on-course and, subject to approval, also over the telephone and in some instances online on similar events as a corporate bookmaker. Sometimes an on-course bookmaker will be licensed to offer fixed-odds betting on racing only.
- Gaming machines are offered in casinos, hotels and clubs. In relation to hotels and clubs, a venue requires both a gaming venue licence and a permit/licence for each gaming machine a venue operates. Gaming machines in Western Australia can only be offered in the casino.
- Bingo is often regarded as minor gaming and may be conducted for fundraising or charitable purposes, typically by a community or other not-for-profit organisation. A state or territory licence is typically required to operate a bingo centre in the relevant jurisdiction.
- Social gaming with no prize, being either money or money's worth, does not require any licence, given that it is not regarded as gambling under federal, state and territory law. Similarly, a skill game with no element of chance is also not considered gambling and does not require a licence, unless it is operated online and falls within certain ‘interactive gaming' regimes regulated by state and territory gambling regulators.
- Gaming machine and other equipment manufacturers, software developers and technical services suppliers selling products and/or services used for gambling-related activities are also required to hold a relevant licence.
6.2 Which bodies award and oversee such licences?
Please see question 2.1.
6.3 What are the key features of such licences (eg, term/renewal/any limit on overall numbers/change of control)?
Please see question 6.1.
6.4 What are the substantive requirements to obtain a licence (eg, company established in the jurisdiction/physical presence/capitalisation?)
Any applicant for a licence is generally required to be resident in Australia (including a corporate entity or foreign entity registered in Australia) and must undergo a probity assessment to determine whether it is ‘fit and proper' to be granted a licence. The processes are generally quite extensive and can sometimes take up to 12 months or longer for state and territory gambling regulators to complete in relation to new applicants seeking major licences.
Casino licences can typically only be applied for through a competitive tender process run by the relevant state or territory. The same applies in relation to retail wagering licences and also lotteries and keno licences. The number of licences available is limited (typically only one per state and territory, except in the case of current casino licences held in each of Queensland, NT and New South Wales (NSW)), and the processes are very infrequent.
An application for a corporate bookmaker licence issued in NT, or an application for an on-course bookmaker licence, typically takes between six and nine months for approval and can be made at any time. There is no prescribed maximum number of licences which can be issued; however, in a practical sense, there are limitations in respect of the number of on-course bookmaker licences which could be issued. The same applies in relation to any permit required to operate bingo.
The number of gaming machines available in each state and territory is strictly regulated. In the case of a casino, it will depend upon the relevant casino licence. In the case of a non-casino gaming venue (hotel or club), while a venue operator's licence is relatively straightforward and readily available (but can still take six to 12 months for approval of new entrants), the number of gaming machines which such venue may be permitted to operate is limited based on the ‘entitlement' or permit/licence to operate those gaming machines. Various states (including NSW and Victoria) have implemented harm minimisation measures to cap the number of gaming machine permits/licences on issue in certain lower socio-economic areas.
6.5 What are the formal and documentary requirements to obtain a licence?
For the purpose of this question, the authors have focused on licensing for a corporate bookmaker licence to illustrate the process. The licensing process for a corporate bookmaker licence can typically take around six to nine months from the date of licence application and requires careful consideration of a range of matters, including the economic benefits which the licensee expects will be derived by NT (as detailed further below).
Working with local advisers with deep expertise in the gambling industry will assist applicants to navigate the application process, the likely areas of concern for Licensing NT and the ability to deal with industry specific issues in a timely and efficient manner.
Eligibility criteria: To be eligible to obtain a licence, applicants must be registered in Australia as a corporate entity under the Corporations Act 2001 (Cth). The eligibility criteria in respect of an applicant includes:
- whether it has or has arranged a satisfactory ownership, trust or corporate structure;
- whether it has or can obtain financial resources that are adequate to ensure the financial viability of the business proposed to be conducted and to obtain the services of persons who have sufficient experience in the management and operation of the business;
- whether it has sufficient business ability to establish and maintain the business proposed to be conducted; and
- whether it or any person to be involved in the management or operation of the business proposed to be conducted under the licence has any association with any person, body or association who or which, in the opinion of Licensing NT, is not of good repute having regard to character, honesty and integrity or has undesirable or unsatisfactory financial resources; and whether each director, partner, trustee, executive officer and secretary and any other officer or person determined by Licensing NT to be associated or connected with the ownership, administration or management of the operations or business of the applicant is a suitable person to act in that capacity.
Net economic benefit: In line with a directive from the minister for racing, gaming and licensing, issued pursuant to Section 19 of the Racing and Betting Act (1983), Licensing NT must ensure that all applications for a corporate bookmaker licence (including the renewal of a licence) are to include the applicant's proposal as to how they will satisfy the provision of economic benefits to the NT.
Economic benefits that may be provided by an applicant include, but are not limited to:
- direct payments to the NT government or NT sporting, racing and/or charitable bodies, in addition to existing taxation and fees imposed under NT legislation;
- sponsorships of NT events or sporting or racing bodies;
- joint venture arrangements with the NT government or NT-based businesses, charitable organisations or sporting/racing bodies to create new events that will drive tourism in the NT;
- business presence in the NT (eg, physical leases, local employment); and
- traineeships or internships.
To enable Licensing NT to properly consider an application for a corporate bookmaker licence, Licensing NT also requires from the applicant various detailed application and supporting documents, including a three-year business plan.
Key application documentation and bank guarantee: A comprehensive suite of documentation is required when applying for a corporate bookmaker licence issued by Licensing NT.
Documentation which is required includes:
- a standard application form, which requires disclosure of all key information;
- a deed of release and indemnity in respect of probity by all relevant persons;
- extensive probity related documentation in relation to directors and shareholders (the latter applying to any shareholder with a shareholding in the applicant of at least 10%);
- proposed terms and conditions, betting rules and regulations and policy documentation;
- the anti-money laundering/counter-terrorist financing programme and associated documents; and
- a comprehensive three-year business plan.
The licence application will also document the system approval requirements, which are the licensee's controls and administrative and accounting procedures. Applicants must also implement appropriate operational procedures (ie, control systems). Control systems serve to mitigate risk and the licensee must submit an internal control system document consistent with the relevant guidelines.
Currently, applicants for a corporate bookmaker licence must lodge a bank guarantee of at least A$200,000 which secures the obligations of the licensee under the licence, with the exact amount being subject to determination based on the financial resources and viability of the applicant. The current maximum prescribed under regulations is A$250,000.
6.6 What is the typical timetable for obtaining a licence?
Application and renewal - betting
Online and land-based betting is regulated at a state, territory, and federal level. Given that most new entrants to the market who wish to offer betting will typically apply for a Northern Territory sports bookmaker licence, the key legislation which is relevant is the Racing and Betting Act 1983 (NT). There is no limit on the number of licences which may be granted to Northern Territory licensed bookmakers and the licence will permit the offering of approved products into all Australian states and territories, as well as overseas jurisdictions in which it is lawful to do so.
(a) Domestic licence types:
Apart from exclusive land-based licences (which also permit online sales) and which are typically long-dated, the only licence types available are for a Corporate Bookmaker Licence or an on-course bookmaker licence (with an approval to take bets over the telephone and internet).
(b) Application process:
A licence application may be submitted to Licensing NT for a sports bookmaker licence by a locally incorporated entity (generally a proprietary limited company) or an overseas entity which is registered in Australia as a foreign body.
An application for a Corporate Bookmaker Licence is completed utilising a paper-based form or alternatively online. The application form itself is a relatively brief document however the supporting documentation required is substantial. As part of the application process the applicant is required to provide information in respect of all persons who are on the Board of Directors of the applicant, shareholders (with probity conducted on those who hold at least 10% of the shareholding) as well as key management who will be associated with the business.
In determining whether to grant or refuse a licence, Licensing NT must have regard to whether the applicant:
- is of good repute, having regard to character, honesty, and integrity.
- is of sound and stable financial background.
- has or has arranged a satisfactory ownership, trust, or corporate structure.
- has or is able to obtain financial resources that are adequate to ensure the financial viability of the business proposed to be conducted and to obtain the services of persons who have sufficient experience in the management and operation of the business.
- has sufficient business ability to establish and maintain the business proposed to be conducted; and
- or any person to be involved in the management or operation of the business proposed to be conducted has any association with any person, body, or association who or which, in the opinion of Licensing NT, is not of good repute having regard to character, honesty and integrity or has undesirable or unsatisfactory financial resources.
In addition, Licensing NT will have regard to whether each director, partner, trustee, executive officer and secretary and any other officer or person determined by Licensing NT to be associated or connected with the ownership, administration or management of the operations or business of the applicant is a suitable person to act in that capacity.
The detailed information required of applicants includes all typical probity information, as well as at least three years' audited financials. Where the applicant is a start-up up company, Licensing NT will require evidence that adequate financial resources/funding are available as required. This will typically involve the applicant demonstrating that it has sufficient financial resources and will fund the applicant in relation to its business operations.
Licensing NT will require the applicant to (amongst other things):
- pay an application fee of 20,000 revenue units, currently $25,400.
- establish a place of business in the Northern Territory (often licensees often have a second office in another jurisdiction (typically Melbourne, Victoria)).
- demonstrate that they will provide a ‘net economic benefit' to the Northern Territory.
- provide a bank guarantee of generally AU$200,000; and
- obtain full systems approvals,
as a requirement of being issued the licence.
The application process typically takes 6 to 9 months and can sometimes take longer.
Corporate Bookmaker Licences are typically issued for c. 4 year terms and require renewal after that time.
Application and renewal - other
Licences for other forms of gambling products (e.g. Keno or Lotteries) are issued on an irregular basis since these licences tend to be long-dated. Typically such licences would be offered in a multi-phased government licensing process incorporating the submission of expressions of interest followed by a select group being invited to apply for the relevant licence.
6.7 What costs are typically incurred in obtaining a licence?
The costs of obtaining a licence vary depending on the type of the licence. In the case of a corporate bookmaker licence, in addition to application costs payable to authorities (eg, c.A$25,000 for an NT sports bookmaking licence), the costs of advisers to apply for and establish the bookmaking business very much depend upon the requirements of the client and can be anywhere from approximately A$100,000 upwards.
The costs of obtaining, say, a casino or other major licence will typically be in the millions.
7 Ongoing compliance
7.1 What are the operator's rights and obligations under the licence?
The operator's rights under the licence are to provide gambling services as specified in the licence conditions. The licence conditions in state and territory licences are generally quite extensive and regulatory bodies will often seek to take enforcement action where obligations are not met. The obligations typically relate to conducting the gambling services business in a responsible manner, paying all taxes and levies to government and meeting all regulatory and other obligations including in relation to the Anti-Money Laundering/Counter-Terrorism Financing Act 2006 (Cth).
7.2 Can licences be transferred? If so, how? What restrictions apply?
Licences typically cannot be transferred; however, where they are held by a corporate entity, the ownership of the corporate entity could be transferred, which would generally trigger new probity enquiries of the new owner(s) similar to a new licence application process.
7.3 What requirements and restrictions apply to the different types of gambling facilities in your jurisdiction?
Please see question 6.
8 Penalties and sanctions
8.1 What penalties and sanctions are available to the authorities for breach of the gambling legislation?
Gambling businesses can incur sanctions for breaching their licence conditions or breaching legislation, or both. This will often vary depending on three factors:
- Licensing body: Some states and territories have multiple bodies that can issue licences. The possible sanctions imposed will depend on the framework these bodies operate in and the rules that they impose.
- Conditions of licence: Generally, state and territory regulators impose a set of general conditions on their licensees. However, provisions generally exist allowing the regulating body to impose additional licence conditions or issue directions where they see fit.
- Jurisdiction: The jurisdiction in which a licensee is licensed is also relevant to possible sanctions and the types of conduct that give rise to sanctions can differ depending on the laws of that jurisdiction.
For the sake of brevity, we have not itemised each of the eight state and territory jurisdictions and how sanctions can be applied.
At the federal level, breaches of the Interactive Gambling Act (IGA) carry significant penalties. For example, breaches of certain provisions can result in a civil penalty of up to 7,500 penalty units for individuals (A$1.665 million) or five times that amount for corporations (A$8.325 million).
It is important to note that the IGA is stated expressly to have extraterritorial effect (ie, it applies to overseas operators that breach the IGA by offering to prohibit gambling services into Australia). The Australian Communications and Media Authority (ACMA) has the power to notify international regulators of contraventions of the IGA by their licensees.
Individuals: Generally, liability is placed on the gambling services provider to comply with the various legislative requirements, rather than the customer. However, in some limited circumstances, a customer can also be held liable. For example, in Western Australia, individuals can be penalised if they are a minor who places a bet (see Section 22 of the Betting Control Act 1954 (WA) (BCA)) or if they place a bet on an Australian race with an operator who is unlicensed (see Section 23 and 24 of the BCA).
Directors and officers: There are some circumstances where the criminal conduct of the licensee (assuming it is a company) are extended to the directors or officers of the company. For example, under Section 53 of the Unlawful Gambling Act 1998 (NSW), directors or officials also commit an offence if they aid, abet, counsel, procure, incite or conspire with others to commit the criminal offence of the gambling entity.
At the federal level, an example is that ACMA can notify border protection agencies of the names of directors, principals and officers of operators acting in contravention of the IGA. These names may then be placed on a ‘movement alert list', thereby disrupting any travel to and from Australia. In addition, there are ancillary liability provisions which mean that in certain circumstances, those individuals who aid, abet, counsel, procure, incite or conspire with others to breach the IGA will incur a civil penalty as if they had breached the IGA themselves.
Agents: There are certain circumstances whereby persons who aid or abet criminal activities also commit a criminal offence. At the federal level, ACMA's compliance priorities 2021–22 indicate a focus on affiliate services – websites that advertise or promote online gambling services and provide links to them. This focus means that ACMA will target affiliate services that are breaking advertising laws or helping to provide illegal gambling services in Australia.
The discussion above relating to ancillary liability provisions will also likely capture directors, officers and principals of these affiliate services. At the state or territory level, some advertising restrictions also capture the publication of advertisements by marketing affiliates utilised by licensed operators.
Payment processors and internet service providers: As stated above, there are certain situations whereby persons who aid or abet criminal activity are at risk of committing an offence themselves. This also extends to those involved in money transfers in certain situations. There are currently no legislative requirements placed on internet service providers (ISPs) to implement geo-blocking or other similar measures to prevent Australians from accessing illegal or unlicensed gambling content.
However, ACMA has the power to request that ISPs block access to offshore online gambling operators it considers to be operating illegally in Australia (see Section 313 of the Telecommunications Act 1997 (Cth)).
ACMA also maintains a list of the illegal websites it has blocked and publishes this on its website. As of 14 December 2021, 368 websites had been blocked by ACMA. Additionally, ACMA publishes a list of approved operators that hold an Australian licence to assist Australian consumers who are gambling online to make informed decisions.
9 Advertising and marketing of gambling
9.1 What requirements and restrictions apply to the advertising and marketing of physical and remote gambling in your jurisdiction? Do these vary depending on the type or location of the activity, or the medium through which it is carried out?
Retail wagering licensees and corporate bookmakers are permitted to advertise and market their products subject to strict prohibitions which prevent them from offering inducements (ie, a credit, voucher, reward or other benefit) to open a betting account, or in some jurisdictions to gamble or gamble more frequently. There are also a number of other restrictions, which are principally focused on harm minimisation. These were brought about as a result of the National Consumer Protection Framework.
The federal government has enacted ‘rules' which restrict gambling advertising and odds promotion during broadcasts of live sport, with one key objective being to limit its exposure to children. These rules have been extended to online streaming of live sport.
Casino licensees are permitted to broadly advertise their gambling services, but there cannot be any advertising of slots. Casino advertising is often low-key in Australia.
Lotteries licensees have a broad ambit to advertise and market their products and, unlike retail wagering licensees and corporate bookmakers, can offer inducements to open an account. One exception to this is in the case of keno licensees in Victoria.
Hotels and clubs operating slots cannot advertise their products other than in connection with a player loyalty scheme. They can, however, broadly advertise their business.
Certain other restrictions apply to protect children and vulnerable persons, such as a prohibition on billboard advertising near schools.
Each state and territory regulates services offered in its jurisdiction and there can often be overlapping regulatory obligations which need to be complied with.
Separately, the Competition and Consumer Act 2010 (Cth) imposes penalties for, among other things, misleading and deceptive conduct (including through advertising).
10 Consumer protection
10.1 What social responsibility obligations apply to land-based and remote gambling operators in your jurisdiction? Do these vary depending on the type or location of the activity, or the medium through which it is carried out?
All gambling-related licences issued by a state or territory are subject to strict requirements relating to consumer protection, responsible gambling and harm minimisation. Included in this are restrictions at a state and territory level in relation to gambling advertising and also inducements to open an account and, in some jurisdictions, to gamble or gamble more frequently.
In addition, the federal government has introduced amendments to the Interactive Gambling Act to restrict gambling advertising and odds promotion during broadcasts and online streaming of live sport, with more stringent restrictions occurring during the hours of 5:00 am to 8:30 pm.
In November 2018, all state and territory gaming ministers agreed to a National Consumer Protection Framework for online wagering, which has been progressively implemented with the objective of having a nationally consistent approach to harm minimisation measures, such as a prohibition on inducements (eg, first deposit bonuses) being offered to a prospective customer to open a betting account or to refer others to open an account, mandatory opt-out pre-commitment and a national self-exclusion register (which is expected to be established in late 2022).
State and territory law also requires the use of mandatory responsible gambling messaging in connection with gambling advertising and promotion.
10.2 What other general consumer protection requirements are of relevance for gambling operators in your jurisdiction?
Organised crime and match fixing: Match fixing is dealt with under relevant criminal legislation in most jurisdictions (eg, in New South Wales, Part 4ACA of the Crimes Act 1900 (NSW)). Under legislation in most Australian jurisdictions, wagering operators must enter into integrity agreements with each relevant racing controlling body and the leading sporting bodies on which they offer betting products.
These agreements allow the operator to use, among other things, the statistical information relating to the sporting or racing events (and participants) in return for a fee and on the condition that they agree to cooperate with these bodies by providing information about their customers' betting patterns and behaviour to assist in the investigation of match-fixing. In August 2017, the federal minister for sports, Greg Hunt, announced a review of Australia's sports integrity arrangements to be led by James Wood AO QC (Wood Review). As part of the federal government's response to the recommendations that arose from the Wood Review, the Department of Health was given the responsibility of developing a federal regulatory framework for sports integrity. This is known as the Australian Sports Wagering Scheme (ASWS). The purpose of the ASWS is to safeguard the integrity of Australian sport and provide a sports integrity framework for sports wagering regulation at the federal level.
11 Financial crime
11.1 How does the gambling regime interface with money laundering/terrorist financing/proceeds of crime legislation in your jurisdiction?
Money-laundering: Under the Anti-Money Laundering and Counter-Terrorist Financing (AML/CTF) Act and corresponding rules (collectively, ‘the AML/CTF laws'), gambling operators in Australia must comply with several strict reporting and procedural obligations, including:
- conducting verification and ongoing due diligence of the identity of all customers who open an account with a retail wagering licensee, on-course or corporate bookmaker. Identification and verification of customers and ongoing due diligence obligations also apply in certain other scenarios, such as in a retail environment where cash of A$10,000 or more is paid or received or a suspicious matter arises;
- maintaining an AML/CFT program which outlines how they will comply with their obligations under the AML/CTF Law;
- regularly submitting to the Australian Transaction Reports and Analysis Centre (AUSTRAC), the body responsible for enforcing the AML/CTF laws, all suspicious matter reports, threshold transaction reports, compliance reports and international fund transfers; and
- keeping records of all transactions, electronic funds transfers, customer identification procedures, AML/CTF programmes and due diligence assessments.
The penalties for non-compliance with the AML/CTF Law are significant.
In 2015, AUSTRAC filed an action in the Federal Court against three Tabcorp Group companies for "extensive, significant and systemic non-compliance" with the AML/CTF Law. In March 2017, the Federal Court approved a settlement agreement under which Tabcorp agreed to pay AUSTRAC a A$45 million penalty (and costs) for contravention of the AML/CTF laws.
In 2019, various allegations that Crown Resorts and its associates had engaged in money laundering and possible links to organised crime were raised by various media outlets. As a result, the New South Wales (NSW) Independent Liquor and Gaming Authority convened an inquiry to consider the suitability of Crown Resorts and its NSW subsidiary to hold a casino licence. The inquiry ultimately decided that Crown Resorts was not suitable and recommended in respect of Crown Resorts and its NSW subsidiary that several measures that should be implemented to achieve suitability (see question 7).
More recently, the new NSW Independent Casino Commission has issued The Star with a ‘show cause' notice and has advised that it is considering its options for disciplinary action following findings and recommendations arising from the Bell Review announced in September 2021. The Bell Report was released on 31 August 2022 and made a number of findings and recommendations, including in relation to AML/CTF issues and responsible gambling compliance.
Additionally, in October 2020, AUSTRAC identified potential non-compliance with AML/CTF laws by Crown Resorts in relation to a casino in Melbourne. This included concerns over customer due diligence and adopting, maintaining and complying with an AML/CFT program. AUSTRAC has commenced civil proceedings for numerous alleged breaches of the AML/CTF Law.
Crown Resorts has now been granted conditional approval to allow it to open its casino in Barangaroo, NSW.
12 Non-gambling activities/social gambling
12.1 What specific activities, if any, are exempted from the gambling regime in your jurisdiction (eg, prize contests/sweepstakes/free prize draws/e-sports)?
As a general rule, social games (no prize money) and skill games (no element of chance) are not classified as being a gambling activity and, as such, are not generally regulated under the relevant gambling laws.
Skill games with no element of chance may, when operated online, fall within certain ‘interactive gaming' regimes regulated by state and territory gambling regulators.
12.2 How is ‘social gambling' defined in your jurisdiction and how is it regulated (if at all)?
By definition, a ‘game' constitutes ‘gambling' if the following three elements are present:
- prize element – the game is played for money or anything else of value;
- chance element – the game is a game of chance or of mixed chance and skill; and
- consideration element – a customer of the service gives, or agrees to give, consideration to play or enter the game.
Generally, the prize element and/or consideration element will not be present in a social game and in those circumstances social games will not constitute gambling or require a licence.
13 Disputes and legal enforceability
13.1 Are gambling contracts enforceable as a matter of law?
Gambling contracts are generally enforceable as a matter of law, unless against public policy.
13.2 In which forums are gambling disputes typically heard in your jurisdiction? What issues do such disputes typically involve?
It is rare for gambling disputes to be heard in Australia, with the exception of enforcement activity brought by state and territory gambling regulators against licensees. These are often for advertising inducement and responsible gambling-related issues and are generally heard in lower courts.
Gambling disputes also arise in the context of customer complaints which are managed by the relevant regulatory bodies and/or escalated through tribunals and courts.
13.3 Have there been any recent cases of note?
The licensee of the second casino licence in New South Wales, Crown, was recently subject to an inquiry under section 143 of the Casino Control Act 1992 (NSW) and was found to not be a suitable person to hold such a licence (known locally as the Bergin Inquiry). The licensee engaged in ongoing consultation with the Independent Liquor and Gaming Authority (ILGA) to seek to address the issues raised in the Bergin Inquiry and in June 2022 ILGA issued a provisional permit to allow the gaming floor to open. In addition to the Bergin Inquiry, royal commissions were established in each of Victoria and Western Australia, with the licensee being found to be unsuitable to hold a casino licence but being given the opportunity to become suitable. In the case of Victoria, this is to occur over a 24-month period under the supervision of a government-appointed special manager.
In addition to Crown, a review was also activated under section 143 of the Casino Control act 1992 (NSW) into The Star and its Sydney casino. Adam Bell SC delivered his findings in relation to The Star's suitability to hold a casino licence and compliance with its legal obligations on 31 August 2022 and found The Star unsuitable to hold a casino licence in NSW. The Star has since been issued by the NSW Independent Casino Commission with a notice to show cause and disciplinary action is under consideration.
Further, The Star was also subjected to an external review of its Queensland operations on the Gold Coast and Brisbane conducted by the Hon. Robert Gotterson AO KC with public hearings occurring during July and August 2022. At the time of writing, a report has been delivered to the Queensland Attorney-General with the findings expected to be publicly released in the short term.
14 Trends and predictions
14.1 How would you describe the current gambling landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?
Online wagering: The online wagering sector in Australia has never been more buoyant, with total spend reaching A$6.9 billion in 2020. Wagering operators have heightened their efforts in relation to customer retention and acquisition strategies.
According to an Australian Institute of Family Studies survey of more than 2,000 Australian punters in July 2020, one in three participants – mostly young men – registered new betting accounts during COVID-19 and the number who visited gambling sites more than four times a week grew from 23% to 32%.
According to the findings from the 2021 the Australian Communications and Media Authority (ACMA) Annual Consumer Survey into Online Gambling Australia (February 2022), more than one in 10 Australian adults (11%) had gambled online in the six months to June 2021, up from 8% in 2020. The 2021 survey also asked respondents to report how frequently they gambled before the pandemic and during the strictest COVID-19-related restrictions in their area. While the majority of online gamblers (77%) reported the same frequency of gambling activity in June 2021 and before the pandemic, 16% indicated a higher frequency in June 2021 than before the pandemic.
Gambling advertising expenditure has also increased significantly in recent years. According to Nielsen Media Research, the gambling industry's spending on advertising increased from A$90 million in 2011 to A$252 million in 2020. Australia's largest online bookmaker, Sportsbet, spent A$139 million in 2020, accounting for 55% of total gambling industry advertising spend.
Casinos: Systemic issues have been identified across the casino sector regulatory framework and operator conduct at large, particularly in relation to the Crown and The Star casinos. The casino industry, including regulatory bodies, will remain an area of focus for governments and other stakeholders, and further reforms for the sector are likely given the number and extent of established and alleged governance and compliance failures. These are set out below.
New South Wales Inquiry: This inquiry, overseen by former Supreme Court judge Patricia Bergin SC, was established in August 2019 by the Independent Liquor and Gaming Authority (ILGA) in New South Wales (NSW). It was largely concerned with alleged anti-money laundering/counter-terrorist financing (AML/CTF) and governance-related shortcomings across Crown's Melbourne and Perth casinos and did not focus on the NSW jurisdiction or the only operational casino in NSW, The Star Casino.
The inquiry received and heard extensive submissions and evidence, including from the public and via public hearings involving Crown executives, directors, regulators and others. Australian Transaction Reports and Analysis Centre, Australia's anti-money laundering regulator, is principally responsible for compliance and enforcement of the AML/CTF Act and has ongoing inquiries on foot involving major Australian casino operators.
Commissioner Bergin found Crown unsuitable to operate its Sydney Barangaroo casino. The commissioner did, however, leave open a pathway for Crown to achieve suitability should sufficient changes occur, including board renewal, the preparation and delivery of a detailed remediation plan to ILGA and the strengthening and monitoring of anti-money laundering controls that ILGA might consider when making its decision.
The NSW Inquiry report made 19 recommendations, including proposed reforms to the regulation of casinos in NSW, including the creation of a standalone independent Casino Commission with extensive powers akin to those of a standing royal commission. A further significant recommendation was that NSW legislation be amended to ban NSW casinos dealing with junket operators. The NSW government announced that it accepts all recommendations and will move to implement revised regulatory structures in the state.
After undertaking various remedial activities, Crown was granted a provisional permit to open its gaming floor in June 2022.
Victorian Royal Commission: Given the nature of the issues aired during the NSW Inquiry, in late February 2021, the governor of Victoria appointed Ray Finkelstein AO KC as commissioner and chairperson of a Victorian Royal Commission into the casino operator and licence in that state. Crown Resorts operates the Crown casino and entertainment facility in Melbourne, which is one of the city's most visited attractions for tourists and residents alike and is a significant employer.
Crown admitted to various matters raised during the commission, including:
- underpaying state gaming taxes;
- allowing what was purported to be money for hotel services to be used for gambling;
- allowing customers to gamble for a prolonged period; and
- not cooperating as required with the Victorian gambling regulator.
The commissioner's report was delivered to the governor of Victoria on 15 October 2021. Among the key findings and recommendations, the commissioner determined that Crown was unsuitable to operate its flagship Melbourne resort but did not recommend that Crown's licence be cancelled, citing the considerable harm to the Victorian economy and innocent third parties that would arise from a cancellation and noting significant steps taken towards reform, including the appointment of a new board and senior executive team. Instead, the commissioner effectively provided Crown with two years in which to prove that it is suitable to operate that casino.
Ultimate decision making during this period now rests with a ‘special manager' appointed to oversee Crown's operations and to report to the Victorian regulator at regular intervals on Crown's performance against reform efforts. Following the conclusion of the two-year period, the regulator will make its decision as to whether it is "clearly satisfied" that Crown has returned to suitability, having regard to the reports from the special manager and the other inquiries mentioned in this article.
The Casino and Gambling Legislation Amendment Bill 2021 (Vic) establishes, among other things, the position of special manager, the supporting regime around the role and the new Victorian Gambling and Casino Control Commission. The bill was passed by both houses of the Victorian Parliament on 2 December 2021.
Perth Casino Royal Commission: On 5 March 2021 a royal commission into Crown Perth and its suitability to continue to hold a casino gaming licence in Western Australia was established. The commissioners – Neville Owen AO, Lindy Jenkins and Colin Murphy PSM – examined the regulatory framework in Western Australia for casino gaming and assessed the performance of the Gaming and Wagering Commission, the regulatory body with responsibility for monitoring Crown Perth's compliance.
In an interim report tabled in the Parliament of Western Australia in August 2021, the commissioners advised that they were investigating alleged conflicts of interest between departmental officers and casino employees, in addition to whether criminal organisations were likely to have laundered money at Crown Perth and other matters.
A final report with findings and recommendations was presented to the minister on 4 March 2022 and then tabled in Parliament. Crown has been found to be unsuitable to hold a gaming licence in Western Australia; but rather than its licence being revoked, the Royal Commission has proposed a number of changes which Crown Perth must undertake. These are significant reforms.
Review of The Star (Sydney): A review of The Star and its Sydney casino commenced in November 2021 and was undertaken by Adam Bell SC. Adam Bell's findings and recommendations were handed down on 31 August 2022.
The terms of reference for the review included an assessment of suitability and an examination of the extent to which The Star was compliant with legislation, licence conditions and related agreements and an assessment of the administration of systems to ensure that operations were conducted honestly and free from criminal influence or exploitation. The review also assessed, among other things, the implementation and administration of gaming harm minimisation programs and the management of VIP patrons, high rollers and international patrons at The Star.
In finding that Star Entertainment was not suitable to be concerned in or associated with the management and operation of a casino in NSW, Adam Bell SC cited a number of practices including the use by high roller patrons of CUP debit cards to fund gambling which was in breach of Chinese laws and not appropriately disclosed to banking partners, permitting the Suncity junket to operate in the casino, including with a cash cage, and giving rise to money laundering risks and in breach of casino licence conditions and an inappropriate approach to governance and risk. The review also noted evidence of patrons gambling at The Star for long periods of time, including for more than 24 hours, with no intervention contributing to a recommendation that carded play by compulsory at The Star for all gambling (requiring that patrons are identified and that their exclusion status (if any) is enforced.
External review of the Queensland operations of The Star Entertainment Group: At the time of writing, Robert Gotterson AO KC has delivered his report to government following a review into The Star's Gold Coast and Treasury Brisbane casinos. The inquiry followed the New South Wales review referenced above and received evidence regarding The Star's anti-money laundering processes, approach to gambling hard minimisation, management of VIP patrons, high rollers and international patrons, the use of CUP credit card facilities to facilitate gambling by Chinese nationals and whether patrons excluded in NSW were encouraged or incentivised to attend The Star's Queensland casinos.
Independent review into SkyCity: Following the commissions of inquiry undertaken in NSW, Victoria and WA, the South Australian regulator announced in July 2022 that an independent review would be taken into SkyCity, the operator of the Adelaide casino. The review will investigate, among other things, the suitability of SkyCity to hold the casino licence and of its parent company to be a close associate of the licensee and related matters. A written report of Brian Martin AO QC's findings is due to be delivered by 1 February 2023. Fallout: The consequences for Crown Resorts and The Star have been, and are likely to continue to be, significant. Significant changes have been made to the board, management and staff. Changes have also occurred at the regulators, including:
- Western Australia's chief casino officer standing down; and
- the break-up the Victorian Commission for Gambling and Liquor Regulation and the implementation of a new gambling and casino control commission with a dedicated division for the casino – the Victorian Gambling and Casino Control Commission (VGCCC).
An A$8.9 billion bid was made by Blackstone for the company following the rejection of an initial approach in 2021. Blackstone subsequently took control of Crown in July 2022.
The Australian Securities and Investments Commission publicly announced in March 2022 that the directors and senior executives of Crown would not be legally pursued for potential breaches of corporate law because the claims were too old and there was a lack of hard evidence to bring a winning legal case, despite the royal commissions lambasting their misconduct.
New developments: The Casino and Liquor Legislation Amendment Bill 2022 (Vic) has recently been passed, granting Victoria's casino regulator, the VGCCC, enhanced powers. The legislation incorporates some of the recommendations from the Royal Commission into Crown Melbourne, with key changes including the following:
- Casino inspectors have been given greater access to casino records and surveillance equipment;
- Casino staff are now required to assist inspectors to access and operate surveillance equipment monitoring the gaming floor'
- The powers of the VGCCC in relation to gambling harm minimisation have been enhanced;
- The VGCCC can now take action against Crown Melbourne for a single breach of the Code of Conduct; and
- Liquor regulation has been transferred to the Department of Justice and Community Safety.
These reforms are in addition to legislation passed in 2021 which increased the maximum penalty that the VGCCC can impose for disciplinary action, with fines increasing from A$1 million to A$100 million.
Legislation to address Royal Commission recommendations passed through the Western Australian Parliament in September 2022 in the form of the Casino Legislation Amendment (Burswood Casino) Act 2002 (WA). The legislation provides the Minister and Gaming and Wagering Commission with greater powers to implement the recommendations, significantly increases maximum penalties for non-compliance to A$100 million and provides for an Independent Monitor to oversee remediation processes within the casino. We anticipate similar changes in relation to casino legislation in New South Wales and Queensland.
Sports Wagering Scheme: Sports Integrity Australia released the Australian Sports Wagering Scheme (ASWS) Consultation Regulatory Impact Statement on 30 November 2021.
The objectives of the ASWS are to:
- streamline sport integrity aspects of sports wagering regulation to provide clarity, transparency and consistency at a national level and ensure that sports wagering occurs within a framework that protects the integrity of sport;
- strengthen the link between Commonwealth government funding and sport integrity outcomes;
- encourage the development of integrity capability within sporting organisations and facilitate sporting organisations' access to revenue streams from wagering on their sport; and
- develop a robust integrity framework for national sporting organisations, event controllers and wagering providers.
The purpose of a statement is to undertake a rigorous process to reach an evidence-based policy solution to an issue with a clear rationale for government intervention to address the problem with the current situation.
National Self-Exclusion Register: One of the most eagerly awaited aspects of the National Consumer Protection Framework, the introduction of a national self-exclusion register, remains to be implemented despite being due for delivery in mid 2022. This follows the passing in December 2019 of the Interactive Gambling Amendment (National Self-exclusion Register) Act 2019 (Cth) and the National Self-exclusion Register (Cost Recovery Levy) Act 2019 (Cth), which enabled the establishment and operation of the register and addressed important issues, including the security of information.
As opposed to the current disjointed approach that requires people who want to self-exclude to contact multiple operators, involving undue friction and leaving potential vulnerabilities, the new regime provides for a ‘one-stop shop' self-exclusion service from all betting operators registered in Australia offering online or telephone betting. The self-exclusion can be temporary (with a minimum period of three months) or permanent. Registered people will also have the option to revoke or extend their period of exclusion.
Under the new regime, licensed betting operators will be prohibited from:
- offering their services to such individuals;
- sending them advertisements/promotions;
- making (or causing to be made) any telemarketing calls to such persons; and
- sharing their private information for marketing purposes.
If a licensee breaches these prohibitions without an available defence, it will face penalties of up to 750 penalty units for corporations per day (equivalent to A$166,500).
The costs of establishing and maintaining the register are to be borne by the industry, with rules having been introduced in July 2022.
Gambling licensing process: Gambling licences issued by the various states and territories of Australia – including for casinos, retail wagering, lotteries and keno – are typically long-dated. As such, licensing opportunities for these types of gambling businesses do not arise regularly and are often contested.
There are two major licensing processes underway in the Australian market, in Victoria and Western Australia.
Wagering in Victoria: The current Victorian wagering and betting licence is held by the Tabcorp group and expires in August 2024. As in some other jurisdictions in Australia, the holder of the current licence was required to make an upfront payment to the government to acquire the licence and to maintain a close contractual and operational relationship with the local racing industry. In Victoria, this takes the form of an unincorporated joint venture arrangement for the conduct of pari-mutuel and fixed-odds betting online, on the course, over the phone and in retail locations. The licensee also offers simulated race wagering but has not taken up the right to operate a betting exchange.
Unlike in some other jurisdictions, apart from on-course bookmaking by licensed bookmakers, due to exclusivity arrangements secured with the relevant government, there has only been one operator in each state and territory permitted to conduct retail betting operations. Some industry participants and potential applicants for the licence advocated for significant regulatory changes in the state, including shifting away from the current approach to exclusivity and sole-licence model.
The licence award process is ongoing at the time of writing.
Wagering in Western Australia: The Western Australian government commenced a long-awaited sale process for the Western Australian Totalisator Agency Board (TAB), the last government-owned TAB in Australia, in late September 2019. A discussion paper issued by the Department of the Treasury noted that the local racing industry relies heavily on the Western Australian TAB for funding, but that the TAB faces several challenges common to incumbent retail operations in other states and territories, including intense competition from larger operators, growth in online betting and customer preferences shifting from the TAB's traditional strengths. Many of those pressures have intensified as the effects of COVID-19 impact on market dynamics and the operations of retail-exposed wagering operators.
The Western Australian government subsequently announced in October 2021 that a new sale process will commence, with a revised licence structure on offer. Expressions of interest were open until 16 November 2021. Among the key differences in approach under the new framework is that the licensee will not be responsible for funding of the Western Australian racing industry. At the time of writing, no announcement has been made regarding a successful bidder.
Keno: Victoria's keno licences have recently been granted under a two-licence model to Tabcorp and Lottoland after a competitive tender process. The two licensees can provide keno online for the first time, as well as through traditional retail outlets, backed by harm minimisation and consumer protection measures.
Tabcorp and Lottoland will both be authorised to conduct and distribute the game of keno in eligible hotels, clubs, wagering outlets and electronically throughout Victoria.
Pursuant to the changed legislative structure, the minister issued harm minimisation directions in April 2022, which apply to both Victorian and interstate keno game providers when providing keno to people in Victoria. The directions focus on key areas such as:
- direct marketing;
- account closure;
- deposit limits;
- activity statements;
- responsible gambling messaging; and
- maximum draw frequency.
These directions are based on the National Consumer Protection Framework for online wagering, with additional elements to support online keno specifically.
15 Tips and traps
15.1 What are your top tips for gambling operators in your jurisdiction and what potential sticking points would you highlight?
- Ensure that a licensee develops a robust framework for managing advertising, responsible gambling and anti-money laundering/counter-terrorism financing compliance, among other things;
- Implement a detailed training programme as part of this, with training rolled out to all layers of management; and
- Report regularly to the board of directors and other key stakeholders and ensure effective information flows between the management and the board.
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.