Gamblers, overseas gambling providers flouting Interactive Gambling Act: Report

Interactive Gambling Act 2001 Review Interim Report finds as many as 2200 online gambling providers could be offering services to Australians in contravention of the Act

The Federal Government’s investigation into the effectiveness of the Interactive Gambling Act 2001 (IGA) has delivered a damning assessment of the Act’s ability to minimise harm from problem gambling and deter Australians’ access to foreign online gambling services.

According to the Review of the Interactive Gambling Act 2001 Interim Report, the Act is making only a very minor contribution to its goal of reducing harm to problem gamblers and to those at risk of becoming problem gamblers.

“The IGA may in fact be exacerbating the risk of harm because of the high level of usage by Australians of prohibited services which may not have the same protections that Australian licensed online gambling providers could be required to have,” the report reads.

According to the report, estimates suggest that up to 2200 online gambling providers currently offering services to Australians may be in contravention of the Act.

In addition, estimates suggest that Australian gamblers are losing as much as $1 billion per annum to overseas-based online gambling service providers.

In response to this, and the growth in the number of Australians accessing overseas-based services, the report recommends the government encourages overseas providers to become licenced in Australia. In exchange for increased legitimacy, the services would need to conform to a set of harm minimisation measures and limit services to lower risk gambling forms such as tournament poker.

The stick to accompany the report’s carrots would be that service providers who do not conform to these measures would be prohibited under the Act. Law enforcement and prevention measures against illegal providers would also be increased.

Under the recommendations, the Australian Communications and Media Authority (ACMA) should be the body responsible for administering civil penalties for the provision of prohibited gambling services hosted in Australia.

If civil penalties and takedown notices prove ineffective for services in contravention of the updated Act, then the ACMA would refer the service provider to the Australian Federal Police (AFP). The AFP would be able to place the names of principals and directors of prohibited online gambling service providers onto a Movement Alert List, as well as refer these names to relevant state/territory authorities and the Australian Securities and Investments Commission (ASIC).

However, the report acknowledges there is little to be done for overseas-based operators who chose not to become licences in Australia, stating that the government must “recognise the limits of enforcement action against overseas-based companies, many of which operate out of countries which actively seek to attract such companies and provide them with legal protection”.

In light of this, the report recommends co-opting the financial sector to effectively police offshore gambling through the creation of ‘safe-harbour’ allowances for financial institutions that choose to voluntarily block financial transactions between Australian consumers and unlicensed online gambling service providers.

In conjunction with this, the report recommends that the Department of Broadband, Communications and the Digital Economy (DBCDE) and Treasury should, “...continue to monitor developments overseas in the use of financial payment blocking to prohibited gambling sites and draw relevant developments to the attention of Australian financial industry bodies.”

The review follows the 2010 Productivity Commission’s 2010 Gambling report which found online gaming and wagering had exhibited strong growth over the last 10 years and that the Australian ban on accessing online gaming had decreased traction over time.

“While the risks associated with online gambling are likely to be overstated, the relatively high prevalence of problem gamblers is still a cause for concern,” the Gambling report reads. “At the very least, it indicates that the internet is very attractive to this group and, though the evidence is weak, gambling online may exacerbate already hazardous behaviour.”

A key recommendation of the Report is that the Australian Government, in consultation with state and territory governments, should amend the Interactive Gambling Act to permit the supply of online poker card games.

In November, Australian online betting companies called for the relaxation of online gambling laws, claiming the regulations restrict them from competing with offshore companies.

Also during November, the Internet Industry Association (IIA) cautioned against placing the onus of protecting problem gamblers on internet service providers, instead arguing that problem gambling must be managed at the point of service access.

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More about Australian Federal PoliceAustralian Securities & Investment CommissionFederal GovernmentFederal PoliceIIAInternet Industry AssociationProductivity Commission

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