Overview

Today, the Hon. Alan Tudge MP, Federal Minister for Human Services, released the Final Report (Final Report)1 of the Review of Illegal Offshore Wagering conducted by the Hon. Barry O’Farrell (O’Farrell Review) and the response of the Federal Government to the recommendations set out in the Final Report (Government Response)2.

In September 2015, the O’Farrell Review was convened to consider the measures available under Australian law to address the activities of illegal offshore wagering operators. Further background to the O’Farrell Review is set out in our Focus Paper entitled “Australia – Review of Illegal Offshore Wagering – Australian Government announces review of Australian gambling laws targeting illegal online offshore operators”.3

During the course of the O’Farrell Review and since it was delivered to the Federal Government on 18 December 2015, there has been much speculation about the possibility of reforms being made to the Interactive Gambling Act 2001 (Cth) (IGA) to allow for the legalisation of online in-play betting on sports (an activity prohibited under the IGA since its introduction in 2001). This has occurred in the context of extensive promotion of their services by leading Australian licensed wagering operators, which has given rise to adverse comment in the press.

Government Response

In its response to the Final Report, the Government has accepted 18 of the 19 recommendations made by the O'Farrell Review. The sole recommendation not accepted relates to the recommendation in the Final Report to consider the relaxation of the online in-play prohibition in the IGA.

There are a number of key statements made in the Government Response.  Of particular note is the clear statement that the Government does not intend to expand the legal online betting market. Likewise, it does not propose to consider any relaxation of the prohibitions relating to online gambling. Finally, the Government has indicated that it proposes to introduce legislation to make it clear that the “click-to-call” services being provided by certain of the Australian licensed corporate bookmakers are not permitted on the basis that they are contrary to the policy underlying the IGA.

As a result, Australia's regulatory regime relating to online gambling will remain inconsistent with the regulatory regimes in countries like the United Kingdom, Italy, Spain, Ireland and Denmark.

Recommendations

There are three categories of recommendations in the Final Report and Government Response:

  • those principles directed at achieving greater harm minimisation for Australian consumers of licensed Australian wagering operators;
  • those principles targeting illegal offshore gambling operators; and
  • those principles directed at the activities of the leading Australian licensed wagering operators.

Harm minimisation standards

The Government has set out a number of matters that it considers should be the subject of a national consumer protection framework. A series of minimum standards should be developed within the next 12 months by agreement between the Federal Government and the States/Territories. Among the matters to be addressed are:

  • consistent nationwide research into problem gambling;
  • a national self-exclusion scheme;
  • a voluntary pre-commitment scheme;
  • a prohibition on credit betting;
  • training by licensed online operators of staff  in the responsible conduct of gambling;
  • the provision of activity statements to customers;
  • a reduction in the period in which customer verification must be conducted; and
  • consistent messaging and a single national gambling hotline that operates consistently nationwide.

Many of these measures are not new and are consistent with recommendations set out in the Report conducted by the then Department of Broadband, Communications and Digital Economy in its 2012 Review of the IGA (DBCDE Report).4 

However, there is no doubt that action is required for a number of the policies to operate more consistently nationally. It is also to be hoped that they result in the harmonisation of the rules relating to the promotion of wagering products.

Measures to address illegal offshore operators

The key measure recommended in the Final Report is for the antiquated and limited prohibition in the IGA relating to gambling services to be extended so that it covers all online gambling services, with the exception of services provided by Australian licensed operators.

In addition, the Final Report recommends that:

  • the prohibitions extend to agents and affiliates;
  • the publication of  a  “name and shame" list (which includes the names of operators and their directors and principals) and distribution of that list to overseas regulators in licensing jurisdictions;
  • the conferral of additional powers on the ACMA, including the civil penalty powers contemplated in the DBCDE Report;
  • the introduction of a “bad actor” provision in the IGA so that operators listed in the "name and shame” list will not be entitled to obtain a gambling licence in Australia; and
  • consultation with ISPs and banking and financial institutions to implement measures that will target offshore wagering operators.

Many of these recommendations are not new. However, it may be considered that certain of these recommendations will only have a practical effect if they encourage offshore operators to come “onshore”, which appears to be one of the objectives of the recommendations in the Final Report and the Government Response.

In view of the continued prohibitions on online gambling in the IGA, this may be overly optimistic. In addition, as indicated in the Final Report, these measures are only likely to be heeded by the more reputable operators. This, of course, suggests that, if Australian consumers continue to gamble online with offshore operators, they will only be doing so with the less reputable operators!

Measures directed at Australian operators

In addition to the proposed prohibitions on the “click-to-call" services and the consumer protection measures referred to above, the Federal Government has suggested that the practices of Australian licensed operators to restrict certain types of betting activity should be reviewed. The Final Report suggests that these practices are a factor in causing those customers affected to bet offshore.

Conclusion

Many of the recommendations made in the Final Report are a restatement of the findings in the DBCDE Report. Once again, the Government's response is not fully consistent with recommendations made in the relevant review and the longstanding prohibitionist policy of Australia in relation to the regulation of online gambling looks likely to be maintained for the time being.

However, if implemented, they are likely to result in greater efficacy to the Australian regulatory regime relating to online gambling, at least in respect of enforcement domestically. It remains a matter of some uncertainty whether these measures will be effective outside Australia.

In any event, it will be of interest to see if the Government (whether the current Government or the opposition, if elected), introduces legislation to amend the IGA to give effect to these recommendations. What is clear is that Australia is unlikely to see any reform of its online gambling regulatory regime for the foreseeable future.

Addisons’ Media and Gaming Team will continue to monitor any developments relating to the IGA.