Overview

  • Online wagering is permitted, except for online in-play betting on sports.
  • Online wagering is regulated at each of the Federal and the State/Territory levels of government.
  • Wagering operators must comply with the gambling laws of each State/Territory. These laws contain restrictions on various aspects of the gambling business conducted by the wagering operator. These include restrictions which apply to advertising, the provision of services to minors and other harm minimisation practices.
  • All leading Australian licensed wagering operators have entered into product fee and integrity agreements with the major Australian racing and sporting bodies. Under these agreements, they are required to pay a product fee to the relevant body and comply with integrity related and other obligations.
  • Advertising restrictions are also imposed by the Australian Consumer Law.

The Legal Framework

The Interactive Gambling Act 2001 (Cth) (the IGA) regulates online gambling at the Federal level and prohibits the supply of interactive gambling services to persons present in Australia. Although wagering services, such as sports betting, are exempt from the definition of an interactive gambling service, online in-play betting on sports events is excluded expressly from this exemption. In other words, the IGA permits the conduct of online wagering to the extent that it does not include online in-play betting on sports events.

Operators providing sports betting products to Australian customers must comply with both the IGA and applicable State/Territory laws.

Each State/Territory has its own gambling legislation which, in general terms, applies to any gambling operator that seeks to provide and/or promote services to residents of that jurisdiction. Under the gambling laws of each State/Territory, it is an offence to provide a wagering service (such as the offering or acceptance of a bet) to a person without a wagering licence.

Under Australian constitutional law, to the extent that a gambling service is provided legally under a licence granted by another Australian State/Territory, it will be recognised as a legal service under the laws of each other State/Territory. This does not mean that certain prohibitions in the laws of another State and Territory do not apply:  they must be applied in a non-discriminatory manner.1

Where can I get a Wagering Licence?

Each State/Territory has its own licensing framework under which wagering operators can obtain a licence. However, the framework of most States/Territories contemplate only the grant of licences to that jurisdiction’s totalisator (in most cases a monopoly licence) and on-course bookmakers.

However, the Northern Territory contemplates the licensing of online “sports bookmakers”. Operators such as bet365, Sportsbet, Sportingbet, Tom Waterhouse and Unibet are all licensed by the Northern Territory Racing Commission (NTRC).

Norfolk Island, a self-governing territory of the Commonwealth of Australia, also has a licensing regime under which licences have been granted to online wagering operators. Ladbrokes is the best known online wagering operator licensed by the Norfolk Island Gaming Authority (NIGA).

The Tasmanian licensing framework also contemplates specifically the licensing of betting exchanges. Betfair Australia was granted a Tasmanian licence in 2005.

Product Fees

State/Territory gambling laws also contain provisions relating to product fees. That is, in all States/Territories (except Northern Territory and Norfolk Island), it is an offence to use “race fields information” (generally information relating to racing events held in that jurisdiction) without having an approval granted by the relevant racing controlling body in that State/Territory.

For example, if a wagering operator wishes to take bets on the Melbourne Cup, they must have an approval from Racing Victoria. Under the conditions of this approval, the wagering operator must pay a product fee to Racing Victoria (being a percentage of the wagering operator’s turnover on races supervised by Racing Victoria) and meet certain integrity obligations (see below).

Under Victorian law, an operator must not take bets on a sporting event in Victoria unless they have a product fee and integrity agreement in place with the relevant sports controlling body. In 2014, similar legislation was introduced into NSW; however, at the time of writing, this legislation had not yet commenced.

In general terms, all Australian licensed betting operators have agreements with the major Australian sporting bodies. Under these agreements, each wagering operator is required to pay a product fee to the relevant sporting body, which, unlike the product fee levied by most racing bodies, is based on “gross revenue” (turnover minus winnings paid to customers).

Integrity

Under each agreement relating to the use of race fields or sporting information, wagering operators are required to comply with numerous obligations relating to integrity.2  For example, they must report suspicious transactions to the relevant racing/sports controlling body and provide that body with information relating to customers and transactions upon request.

Advertising

Wagering operators must comply with restrictions that originate from a number of different sources in respect of the advertising of their services. These sources include:

  • gambling legislation of each State/Territory (including the conditions of a race fields approval);
  • advertising codes that apply to a particular medium, for example, the Free TV Code;
  • Association of Australian National Advertisers (AANA) Code which applies to all advertising; and
  • the Australian Consumer Law.

What’s Next for Online Wagering in Australia?

Regulatory Creep

Wagering operators conducting business in Australia are subject to considerable regulatory overlap. Numerous statutory bodies have jurisdiction over wagering operators, including:

  • the operator’s licensing body;
  • racing and sports controlling bodies;
  • the gambling regulator of each State/Territory; and
  • non-gambling specific bodies, for example, the Australian Competition and Consumer Commission (ACCC).

In many cases, two or more regulators/authorities impose requirements relating to the same issue, for example, responsible gambling measures or advertising restrictions.

In 2014, we have seen the following:

  1. Racing NSW introduced a new condition to its approval conditions, requiring approval holders to accept certain minimum bets; and
  2. the South Australian gambling regulator introduced further restrictions concerning the advertising of gambling products and brands as well as responsible gambling practices.

These requirements are in addition to requirements that exist under the licence granted by the licensing body (for example, the NTRC) or under the general law (for example, the Australian Consumer Law).

In-play

On 30 October 2014, the then Australian Federal Minister for Social Services, Kevin Andrews, and the then Premier of Victoria, Denis Napthine, who at the time was also the Minister for Racing in Victoria, announced that a new national working group would be set up to address the “increasing impact of illegal offshore wagering on Australian racing and sports”.3

It remains to be seen whether this working group4 will consider any possible amendment to the IGA to allow the provision of online in-play betting on sport events.

Given that, in 2015, Australia will host both the Cricket World Cup and the Asian Cup, these events are likely to intensify calls from the industry that the liberalisation of in-play laws will encourage Australian punters to bet with Australian wagering operators who, unlike offshore operators, are subject to the integrity related requirements referred to above. These calls will only be strengthened by any recommendation by the working group for measures to be taken to limit the access of Australian residents to offshore operators.