The Corrs Gaming & Wagering practice group provide an update on in-play betting in Australia following the release of the Federal Government’s views about future changes to online gambling regulation.
On 28 April 2016, the Federal Government announced that it will introduce legislation ‘as soon as possible’ to enforce the intent of the Interactive Gambling Act 2001 (Cth) (IGA). In particular, it identified that ‘click to call’ gambling products, which facilitate online in-play betting, are breaching provisions of the IGA.
The announcement accompanied the Federal Government’s response to the O’Farrell Review into the Impact of Illegal Offshore Wagering (Review) and the first public release of the Review itself. The Review, conducted by the Honourable Barry O’Farrell, was commissioned in September 2015 with the aim of addressing the economic impact of illegal offshore wagering on the racing and sports industries. The Review also examined possible consumer protections, including regulatory measures to mitigate the detrimental social impact of problem gambling.
The Review produced 19 recommendations, of which the Federal Government has accepted 18 either in full or in principle. However, it is the comments made in relation to currently available in-play betting products that has garnered the most media attention and will impact to some of the large operators in the gambling industry.
WHAT IS IN-PLAY BETTING?
In-play betting is betting after an event has commenced, often known as ‘betting in the run’ or ‘live betting’. There are various types of bets within in-play betting, such as wagering on the final result of an event or placing a bet on a specific outcome within a game, for example if the next serve in tennis will be an ace. This latter category is commonly referred to as spot betting or micro-betting. The IGA does not differentiate in its treatment of the different types of in-play betting.
HOW IN-PLAY BETTING CURRENTLY OPERATES IN AUSTRALIA
When the IGA was introduced back in 2011 politicians were concerned that interactive technology, including through the internet and datacasting, had the potential to increase gambling accessibility and problem gambling. Its approach was to impose restrictions on online gambling. Under the IGA, the only method of placing a bet once a sporting event has started is through the telephone or in person (except in the case of racing events where online in-play betting is legal).
Attempting to work within the provisions of the current IGA, in April 2015, William Hill was one of the first to utilise Voice-over Internet Protocol (VoIP) to allow customers to place bets online once a sporting event had commenced. By directing the customer to allow website access to the microphone on their computer it is possible for a bet to be placed using platforms similar to Skype technology. Shortly after, William Hill launched the same capability on smart-phones. This ‘click to call’ technology accordingly allows betting agencies to argue that bets are placed using a telephone service, not online, and therefore are compliant with the IGA. Other betting agencies including Ladbrokes and bet365 subsequently launched similar products.
END OF THE WINNING STREAK
Providers of ‘click to call’ betting services are accustomed to scrutiny of the legality of their products. In July 2015, prompted by complaints, the Australian Communications and Media Authority (ACMA) announced that it would review in-play betting. The ACMA, an independent statutory authority responsible for the regulation of broadcasting, radiocommunications, telecommunications and online content, referred the matter to the Australian Federal Police (AFP) for further investigation and enforcement. In October 2015, the AFP released a statement that it had declined to accept the referrals for investigation. Ladbrokes, who had previously withdrawn its ‘click to call’ feature, relaunched its in-play betting product.
William Hill have been a consistent defender of its ‘click to call’ service, stating that it was ‘100 per cent legal’ and operating within the IGA. However, with the impending introduction of amendments to the legislation, it appears that this justification may have reached its expiry date.
Although changes to the IGA have not yet been passed, Human Services Minister Alan Tudge last week stated that he hopes providers of ‘click to call’ services would voluntarily cease their operations immediately, given that the product was not aligned with the intent of the IGA.
The Review noted that no stakeholders who made submissions were in favour of micro-betting being legalised, however some stakeholders called for a platform neutral approach in order to apply the same restrictions across telephone, in person as well as online in-play betting. In its response to the recommendations, the Federal Government has declined to remove the inconsistency between the different methods of placing in-play bets, but instead will seek to legislate against the ‘click to call’ approach that operators currently utilise. The Federal Government aims to bring market practice into alignment with the original objectives of the IGA, which were developed before extensive adoption of VoIP technology and widespread use of internet-capable smart-phones.
Influential independent senator Nick Xenophon has stated that the proposed changes to in-play betting are insufficient.
FURTHER DIRECTIONS FROM THE REVIEW
In addition to the move to legislate against ‘click to call’ betting, the Federal Government announced the following actions in addressing gambling issues in Australia:
- Commence work with the states to establish a framework of minimum standards that will be rolled out as a national consumer protection framework. This may include a range of policies and programs to offer assistance with problem gambling.
- Amend the IGA to clarify the prohibition of offering gambling services to Australians by offshore providers, unless they have an Australian state or territory licence. The ACMA will receive the power to implement civil penalties for breaches of the IGA and additional powers to notify regulators.
- Review the possible use of disruptive methods to combat illegal offshore gambling activity. This may include releasing information about the providers of illegal sites to prevent their travel into Australia, holds on operators receiving licences to operate in Australia, and potentially disrupting access to illegal wagering providers and blocking payment methods.
The Federal Government’s response clearly recognises that prohibiting onshore, licensed and regulated betting agencies from providing in-play online betting will not solve the more difficult problem presented by unregulated offshore provided. We will report on the potential steps taken to address offshore operators in the coming weeks.