A general introduction to gambling law in Australia

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Introduction

Although it is difficult to provide an all-encompassing legal definition of gambling in Australia, generally speaking gambling is defined as an activity that 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 apply to trade promotions (often referred to in other jurisdictions as sweepstakes), being 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, eligible prize types and others, some Australian states and territories require the promoter to first obtain a permit from the relevant regulator.

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:

1. lotteries (both in venue and online);
2. wagering and sports betting (both in venue and online);
3. electronic gaming machines (EGMs), slot machines, or pokies (just in venues); and
4. 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 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.

Historically, lottery and totalisator operators in Australia were government-owned entities. Almost all states and territories (Western Australia being the exception in respect of its totalisator and lottery) have since privatised these gambling operators.

Totalisator sales and retail (i.e., terrestrial other than on-course bookmaking) operations of the respective licence holders are conducted exclusively pursuant to a range of state and territory legislative and contractual arrangements.

The primary lottery licences on issue are largely held exclusively with exceptions in each state and territory relating to charitable lotteries and trade promotion lotteries.

Land-based casino licences are held exclusively in some states and territories with multiple licences issues in some jurisdictions (e.g., New South Wales (NSW), Queensland and the Northern Territory). The provision of online casino-type products to Australians is illegal under the Interactive Gambling Act 2001 (Cth).

Gaming machines are operated in land-based casinos and in licensed clubs and hotels in all states and territories (other than in Western Australia where EGMs are only operated at Perth Casino).

All leading gambling businesses in Australia (many of whom are listed in Australia or overseas) conduct business under a licence granted by a state or territory government (or regulator). The principal licensed gambling operators are:

1. Tabcorp Holdings Limited (Tabcorp), which holds licences to conduct totalisators (and off-course betting) through retail outlets in Queensland, Tasmania, NSW, Victoria, South Australia, the Australian Capital Territory and the Northern Territory, with various exclusivity arrangements in place.
2. The Lottery Corporation Limited (The Lottery Corporation), which holds licences to conduct lotteries through retail outlets and online in Queensland, Tasmania, NSW, Victoria, South Australia, the Australian Capital Territory and the Northern Territory, with various exclusivity arrangements in place.
3. The Star Entertainment Group Limited (The Star), which operates casinos in Sydney and Queensland.
4. Crown Resorts Limited (Crown Resorts), which operates casinos in Melbourne, Sydney and Perth, also conducts a betting exchange, Betfair Australia (licensed in the Northern Territory).
5. Sportsbet Pty Limited (Sportsbet), a sports bookmaker licensed in the Northern Territory that is owned by Flutter Entertainment plc.
6. Entain Group Pty Ltd, trading as Ladbrokes and Neds.com.au under Northern Territory sports bookmaking licences, which is part of the global Entain plc group; and
7. Aristocrat Leisure Limited, Ainsworth Game Technology, Scientific Games Australia, Konami Australia, International Game Technology and Aruze Australia (all suppliers of gaming machines).

In Western Australia, the totalisator and lottery are conducted through state-owned corporations, respectively operated by Racing and Wagering Western Australia and LotteryWest. While there have been recent discussions about the privatisation of the Western Australian TAB, it remains under government control. Separate exclusive licences are also issued in each state and territory in respect of the conduct of keno games in land-based retail venues and, in some cases, online.

As mentioned in Section I.iii, licences to conduct gambling are issued by the relevant state or territory government (or regulator) including those listed in Section I.ii. Traditionally, gambling was conducted solely in venues but, with the introduction of new technologies, is now widely conducted online and over the telephone (other than online casino-type products, which remain illegal).

It is generally understood under principles of Australian constitutional law and expressly provided for in some state and territory legislative regimes that certain gambling services provided under a licence issued in any state or territory of Australia can be promoted and provided to residents of other Australian states and territories. This principle was confirmed by the decision of the High Court of Australia in Betfair Pty Ltd and another v. Western Australia.² Each licensing jurisdiction imposes different licence conditions on its licensed operators, by reference to the relevant legislation. Most online corporate bookmakers, for example, are licensed in the Northern Territory by the Northern Territory Racing Commission (NTRC). There have recently been some moves as part of the development of the Australian Sports Wagering Scheme (ASWS) to evaluate the potential harmonisation of regulation insofar as it relates to sports integrity. The ASWS remains under development.

The principal federal legislation governing the supply of gambling products and services is the Interactive Gambling Act 2001 (Cth) and the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth).

In 2001, the federal government enacted the Interactive Gambling Act 2001 (Cth) (IGA), which prohibits the provision of interactive (or online) gambling services with an 'Australian customer link'. The IGA is enforced by the Australian Communications and Media Authority (ACMA) and the Australian Federal Police. The ACMA is active in investigating complaints of breaches of the Act and report each quarter on their enforcement activities, including in implementing website blocking of websites found to be in breach of the IGA.

In September 2017, the IGA was amended by the Interactive Gambling Amendment Act 2017 (Cth) in response to claims that the existing legislation was ineffective as a means of deterring unlicensed offshore gambling operators from providing services to Australian residents. The amendments, among other things, increased penalties, expanded existing aiding and abetting offences, clarified the prohibition on the use of VoIP technology by licensed wagering operators to facilitate in-play betting services, banned the provision of lines of credit by wagering operators and granted the ACMA greater investigative and enforcement powers, including the power to issue formal warnings and infringement notices. Broadly speaking, the IGA prohibits the provision of prohibited interactive gambling services (the Section 15 Offence) and regulated interactive gambling services without an Australian licence (the Section 15AA Offence) to persons present in Australia. Regulated interactive gambling services include wagering services (except for online in-play sports betting services and betting on the outcome of lotteries, which are prohibited) and lottery services (except for online instant or scratch lotteries, which are also prohibited). In addition, the IGA prohibits the advertising in Australia of prohibited interactive gambling services and, unless the relevant party is licensed in Australia, regulated interactive gambling services.

The IGA targets the supply of online gambling to residents of Australia by offshore operators but does not prohibit Australian residents from accessing those offshore services, or the provision of services by Australian operators to customers in other countries. A defence is available for an alleged breach of the IGA where the operator did not know, or could not reasonably have known, that its service had an Australian customer link, that is, that any or all the customers of the service were physically present in Australia.