On 28 June 2018, Australian Federal Parliament passed the Interactive Gambling (Lottery Betting) Act 2018 (Cth) (Lottery Betting Act), prohibiting lottery betting in Australia.
This follows months of mounting uncertainty surrounding the future of lottery betting businesses in Australia1 and reflects growing community concern regarding the perceived adverse effects of secondary lottery products on State/Territory revenue, small businesses (especially newsagents) and the community through greater ability of gambling.
On 23 March 2018, the Lottery Betting Bill was introduced into the House of Representatives by the Honourable Mitch Fifield, Federal Minister for Communications.
The Lottery Betting Bill was introduced with the intention of responding to community concerns that lottery betting products, such as those provided by Lottoland:
- have an adverse impact on State/Territory taxation revenue and small business (newsagent) revenue derived from Australian lottery sales; and
- present a problem gambling risk to consumers.2
The Lottery Betting Act amends Australia’s federal gambling legislation, the Interactive Gambling Act 2001 (Cth) (the IGA)3, with the effect of prohibiting the provision of betting services on the outcome of both Australian and overseas lottery draws (including “keno-type” lotteries) to persons located in Australia. Lottery betting services are now classified as a “prohibited interactive gambling service” under the IGA, the provision of which will attract both a civil or criminal penalty and fines of up to $5.25 million (criminal offence) or $7.875 million (civil offence) per day.
The Lottery Betting Act was passed with the overwhelming support of Members of Parliament, with the exception of Independent Senator David Leyonhjelm, who labelled it a “shameful protectionist measure” during the second reading debate in the Senate.
After a brief debate in the House of Representatives and the Senate, the Lottery Betting Act was passed on 28 June 2018 and will take effect on 9 January 2019 (6 months after the date of Royal Assent), giving secondary lottery businesses in Australia time to adjust their business models to comply with the law.
The Lottery Betting Act was the subject of considerable debate between industry stakeholders and the general public. Unsurprisingly, Tatts Group and the Australian Lottery and Newsagents Association (ALNA) continued to be strong opponents of Lottoland4, lobbying actively the government in support of the Lottery Betting Act by highlighting the effects that the diversion of lottery customers to Lottoland will have on newsagent and State/Territory revenue.
Despite the high profile of the anti-Lottoland campaign, not all Australian newsagents shared the same view. Secondary lotteries found a supporter in Ian Booth, the CEO of the Newsagents Association of NSW and ACT Ltd, who was vocal in urging the government to abandon the Lottery Betting Act and cautioned that it would reinforce the monopoly enjoyed by Tatts which would be in the interest of neither the public nor newsagents.
Lottoland lobbied actively the government against the passage of the Lottery Betting Bill and appealed for public support by circulating an online petition on social media and Lottoland’s website that garnered over 16,000 signatories. Lottoland also offered a revenue sharing deal to newsagents, which it suggested would have seen newsagents receiving more revenue per sale than offered by Tatts to its newsagent members.
Despite the commencement of the Lottery Betting Act, we doubt that this will be the last that will be heard in Australia from Lottoland and other lottery betting operators.
Luke Brill, CEO of Lottoland, has assured customers that Lottoland is “here to stay”. We anticipate that it will only be a limited period until Lottoland’s further efforts to maintain its presence as an online gambling operator in Australia become known. Indeed, Lottoland’s 700,000 customers will be looking for the continuation of the services provided to date by Lottoland.
A High Court challenge is also on the cards, with Lottoland indicating that it is considering a challenge of the validity to the Lottery Betting Act. The success of this challenge remains to be seen, but we will continue to monitor the position.
If you would like to discuss how your business model may be affected by the Lottery Betting Act, please do not hesitate to contact any member of the Addisons Media and Gaming Team.