When Australia was first colonised by people from the West, those people brought with them not only a broad social acceptance of gambling - many of them were from what is now called the UK - but an expectation of legalised gambling. In short order there arose a thriving industry in horse racing (and in betting on their outcomes), and Australia soon developed legislation governing a great number of gambling forms, including most of the classic table games of European casinos, and gradually incorporating more local forms of entertainment.
Australia is one of the most gambler-friendly nations on the planet. Some recent studies have projected that more than 80 percent of the population partake in some form of gambling, whether that be the National lottery, sports betting, or the full casino experience. The place gambling holds in the psyche of Australian Nation can perhaps best be illustrated by the curious law that exists that makes it legal for anyone to play two-up on ANZAC day, in deference to the game's tradition as entertainment for Australia's "diggers", who fought and lost their lives in two world wars.
The Australian position appears historically to have been the aggressive prohibition of unlicensed gambling, but also the ready provision of the necessary licenses, thus creating a booming casino and sports betting industry. This does result in a fair amount of the expected debate around whether the nation's attitude is moral or not, but in the interim Australians continue to enjoy their government's relaxed position on gambling, and the government continues to reap the tax benefits of this system.
You would imagine, then, that Australia would welcome the online casino market that emerged in the mid 1990s. You would be wrong.
The primary problem, from the Australian perspective, was that the Internet as a whole is rather difficult, if not impossible, to regulate. If most of the world's key online casino companies operated from outside Australia, then how could one easily extract taxes from them, particularly as they would most certainly be attracting customers who might otherwise visit local casinos.
Australia continued (and in fact still continues) to investigate methods by which the Internet may be effectively policed, and until a good solution could be found, they passed a moratorium on the operation of new online casinos. The Australian Interactive Gambling Act of 2001 brought an end to the aspirations of companies that were just beginning to jump on the Internet bandwagon.
Interestingly, the legislation does not criminalise the act of playing at an online casino or poker room - so ordinary Australian citizen can not be prosecuted under it. Rather, the law makes it a crime for an online casino to accept business from a player who is logging on from inside Australia. An interesting exception is sports betting - it is legal to wager on sports online in Australia, with only a few restrictions on in-play betting on events held inside Australia.
Further, the law forbids the opening of new Australian online casinos, but does not order the closure of online casinos that had managed to get up and running prior to the 2001 Act. This left Lasseters Online in the position of being the only legitimate online casino in Australia. However, the passing of the American UIGEA in the interim had a significant impact on the business of Lasseters Online, who under Australia's trade agreements with the USA was forced to bar US players. As a result, Lasseters announced their closure in 2008, citing the loss of business due to the UIGEA as a major contributing factor.
Online gambling remains in an odd legal position in Australia: on the one hand it is not illegal for a person to play poker or casino games online, but on the other hand it is specifically illegal for any enterprise to offer online gambling services to Australians, provided they are respectful of Australian law. The reality is that the vast majority of online casinos and poker rooms happily accept Australian players as they do not operate under Australian law, and are apparently unconcerned by threat of prosecution in Australia. At the time of writing, no operator has ever been prosecuted under these laws.