Australian government targets online gambling with IGA amendments

Last Thursday the Australian government introduced the Interactive Gambling Amendment Bill 2016 into parliament, in the latest attempt to combat unlicensed offshore online gambling. The bill is the result of a review of the industry conducted by disgraced former NSW premier, Barry O'Farrell.

Among the various recommendations made by the review and adopted by the proposed bill, these were the most significant:

• The Introduction of civil penalties against offshore operators and Australian affiliates that continue to accept and/or advertise specifically to Australian punters;
• Legislation to eliminate the so-called "click to call" process being used by licensed Australian bookmakers to work around restrictions on online in-play betting;
• The prohibition of lines of credit being offered to punters;
• Empowering the Australian Communications and Media Authority (ACMA) to share information with offshore regulators about prohibited gambling sites;
• Enabling ACMA to notify the Department of Immigration and Border Protection with the names of known offshore operators' directors or principles so that they may be added to the Australian "Movement Alert List" and flagged if attempting transit through an Australian airport;
• The establishment of a public register or list of approved and licensed online gambling sites;

The changes to the "click-to-play" process at licensed sports betting sites should come as no surprise given the government and consumer groups' vocal opposition to the practice. The workaround allowed licensed bookmakers to exploit the narrow wording of the law to offer punters a service where they could enter the details of their bet online, then click a button in order to basically respond "yes" to an IVR recorded phone call in order to confirm their bets. Licensed operators have already phased out this practice after a directive from the government, putting them at a disadvantage to unlicensed offshore operators who do not operate under the same restrictions.

It was decided that establishing a public register of licensed websites would be an easier and more useful endeavour than attempting the Sisyphean task of documenting and listing every unlicensed website in the world that continues to accept Australian punters.

Unsurprisingly, much of the impetus towards the amendment and enforcement of the Interactive Gambling Act has been driven by Australian stakeholders that feel threatened by the globalisation of online gambling. Tabcorp, Sportsbet, Clubs Australia, Crownbet, the Australian Hotels Association, and Racing Australia all made submissions to O'Farrell's report detailing the threat overseas competition presents to their profits along with a call for stronger enforcement of the existing Act.

Australian affiliates in the firing line

Operators are not the only target of this bill, as it appears that the government is aware of the existence of Australian based affiliates that currently advertise unlicensed offshore sites specifically to Australian punters. The existing Interactive Gambling Act 2001 is clear that advertisements to Australian punters made by websites visited by a majority of Australian based visitors are already illegal (see s. 61EA part 3). However this has not stopped the proliferation of Australian-centric affiliate sites, many of which are run on .com.au domains, that pass under the radar due to the lack of enforcement of the exisiting laws. The following text from the explanatory notes of the proposed new bill makes it clear that the government would like ACMA to investigate and penalise both operators and affiliates that continue to advertise to Australians in such circumstances.

Extend the ambit of enforcement to affiliates and agents

Stakeholders informed the Review that there is a network of Australian based agents and affiliates engaged by illegal offshore operators to recruit new customers in return for a commission paid by the operator relative to the customer's wagering activity. Some of these operators have call centres or offices located in Australia that recruit new customers and service existing customers.

The Government agreed with the Review recommendation to 'extend the ambit of enforcement to agents, affiliates and the like'. Enforcement action would be able to be taken against agents, affiliates, associates and employees who receive a direct payment, salary or commission for promoting, recruiting or supporting customers to bet with these illegal offshore gambling sites. Disrupting the chain of support is likely to affect the number of Australians who use these services.

Australian affiliates and operators running Australian based support services have clearly been warned.

As yet there has been no indication whether Labor, the Greens, or other minority party senators will support the bill. With the government only holding 30 of the 76 senate seats, it will need support for the bill to pass.