Australians Love To Gamble But Their Government Says No To Online Casinos

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It’s no secret that Australians love to gamble. The nation was named the “world’s biggest gamblers” by a writer at The Economist last year. According to a report by H2 Gambling Capital, it’s estimated that the average Aussie adult lost $990 in the year 2016.

What’s most curious about these statistics is that many forms of gambling are illegal on the planet’s largest island nation state. Clearly, all sites should be regulated as that’s what the people want. However, that’s not the case. Legislation has explicitly targeted online casinos and bookmakers for many years. Whilst many Aussie players and international bookmakers alike have flouted legislation, the latest wave of attacks from lawmakers against the pastime might be harder to ignore.

The Background

The first legislation governing online casinos was the Interactive Gambling Act 2001. It set out to make online gambling illegal. However, because it targeted the operators of online services rather than the punters, its efficacy was limited. Australian customers are still able to gamble online at bookmakers who are willing to break the rules. With the market for gambling as large as it is in Australia, there are no shortage of those. These casinos are based outside of the country and are therefore much harder to police for the Australian authorities.

The Situation Today

The situation remained the same for many years and several large international gambling providers had little reservation about offering customers various illicit games. However, following the 2016 Federal Election, a change in the composition of government saw Alan Tudge appointed to the position of Minister of Human Services. He immediately set about modernising the gaming industry.

Legislation was introduced that year governing online sports books and following this, an amendment was penned to the 2001 Act on interactive gambling. They were both voted into law in 2017. Under the act targeting sports books, lines of credit or “free bets” were banned and various customer safety measures (pre-commitment schemes and self-exclusion registers) were added. Meanwhile, the Interactive Gambling Amendment Act 2017 came down hard on online gambling providers. It detailed a blanket ban on all forms of iGaming. Barring a few exceptions (such as lotteries), this would include all real-money, chance-based activities on the internet. It went further than past legislation, stating that punters were expressly forbidden to place wagers on sporting events that were already happening. Previously, operators had been using a loophole to the 2001 Act to allow their customers live, in-play betting opportunities. They’d fill in a form online and request a call back. An automated call would then contact the punter and would read out the selection to them. They’d then have to confirm the bet over the phone. However, this too is now excluded at Australian sports books under the 2017 legislation.

The Fallout?

It looks like the efforts made by Australian lawmakers might be having the desired effect. Global betting behemoth William Hill are reported to be considering leaving the market. They announced recently that they were reviewing their presence in Australia because of changes in betting laws. A statement from the company read:

“Given the credit betting ban in Australia and the likely introduction of a point of consumption tax in a number of states, it is clear that profitability will increasingly come under pressure.”

Evidently, this was music to some legislators’ ears. Senator Xenophon responded:

“I don’t have a violin small enough for William Hill… The fact that they are thinking of moving out of Australia because of this very reasonable and well overdue ban on credit betting indicates how greedy and desperate they are.”

In addition, Western Australia, Queensland, and Victoria are considering following the example set by South Australia last year. They were the first region to introduce a 15% point of consumption tax for bets placed. This forces companies to pay tax on every dollar they receive from punters. If the aforementioned states follow suit, the impact on the bottom line of betting service providers will be more pronounced and additional companies might call it quits down under.

The Future

With the reforms set out in the Interactive Gambling Amendment Act only due to take effect on February 18, the full fallout won’t be known for some time. However, Tommy Wu, a researcher at IBISWorld is still optimistic about the online gambling industry in Australia. He told ABC:

“At the moment the Australian sports betting industry [is] actually quite profitable.”

In addition, there are reports of other global brands in sports betting and casino services preparing to step up if William Hill leave a suitable hole in the market. Bet365, Ladbrokes, Coral, and Paddy Power are amongst the names mentioned. Another development in the industry could also shake up the gambling landscape in Australia. A recently announced merger between Tabcorp and Tatts, two of the nation’s most well-known bookmakers, will also put pressure on the offshore operators offering their services to Aussie punters.

One thing remains certain, however. Australians still love to gamble. It seems likely that illicit services will continue to flout the current legislation as they have done for over 17 years now. Some may drop out of the market, strengthening the appeal and profitability of those that remain. Meanwhile, of the bookies operating legally in Australia, profits will certainly be impacted. This could cause some offshore bookmakers to call it quits. We’ll have to wait and see whether a similar squeeze takes place in the regulated market.