Market Focus: Australia

As a federalised democracy, Australia consists of a national government made up of six states and two territorial governments, namely Tasmania and the Australian capital territory. The regulation of gambling mainly falls under the mandate of regional governments because gambling-related activities are regulated and licensed under state authorities.

Each individual state has its own independent non-ministerial regulatory entity, which is typically constituted under state law and is subject to governmental statutes. The independence of these entities is an essential cog in promoting the integrity of supervision and the non-biased nature of enforcement.

However, at the federal government level, there are three main regulatory entities whose purview extends into the gambling industry. The most active of these in gambling-related circles is the Australian Communications and Media Authority (ACMA), which is given an enforcement role over the interactive gambling industry (online and telephone), allowing it to draft rules and standards which all online operators in Australia are subject to.

In addition to the ACMA, the Australian Transaction Reports and Analysis Centre has oversight of anti-money laundering in the gambling sector, while the Australian Federal Police can use its investigatory and criminal law powers in the areas of financial crime and anti-money laundering legislation.

The principal piece of legislation governing egaming in Australia is the Interactive Gambling Act (IGA) of 2001. Many online gambling services, including online casino and poker, are banned under the Act, as well as in-play betting. There may also be regional laws which make online gambling economically unviable.

Population: 24.77m

GDP per capita: $44,648

Internet penetration: 88%

Prime minister: Scott Morrison

Principal regulatory body: Australian Communications and Media Authority and individual states [/box]

The right code

The IGA also provides the ACMA with powers to draft codes of practice governing the conduct of operators, together with investigatory and enforcement powers over the egaming industry. It also states that the ACMA is obligated to notify ISPs of any prohibited egaming sites so that the providers can block access to Australian punters. However, for Jamie Nettleton, partner at Addisons Lawyers, the ACMA’s most important objective is to “disrupt illegal offshore gambling and to prevent those operators from continuing to provide gambling services into Australia”.

Among the rules included in the IGA are measures stating that unlicensed or prohibited interactive gambling services cannot be advertised or provided to customers in Australia, and likewise Australian firms which have been prohibited are barred from providing gambling services. Use of credit cards as payment methods in sports betting is also banned.

Regulated gambling services include telephone betting, any gaming service otherwise defined as exempt and lottery services. Prohibited interactive gambling services include online casino-style games, online slot machines and online services that accept in-play bets on sports events. However, ministers may determine individual gambling services exempt from the IGA on a case-by-case basis, so this makes the definitions far from definitive.

Under the IGA, unauthorised gambling providers can be prosecuted in Australia if it is found that they are offering their services to Australian citizens. However, the bulk of these unauthorised providers are often offshore sites and thus not subject to Australian law, making the ACMA’s enforcement actions difficult.

For the most part, Australia’s banks and internet service providers generally do not allow payments to/from interactive gambling services and access to these websites, however punters are still able to access these sites using services such as VPNs. Reforms to the IGA, first tabled in 2017, make it clear that it is illegal for gambling companies to provide certain gambling services to Australians unless the person or company holds a licence under the law of an Australian state or territory.

The reforms also provide the ACMA with more regulatory teeth, including the use of fines, more tools to disrupt egaming and cross-agency cooperation to prosecute company directors of offshore gambling companies targeting the Australian market illegally.

The principal aim of these amendments was to force offshore operators to come onshore and, by default, become licensed. However, for Nettleton, there are three key reasons why this has not occurred. Namely, the restrictions on the types of interactive gambling services which can be provided, an increase in the regulatory barriers in front of operators seeking to be licensed, and inconsistencies in regulations across the various states.

All of which have contributed to a lack of growth in the market and a lack of operators, as Nettleton explains: “From our perspective, various overseas operators who had initially considered entry into the Australian market have reviewed their position when they became aware of the costs and other regulatory hurdles involved and the relative commercial advantages available in other jurisdictions, for example the USA.”

Despite these issues, the ACMA is already claiming success in a recent report, stating that it had successfully forced 66 of the most popular offshore betting sites out of the Australian market entirely. In addition, the ACMA has established an interactive gambling taskforce which aims to use education, engagement and enforcement action to deter unlicensed offshore gambling services. It has also pledged to step up its enforcement activities over the coming year.

Protection apparatus

Over the past two years, there have been discussions to implement a national consumer protection framework (NCPF), which would harmonise all regulations for operators under one framework. However, to date this has still not been formally announced. Several new codes of practice in the areas of advertising have been introduced over the past year by the ACMA; the first of these was in March when the so-called ‘safe zone’ on TV and radio advertising was introduced. The safe zone exists between 5.00am and 8.30pm, during which time several restrictions are applied to gambling businesses.

In addition, there is a prohibition on advertising five minutes before, during and five minutes after a sporting event has finished. Commentators are also not permitted to promote odds during a 30-minute window prior to the start of an event and 30 minutes after. The practice of in-play betting is also banned. In August, these laws were extended to apply to live streaming, esports and all digital media broadcasts.

So what impact do these regulations have on operators? One of the key by-products of these regulations is to make it harder for licensed operators to provide attractively priced products to Australian citizens, as Nettleton explains: “We are aware of various punters, particularly professional punters, taking advantage of the more favourably priced betting products available from offshore operators.”

As a result, Australia will continue to be an attractive market for those overseas gambling operators prepared to disregard Australian laws, as well as regulatory and compliance standards. A few of the bigger international operators are still making inroads into the licensed Australian market, mainly via the acquisition of local firms, but the numbers of new operators seeking licenses remains small.

So, what does the future hold? Regardless of the continuing presence of offshore operators, the best avenue for Australian market growth is harmonisation, simply because it will make it easier for international firms to understand and exploit the Australian market. As the number of licensed operators increases, the effect on Australia’s economic system also grows. The federal government will then inevitably have to make the local market more attractive to cater for these increased numbers. Only then will a gambling gold rush in Oz truly take hold.