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Australia’s in-play ban: regulate or status quo?

| By iGB Editorial Team | Reading Time: 6 minutes
Australia's government is due to respond to the review it commissioned into in-play betting, whether it legalises or maintains the status quo will be key for licensed operators Down Under.

Gambling is so ingrained in Australia's cultural life that its ban on in-play betting online seems incongruous when viewed against other mature markets. The country's government is due to respond to the in-play review it commissioned last year, whether it legalises or maintains the status quo will be key for licensed operators Down Under.      

Joanne Christie 

There are few countries where gambling is so entrenched in social life as Australia. There are slot machines in almost every pub, people from all walks of life regularly visit casinos and there’s even a nationwide public holiday to mark the nation’s most revered horseracing event, the Melbourne Cup.

But the land nicknamed the Lucky Country has been anything but for online gambling operators. Under the Interactive Gambling Act (IGA), online casino games, bingo and poker are illegal in Australia, although sports betting and lotteries are allowed online.

Crucially, however, in-play bets are not permitted online and can only be taken at retail outlets or over the phone.

Of course this hasn’t stopped punters from the land Down Under having a go online – it has, however, meant that many of them have been doing so on illegal offshore sites, thanks to the IGA.

According to H2 Gambling Capital, just over half of the almost AU$2.9bn spent on online gambling by Australians last year went offshore to illegal sites.

Now, it finally seems the Australian Government is ready to talk seriously about doing something to stem that trend and last year commissioned a review by former politician Barry O’Farrell to look at illegal offshore gambling.

‘About time’ has been the reaction of many – the IGA was passed in 2001, long before smartphones and tablets turned the internet into something punters took around in their pockets and in-play betting took off.

The review was delivered on December 18 and its release, and the government’s response, are expected imminently. While few expect legislators to go the whole hog and open up the market to casino, poker or bingo online, major operators have been making a big push for legalising lucrative in-play betting.

The topic has been contentious of late as a number of large bookmakers such as William Hill and Ladbrokes have come up with workarounds that effectively allow them to offer in-play online, albeit using internet calls to satisfy the legalities.

The features work by asking users to ‘click to call’ — turning on the microphone of their smartphone and simulating a phone call — although no conversations actually take place.

In July last year, the Australian Communications and Media Authority (ACMA) said it did not believe these systems fell within the law and asked the Australian Federal Police (AFP) to investigate, although it declined to do so.

From review to action?
A previous review of the Act in 2013 by the Department of Broadband, Communications and the Digital Economy recommended that in-play betting be allowed online, but the recommendation was never adopted. So is there any reason to think that even if O’Farrell’s report makes a similar recommendation it will be endorsed?

According to Ian Fletcher, chief executive of the Australian Wagering Council – which represents the interests of Bet365, Betfair, Centrebet, Sportsbet, Tom Waterhouse, Unibet and William Hill — it’s tough to call.
“It is too soon to tell,” he says.

“There are optimists and there are pessimists. I am probably slightly in the optimists’ camp. My view is that they wouldn’t have done this if they weren’t prepared to legislate. If they are prepared to legislate they are prepared to open up the Interactive Gambling Act. If they are prepared to open up the Interactive Gaming Act in line with the reality of in- play wagering it is difficult to assume that they would go the other way.”

While the bookies have many large sporting bodies, such as the Coalition of Major Professional and Participation Sports, onside, there is also some powerful opposition, says Cormac Barry, chief executive at Sportsbet, which recently launched an online in-play feature that incorporates a telephone call.

“There is a very significant number of stakeholders who are against it so the power of Tabcorp, Tatts and the racing industry are all lined up on top of the sports groups, which are strongly in favour.”

Much of the opposition is “naked self-interest”, according to Fletcher. Indeed, in its submission to the review Tabcorp said: “Expanding online live betting into sport by amending the IGA would harm the racing industry, local hotels and community clubs. Early estimates suggest lost revenue of up to AU$10m per annum for the racing industry and licensed venues. This figure does not take into account further consequential migration to other online products, exacerbating the revenue leakage.”

There’s also another strain of opposition, however, and that’s from those who oppose any opening up of the gambling market on moral grounds, arguing that Australian has a large enough gambling problem as it is.

And they do have a point — time after time studies reveal that Australians lose more money per head per year than those from any other country.

Independent senator Nick Xenophon is one of the most outspoken anti-gambling campaigners, and in December he described the push to allow in-play betting as “a naked grab for cash by some of our biggest and richest sports. This greedy move is all about boosting the bottom lines of the professional sports bodies and the sports betting companies with which they have licensing agreements”.

He added that “the unacceptable consequence of this move would be more gambling addiction in Australia”.

Opponents such as Xenophon argue that rather than legalise more gambling online, the government should make a greater attempt to tackle the huge offshore industry. However with the lack of interest shown by the AFP in investigating ACMA’s complaint, this seems unlikely.

“There are a lot of people who think the solution to offshore wagering is some kind of IP blocking or payment blocking, or some other form of effective censorship. Given the millions of people who are involved in Australia and the fact it is only wagering, it is not a serious crime, that actually is fanciful and betrays a naive view of how the internet actually operates in the retail environment,” says Fletcher.

Simon Holliday of H2 Gambling Capital has a similar view. “If you try and live in denial and shut down offshore, because of the large amounts of money involved you tend just to encourage less reputable people into the sector. People out there that really want to gamble online will find a way and these people often need the most protection but end up with the operators you most want to keep out.”

Regulate or maintain the status quo 
The bookies argue that they’ll put more money into responsible gaming programmes and there’ll be more protection for punters if more of the activity is allowed to take place onshore.

And of course there’s also a strong political case for bringing more of the money Australians gamble onshore, and therefore into the realm of companies that pay Australian taxes. Plus, with Australia’s economy having been heavily reliant on mining and commodities and many speculating that the party’s over in this respect, any industry that has the potential to create jobs is sure to pique the interest of some in government.

In fact, with the popularity of in-play betting online in more developed online gambling markets continuing to grow, it could be argued that not allowing it would be tantamount to driving more people offshore.

“There is a higher than you would expect portion of in-play betting taking place offshore because onshore there are only a few companies that offer it via voice over telephone. It’s smaller than you would expect as the voice element is less convenient,” says Holliday.

Without being able to offer the gaming products such as casino or poker that are regularly used to cross-sell in-play betting and vice versa, the big bookies are at a big disadvantage in Australia. But that doesn’t mean they won’t be quick off the mark if and when the market opens up, says Cormac Barry.

“If in-play was legalised we could turn around new offerings very quickly. We are part of the Paddy Power Group so we have global scale. Some of the 250 IT staff we have in Australia are undertaking development that will be used both locally and globally and we have expertise from other countries that can be brought in.”

With many having overseas roots, Australia’s sports betting operators are likely to spring into action fast if things go their way when the report and response are released, but there’s a question mark over how they will respond if they don’t get the green light they are hoping for. If the news isn’t good, some may question whether the Australian Dream is still worth pursuing. 

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