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Introduction and conduct of the inquiry
Background to reference
This inquiry was initially referred to the Senate Standing Committee on
Community Affairs on 24 June 2010 by Senator Nick Xenophon. On 26 August 2010,
the committee reported:
On 19 July 2010, the Governor-General prorogued the 42nd
Parliament and dissolved the House of Representatives. After due consideration,
the committee has determined that it is unable to provide a comprehensive
report at this time. The committee will reconsider the issues of this inquiry
in the event that it is re-referred to the committee in the new parliament.
On 30 September 2010, the reference was revised and re-referred to the
Senate Community Affairs References Committee.
On 28 October 2010, Senator Xenophon by leave moved that:
(a) the inquiry into the prevalence of interactive and online gambling in
Australia be withdrawn from the Community Affairs References Committee and be
referred to the Joint Select Committee on Gambling Reform in line with the
terms of reference of the committee; and
(b) in conducting its inquiry, the Joint Select Committee on Gambling Reform
have the power to consider and use the records of the Community Affairs
References Committees appointed in this Parliament and in the previous Parliament
relating to the inquiry.
Terms of Reference
The terms of reference directed the committee to inquire and report
The prevalence of interactive and online gambling in
Australia and the adequacy of the Interactive Gambling Act 2001 to
effectively deal with its social and economic impacts, with particular
recent growth in interactive sports betting and the changes in online wagering
due to new technologies;
development of new technologies, including mobile phones, smart phones and
interactive television, that increase the risk and incidence of problem gambling;
relative regulatory frameworks of online and non-online gambling;
(d) inducements to bet on sporting events online;
risk of match-fixing in sports as a result of the types of bets available
online, and whether certain types of bets should be prohibited, such as
spot-betting in sports which may expose sports to corruption;
impact of betting exchanges, including the ability to bet on losing outcomes;
implications of betting on political events, particularly election outcomes;
regulation, including codes of disclosure, for persons betting on events over
which they have some participation or special knowledge, including match-fixing
of sporting events; and
(i) any other related matters.
Under (i) the committee also agreed to inquire into gambling
Conduct of the inquiry
Information about the inquiry was advertised in The Australian
newspaper and on the committee's website. The committee wrote to relevant
people and organisations to notify them of the inquiry and invite submissions
by 30 June 2011. The committee received 62 submissions. A list of the
submissions authorised for publication by the committee is provided at Appendix
Referral of a related bill
On 20 June 2011, pursuant to the resolution of appointment of the Joint
Select Committee on Gambling Reform, the Interactive Gambling and Broadcasting
Amendment (Online Transactions and Other Measures) Bill 2011 was introduced in
the Senate and referred to the committee for inquiry and report.
Information about this inquiry was also advertised in The Australian
and on the committee's website. The committee wrote to relevant people and
organisations to notify them of the inquiry and to invite submissions by 15
July 2011. The committee received 16 submissions. A list of the submissions
authorised for publication by the committee is provided at Appendix 2.
As the bill is related to the reference, the committee decided to
consider the reference and bill together at hearings and cover both inquiries in
the final report.
The committee held public hearings in Melbourne on 11 August,
Canberra on 19 August and Canberra on 16 September 2011. A list of
witnesses who appeared at the public hearings is at Appendix 3. Hansards from
the hearings are available at: http://www.aph.gov.au/hansard/.
A further hearing was held on 11 October 2011 to hear from Dr Samantha
Thomas and Associate Professor Colin McLeod. The hearing was conducted
in-camera as the research findings had not yet been made public. The committee will
release the transcript once this has occurred.
The committee also conducted a site visit to Sportsbet in order to
inform committee members about the operations of online sports bookmakers.
The committee thanks those organisations and individuals who made
submissions and gave evidence at hearings. The committee also thanks Sportsbet
for hosting the committee site visit on 11 August 2011.
The terms online and interactive gambling are used by many
interchangeably. Interactive gambling is an overarching term which can be used
to refer to the collective group of communications mediums—the internet, phone
and digital television—through which gambling may occur. The terminology can be
confusing as the term interactive gambling can be used in this broad sense or
as defined in the Interactive Gambling Act 2001 (IGA) which covers some
forms of interactive gambling but excludes others.
Under the IGA, Australian-based interactive gambling services are
prohibited from being offered to individuals located in Australia. However, the
IGA also provides exclusions where certain services are legally allowed to be
provided in Australia. These services which are excluded, or allowed, are not
defined as interactive gambling services under the IGA. They are internet
wagering, phone wagering and digital television wagering. These excluded
services could be considered interactive in the broader sense of the term. The
below attempts to represent the framework for defining interactive gambling
(and the exemptions) under the IGA:
The Productivity Commission used online gambling as the overarching term
in its 2010 report and used the following figure
to illustrate the types of online gambling:
The Department of Broadband, Communications and the Digital Economy
adapted the Productivity Commission diagram above to clarify what is and what is
not prohibited under the IGA.
Online gambling refers to gambling that uses online or internet-based
services. Two forms of online gambling are usually discussed, although there
The first, online wagering, is where gamblers place a bet on an
anticipated outcome via the internet. Typically bets are placed on events that
include horse racing, sports matches, and election outcomes. Gamblers can bet
on a variety of outcomes, for example, from picking the match winner, to
picking who will kick the opening goal, to what the winning margin in an
election will be. The increased availability of online wagering has also led to
the emergence of new forms of wagering, such as betting exchanges.
The second major form of online gambling is online gaming. This involves
staking money on casino-type games that are played online, such as poker,
roulette or blackjack. These types of games are interactive in nature and
typically involve game play, hence the moniker online gaming, which also
differentiates it from online wagering.
Other forms of online gambling include keno and lotteries.
While becoming more popular, this type of online gambling has not attracted the
same attention and concern as online wagering and online gaming.
It should also be noted that while online gambling generally refers to
gambling conducted over the internet via a computer, new platforms are emerging
which can facilitate online gambling, such as smartphones, interactive
television and even video gaming platforms. The development of these online
gambling platforms is also occurring at a time when non-credit card based forms
of online payment (electronic funds transfer services such as PayPal and
pre-paid debit cards) are also becoming more available. The emergence of new
technologies that can be used for gambling is discussed in the following
Use of terminology in the report
Interactive and online gambling are used interchangeably within this
report as overarching terms. More specific terminology, for example, to make a
distinction between gaming (casino-type games) and wagering (sports betting and
racing), is used where necessary for clarification.
Note on references
References in this report are to individual submissions as received by
the committee, not to a bound volume.
Structure of the report
The chapters of this report are organised around the key themes which emerged
during this inquiry and therefore do not directly mirror the terms of reference.
Following this chapter the committee has organised its report into four parts,
which contain 16 chapters.
Part 1 (chapters two to five) is an introduction and background to the
issues covered in later chapters which focus on the Australian environment. Chapter
two sets the context for online gambling, the growth experienced in the
industry, the attractions, the risks, and the available research on the
prevalence and problem gambling rates and the need for further research. Chapter
three introduces the main arguments for regulation and prohibition and chapters
four and five describe the various regulatory models used in overseas
Part 2 (chapters six to nine) focuses on the current regulatory
environment for online gambling in Australia under the Interactive Gambling Act
(IGA). Chapter six outlines the current regulatory environment. Chapter seven considers
the effectiveness of the current regulatory arrangements. Chapter eight looks
at other issues raised in relation to the IGA and chapter nine considers
advertising of online gambling under the IGA.
Part 3 (chapters 10 to 14) sets out issues related to sports betting. Chapter
10 provides an overview of sports betting and wagering. Chapter 11 covers key
issues in relation to sports betting and wagering online, including regulatory
approaches, betting on losing outcomes, 'in-play' betting and the practice of
credit betting. Chapter 12 addresses gambling advertising in relation to
sports betting, including its influence on problem gambling, its growth and its
regulation. Chapters 13 and 14 focus on the risk of match-fixing and corruption
in Australian sport, outline the government policy response and also cover
Part 4 (chapters 15 and 16) deals with the Interactive Gambling and
Broadcasting Amendment (Online Transactions and Other Measures) Bill 2011. Chapter
15 covers the provisions related to the IGA and chapter 16 considers the provisions
in relation to sports betting.
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