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The Interactive Gambling Act
In this part of the report, the committee provides the background and detail necessary to understand the current regulation of interactive gambling services in Australia by the Interactive Gambling Act 2001 (IGA). It covers the issues raised with the committee regarding the effectiveness of the IGA and advertising covered by the IGA.
The current regulatory framework
This chapter describes the development of the primary legislation in
Australia for interactive gambling, the Interactive Gambling Act 2001
(IGA), and provides a brief explanation of how it works, what is prohibited by
the IGA and what is allowed.
The power of the Commonwealth to regulate
Historically, the regulation of gambling has been the responsibility of
state and territory governments. However, the Commonwealth regulates
interactive gambling as it uses communications services which, under the
Australian Constitution, are a Commonwealth responsibility.
Currently, offline gambling is primarily a state and territory responsibility. However,
state and territory legislation regulates the way in which legal forms of
interactive services can be provided, for example, by licensing providers and
setting requirements to protect players.
Working towards the Interactive Gambling Act
The IGA regulates interactive gambling services to Australians. It is
the end result of work undertaken over a number of years to respond to concerns
about the extent of problem gambling and its social costs, the increased availability
and accessibility of gambling services in Australia and the threats posed by
new technologies which have the potential to significantly worsen the problem. Thus
it seeks to address a multiplicity of issues posed by the various forms of and
platforms for interactive gambling. The key question then as now is whether
prohibition or liberalisation is a more effective approach to address these
issues. This will be the key issue discussed in the next chapter but it is
useful to firstly provide a brief overview of the work undertaken to develop
the government's current position on interactive gambling which resulted in the
Working with states and territories
In the late 1990s, when regulatory models for online gambling were in
their infancy, a cooperative approach by all state and territory governments
was pursued and a draft regulatory model was developed.
However, agreement on this uniform regulatory model for online gaming was not
able to be reached.
1999 Productivity Commission Report
As a result of the growing community concern over problem gambling, the
Productivity Commission (PC) conducted an investigation and in 1999 it produced
a report on Australia's Gambling Industries. In relation to online gambling,
the PC found that 'online gambling and interactive TV potentially represent a
quantum leap in accessibility to gambling, and will also involve new groups of
While noting some features of internet gambling which may moderate problem
gambling, the PC concluded:
Overall, however, the Commission considers it likely that
(without harm minimisation measures and appropriate regulation) online gambling
will pose significant new risks for problem gambling.
While recognising the potential harms of online gambling for consumers,
the PC recommended 'managed liberalisation':
Internet gambling offers the potential for consumer benefits,
as well as new risks for problem gambling. Managed liberalisation — with licensing
of sites for probity, consumer protection and taxation — could meet most
concerns, although its effectiveness would require the assistance of the
Senate select committee
The PC report was followed in March 2000 by the report of the Senate
Select Committee on Information Technologies, Netbets: A review of online
gambling in Australia.
The committee also favoured managed liberalisation. It concluded that
prohibition would be difficult and expensive to implement and would not prevent
an increase in problem gambling. It believed that prohibition would steer
gamblers to overseas gambling sites and the committee favoured improved
regulation and the implementation of harm minimisation policies.
In the meantime, the government announced the establishment of a
Ministerial Council on Gambling and its intention to examine the feasibility
and consequences of banning interactive gambling.
In April 2000, at the first meeting of the Ministerial Council on
Gambling, the Commonwealth called on the states and territories to join a
voluntary 12-month moratorium on new interactive gambling services while the
feasibility and consequences of a permanent ban were examined. This was
rejected by the majority of states and territories.
The response was the Interactive Gambling (Moratorium) Bill 2000 which
applied a 12-month moratorium on new interactive gambling services from 19 May
2000 to 18 May 2001 until further research was conducted into the industry. The
Senate Environment, Communications, Information Technology and the Arts
Legislation Committee conducted an inquiry into the bill and reported in
An amended moratorium bill was passed which excluded certain forms of wagering.
The legislation was passed in both Houses in December 2000.
During the moratorium period, the National Office for the Information
Economy (NOIE) conducted an investigation into the feasibility and consequences
of banning interactive gambling.
It concluded that no method would be 100 per cent effective in preventing
Australians accessing interactive gambling services. However, the report also
found that a ban would be consistent with the Commonwealth's e-commerce
strategy which called for appropriate legal and regulatory measures to protect
The committee notes that the 2010 PC report found several flaws in the
underlying cost/benefit analysis that it believed limited the usefulness of the
NOIE report findings. These were:
- the report considered the ban in isolation from any other
potential regulatory solutions that may have been able to minimise harms;
- the analysis assumed the ban would be effective at stemming
demand for online gaming and would have zero implementation and enforcement
the model used many questionable assumptions.
The PC suggested that these concerns, combined with new evidence since
the report was published, warranted a re-evaluation of online gaming policy.
The PC findings and conclusions are discussed in the following chapters.
Interactive Gambling Act
In April 2001, the Interactive Gambling Bill 2001 was introduced into
the Senate. It was referred to the Senate Environment, Communications,
Information Technology and the Arts Legislation Committee for inquiry and
The purpose of the IGA is to limit the availability of and discourage
the provision of interactive gambling services to Australians. There are two
key elements to the IGA. First, the provision of an Australian-based
interactive gambling service is prohibited.
It is important to note that the offence provision applies to the providers of
interactive gambling services and not the users. In addition, Australian
companies can offer the banned services to overseas-based gamblers. However,
the minister has the capacity to declare 'designated countries' where it is an
offence to provide services to them.
The second element of the IGA is to establish a complaints scheme
administered by Australian Communications and Media Authority (ACMA) which
enables Australians to make complaints about interactive gambling services on
the internet available to Australians.
What is prohibited?
Australian-based online gaming websites (e.g. casino-type games such as
poker and roulette, and virtual electronic gaming machines) are prohibited by
the IGA. Online wagering is not prohibited by the IGA but there are two
- online wagering services before an event/match commences are
permitted. However, 'in-play' wagering on the outcome of an event, i.e. betting
on the outcome of an event online, after the event has started, is prohibited
but customers can use the TAB or phone for such bets; and
- 'ball-by-ball' betting is permitted via the telephone or in
person (e.g. TAB) during the event/match. However, this wagering (e.g. who will
score the first try) in the online format is not permitted during the event.
These 'in-play' exclusions were considered to be the most harmful forms
of online wagering as the internet can facilitate rapid and continuous betting.
The IGA also contains provisions for the Minister to exclude any service from
the prohibition at their discretion.
The offence created by the IGA to intentionally provide a prohibited
interactive gambling service, as defined by the IGA, to customers in Australia
extends to offshore providers of interactive gambling services to customers in
Australian residents are able to make complaints about interactive gambling
services. If the complaint is upheld by ACMA, internet service providers (ISPs)
are notified of the prohibited service.
ISPs must then provide customers with an approved filter.
What is allowed?
The IGA allows certain wagering and gaming services to be provided in Australia.
Traditional wagering services, where the internet is used to facilitate an
established form of wagering activity, were excluded from the IGA or allowed. Therefore
it is legal to offer a traditional betting or wagering service on events before
they commence over the internet or other communications device.
The following table provided by Betfair illustrates what is permitted
under the IGA.
Telephone betting - sport
Telephone betting -
Online betting - sport
Online betting - racing
Online wagering on non-sporting events is not prohibited by the IGA. Most
forms of traditional lotteries offered over the internet are exempt from the
prohibition as they are unlikely to pose a risk to problem gamblers. Only rapid
or player-initiated online lotteries such as online scratchies are banned as
they have been judged to present a greater risk to problem gamblers. The IGA
also provides for the minister to prohibit 'highly repetitive or frequently
drawn forms of keno-type lotteries or similar lotteries,' should these become a
The Department of Broadband, Communications and the Digital Economy
noted that the current regulation of interactive gambling services 'has led to
a lack of platform neutrality, which may need to be reconsidered. The use of
platform neutral legislation to regulate the provision and advertising of these
services may prove easier to enforce.' However, it recognised that achieving
platform neutrality would involve consideration of 'opening up more continuous
forms of micro-betting with its associated risks for problem gambling and
potentially increasing opportunities for gambling fraud through match-fixing'.
Advertising of prohibited interactive services
A third element of the IGA is the prohibition on the advertising of
prohibited interactive gambling services to Australians on the internet, in
print, broadcasting or datacasting media.
It is prohibited to advertise prohibited interactive gambling services on
broadcast media such as free-to-air television and radio, in print media such
as magazines and newspapers, and on billboards. Advertising on internet
services aimed at an Australian audience is also banned. This means that
websites designed for a specifically Australian audience will not be able to
carry interactive gambling advertisements.
However, there are various exceptions including political advertising,
incidental or accidental advertising, and advertising in imported print
publications or websites that are not aimed specifically at an Australian
audience. ISPs are generally protected by the Criminal Code from liability for
third party content that is innocently transmitted over their networks. In
other words, an ISP or other third party can only be guilty of the offence if
it knowingly or recklessly transmits the advertisement.
The following agencies are involved in administering and enforcing the
The Department of Broadband,
Communications and the Digital Economy
The Department of Broadband, Communications and the Digital Economy (DBCDE)
has policy responsibility for online gambling and administers the IGA. It advised
that as the IGA does not specify who considers complaints about advertising of
prohibited online gambling services, it conducts a preliminary assessment and
refers potential breaches to the Australian Federal Police (AFP). Potential
breaches of licence conditions are referred to the Australian Communications
and Media Authority (ACMA).
The Australian Communications and
ACMA considers complaints about prohibited content itself, notifying
approved PC filter vendors (and a police force if appropriate) of prohibited
content. ACMA refers Australian based content to the AFP. Ms Jennifer McNeill,
Acting General Manager, Content, Consumer and Citizen Division, Australian
Communications and Media Authority, informed the committee:
In general terms, the Australian Communications and Media
Authority has two main roles to play in this gambling space. The first is the
role that it is given under the Interactive Gambling Act whereby the authority
receives complaints about prohibited internet gambling content. It also has a
role registering industry codes of practice dealing with interactive gambling
matters. It also has a role investigating particular advertising of prohibited
gambling services in a broadcasting context. So that is the suite of
responsibilities that it has under the Interactive Gambling Act itself. Sitting
slightly separate from that is a role that it has in the coregulatory
broadcasting space where the Commercial Television Industry Code of Practice
contains rules that the commercial television industry members have agreed to
abide by. That restricts the sort of advertising and the timing of advertising
that can be run on commercial television programs...
Australian Federal Police
The IGA requires ACMA and DBCDE to refer alleged criminal activity to an
Australian police force. The AFP assesses referrals from ACMA (prohibited
internet gambling content) and DBCDE (advertising of prohibited services)
against its Case Categorisation and Prioritisation Model.
Enforcement of the IGA is discussed in the next chapter.
Review of the Interactive Gambling
On 27 May 2011, the Council of Australian Governments (COAG) Select
Council on Gambling Reform announced that the Department of Broadband,
Communications and the Digital Economy (DBCDE) would undertake a review of the
IGA. The review is due for completion in the first half of 2012.
The department's website provided some further detail:
The review will include an examination of the operation of
the IGA and the effectiveness of the current provisions. It will also include
further consideration of international regulatory approaches to online gambling
and their potential applicability to the Australian context. It will also
examine the ability to improve harm minimisation measures for online gambling
The review will look at the enforcement of existing
prohibitions on certain types of online gambling, the way the Act applies to
different technological platforms, and the growing number of Australian
consumers gambling online in an unregulated environment.
The Australian Government will consult widely with key
stakeholders, states and territories, and the broader community in undertaking
On 19 August 2011, the Terms of Reference for the review were released:
Having regard to the issues facing the enforcement of the
Interactive Gambling Act 2001 (the Act), the Department of Broadband,
Communications and the Digital Economy is to undertake a review of the
operation of the Act, with reference to:
- the growth of online gambling services (both regulated and
unregulated) in Australia and overseas, and the risk of this to the incidence
of problem gambling;
- the development of new technologies, including smart-phones, and
the convergence of existing technologies that may accelerate the current trend
towards the take-up of online gambling services in Australia and overseas;
- the adequacy of the existing provisions of the Act, including
technical, operational and enforcement issues relating to the prohibition of
interactive gambling services and the advertising of such services;
- consideration, where appropriate, of technology and platform
neutrality including current distinctions relating to 'betting on the run' and
- international regulatory approaches to online gambling services
including consideration of their effectiveness and cost;
- examination of the social, tax, jurisdictional and enforcement
aspects of regulated access to interactive gambling services currently
prohibited under the Act;
- harm minimisation strategies for online gambling;
the findings of the Joint Select Committee on Gambling Reform
inquiry into interactive and online gambling and gambling advertising and the
Productivity Commission Inquiry Report on Gambling (2010); and
- any other relevant matters.
In undertaking the review, the department will consult with
key stakeholders, states and territories and the broader Australian community.
The department will commission additional research as needed.
The department is to provide a report of its findings to the
Minister for Broadband, Communications and the Digital Economy by the first
half of 2012, subject to the Joint Select Committee on Gambling Reform
reporting by the end of 2011.
On 24 August 2011, DBCDE released a discussion paper which outlines the
key issues for the review and includes a number of broad questions designed to assist
those wishing to make a submission to the review.
COAG Select Council on Gambling
The Department of Families, Housing, Community Services and Indigenous
Affairs (FaHCSIA) told the committee that the department 'has a strong interest
in policy aimed at minimising harm from problem gambling in all its forms' and:
The Department shares the growing community concerns over the
potential impacts of interactive and online gambling and gambling advertising,
particularly the impact on vulnerable Australians.
FaHCSIA is supporting the COAG Select Council on Gambling Reform as it
progresses 'the development of a national response to the Productivity
Commission's 2010 report on gambling by the end of 2011. This national response
will include consideration of issues related to the regulation of online
The amount of work being undertaken by various organisations in this
area at the current time and the potential for duplication was raised by
Given the committee's Terms of Reference are quite broad and cover issues other
than the IGA, the committee considers that this inquiry will gather and provide
valuable information which can be taken into consideration during other
processes, including the DBCDE IGA review process.
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