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Other issues raised in relation to the IGA
This chapter covers other issues raised with the committee concerning
the Interactive Gambling Act.
The need for legislation to be able to deal with emerging new technologies
Submissions highlighted the emerging technologies that can be used to
gamble and raised concerns that the current regulations may not be keeping pace
with these developments.
Wesley Mission noted that 'the potential for new, enticing and addictive
gambling products is limitless'.
Reports indicate that gambling applications on iPhones appeal to the tech-savvy
youth market and make it easy to lose money.
Wesley Mission emphasised:
The new technology makes it possible for problem gamblers to
lose more money, and faster, in the privacy of their own homes or anywhere they
are not observed. Young people are the main demographic group accessing the new
gambling and in many cases their lives will be ruined.
Dr Sally Gainsbury and Professor Alex Blaszczynski noted:
Advances in computer graphics and technology have led to the
development of sophisticated and graphically attractive Internet gaming sites
that operate 24 hours 7 days per week and are readily accessible through mobile
phones, personal wireless devices (e.g., iPad), and laptop computers. As a
consequence, there is an expression of public concern that Internet gambling results
in the negative impact and costs associated with excessive gambling and the
potential to exploit vulnerable segments of the community.
The Social Issues Executive, Anglican Church, Diocese of Sydney,
believes that 'new technology presents possibilities for casual wagering and
betting that have not been considered'.
J.G. Phillips and Professor Blaszczynski noted that:
Interactivity (and potentially gambling) can be achieved
using a number of technologies including PCs (through the internet), via
television (through the telephone network e.g. Foxtel) or through games
consoles and other devices (e.g. TiVo) that can access the internet, or by
using mobile devices such as mobile phones (e.g. via the internet or using
Clubs Australia highlighted the differences between online and
venue-based gambling including the growth of the online gambling environment,
adding that unlike traditional venues which have mandatory shutdown periods:
...new technologies foster a 'gamble anywhere, anytime'
mentality. Gamblers can now place bets twenty-four seven via the internet,
mobile phones or interactive televisions. As internet technology continues to
pervade our lives, the number of individuals choosing to participate in online
gambling will increase accordingly.
The Coalition of Major Professional and Participation Sports (COMPPS)
was of the view that the IGA provides a good framework but it needs to be
updated to 'keep pace with recent developments in technology'.
Regis Controls reported that gambling via mobile phones is a major
growth area for the gambling industry.
For example Paddy Power, which owns Sportsbet, reported a 42 per cent increase
in online customers and just over one third of its active customers made their
transactions via mobile devices.
Regis Controls also noted the potential for gambling via pay TV using the
remote control for sports wagering/betting. It submitted that state and
territory gambling authorities 'do not have a clear mandate to monitor gambling
via some of the new technologies e.g. mobile phones and pay-TV and there is no
overarching regulation by the Commonwealth Government covering the use of these
Leagues Club Australia also pointed out that the growth in the mobile
betting market over the past few years has provided customers a range of
services to choose from for their mobile phones, particularly the iPhone:
iPhone betting apps have provided a huge step forward for the
mobile market. iPhone (and smart phones in general) have such large,
user-friendly and high resolution screens and processing speeds that it
actually makes markets such as sports betting very user-friendly.
It also noted the growth in mobile betting announced by Betfair which
has previously marketed mobile betting as 'A bookie in your pocket'.
Betfair has seen remarkable growth in their mobile betting
announcing last week that it took more than £1 billion in bets on mobile
phones, with 168,000 users (up 122% on the previous years) and revenue was up
88% year on year. There is no doubt that mobile betting will continue to
increase as technology continues to improve. As well, Paddy Power in Great
Britain has released apps for mobile roulette, blackjack and poker, which will
make these games more accessible, and will no doubt drive similar revenue
Leagues Clubs Australia also highlighted the ability to gamble via
digital TV with the main provider currently being Tabcorp:
Through Foxtel services, Tabcorp has launched Sky Racing
ACTIVE. Sky Racing ACTIVE is an interactive television service that provides
Victorian and NSW Foxtel subscribers with the chance to view racing forms,
odds, fields and results on all Gallops, Harness and Greyhound TAB meetings.
Interactive betting through this service is available only to
TAB account holders in Victoria and NSW, who must satisfy identification
requirements. Account holders can also manage their TAB Account, deposit funds
and check transaction history. In the UK there are over 30 Digital TV stations
offering sports betting and fixed odds betting.
It reported that gambling through interactive digital TV has the
potential to grow significantly:
...by bringing more new and immediate opportunities to gamblers
and this will not be restricted to horse racing alone but many sports. There
are several digital TV channels that have signed exclusive rights with
companies to provide gambling products over the Interactive television and also
through SMS TV. These channels will provide live gambling products like poker, roulette,
sports betting, blackjack and racing packages. These services will be offered through
the digital TV and would have a revenue sharing model with the gaming company.
Greyhounds Australasia also mentioned the growth in gambling
opportunities via interactive TV and reported:
Wagering via interactive television originally entered the Victorian
market in early 2008, but has since been approved in New South Wales in 2008,
Queensland in April 2011 and South Australia in June 2011. It will not be long
before coverage is extended to all Australian States and Territories.
The committee notes media reporting that a company called Two Way has
developed an interactive TV wagering service with Tabcorp Holdings and Foxtel,
which has now been extended to include Racing and Wagering Western Australia
(RWWA). The report noted:
The company's products are currently being deployed by
leading wagering and interactive TV operators in Australia and New Zealand,
with the client list including Tabcorp, RWWA, TattsBet, Sportingbet, Betfair,
FOXTEL, Austar, Optus TV and Sky New Zealand - with Two Way having five year
contracts with some of these major companies. The unique positioning of Two Way
includes being the only company with a live betting service linked to the
betting engines of all the TABs, and is Australia’s first and only TV wagering
service. Highlighting that some punters are moving towards the service, in the
last three years more than 25,000 users have placed at least one bet using the
TAB ACTIVE interactive TV service on the Foxtel platform. Two Way also said
more than 15.5 million bets in total have been made, with total turnover
exceeding $137 million.
The Australian Internet Bookmakers Association was of the view that with
the growth in the digital economy 'it is simply not appropriate to think that
some sections of online business, such as gambling, can be quarantined from the
sweeping changes that are occurring'. It added:
Similar comments can be made with respect to the interactive
television betting. It is pointless to resist the introduction of this
technology. Instead, the question becomes how should this be managed?
Interactive television betting raises slightly different issues to online
gambling because, in the usual case, the person must choose to access a
particular gambling site whereas television viewers have little choice in the
stations they watch. However this objection is readily overcome if the
interactive gambling service is a supplementary “add on” to the televised
program. The client would choose whether a betting service should be available
alongside the live coverage of, say, a golf tournament, cricket match or
horserace. This would also avoid the concerns that arise with certain forms of
advertising around sporting events...
However, the Australian Racing Board was more cautious and pointed out:
One of the most significant implications for public policy
from the development of new technologies is the ingenuity of existing and
emerging technology companies and remote operators to introduce more and more
new products, to find ways of working around regulations, and to achieve high
growth to drive their low-margin, high-volume business models.
DCBDE recognised in its IGA review discussion paper that 'the continued
development of online gambling technologies, along with the increasing
convergence of gambling technologies will also be a significant factor in the
future regulation of online gambling'. It pointed to the growth of mobile
gaming via the use of smartphones noting that this is 'changing the landscape
Potential for harm minimisation measures
In response to the concerns about increased accessibility to gambling
resulting from new online technologies, some submissions rejected the view that
new technologies increase the risk and incidence of problem gambling and urged
the committee to think of new technology providing new opportunities for
...technologies, especially those used by online operators,
present opportunities for new operators to provide better harm minimisation
mechanisms than traditional wagering providers.
Betchoice also explained the opportunities provided by the online
environment to enhance probity. It explained that it is a requirement of its
licence that it maintain an account for each customer and that it complies with
the provisions of the Anti-Money Laundering and Counter-Terrorism Financing
Act 2006 (Cth). For an account to remain open, the Act requires that
customers provide a suitable level of identification within 90 days.
These checks are of a similar standard to the 100 point identity check. Compliance
is monitored and enforced by AUSTRAC and regular audits of all wagering
operators are conducted. Betchoice is able to use these requirements of the Act
and the associated technologies to provide customers with the ability to
monitor their gambling activity and restrict their access if they wish.
The potential for enhanced harm minimisation measures and probity in the online
environment is further discussed in chapter three.
The committee notes that the use of new technologies could be seen as
just an extension of the existing internet technology. For example, people who
would gamble anyway can access gambling on their mobiles instead of their
laptop. But the key question is whether this increased accessibility is
providing the same people with mobile access or whether mobile access is
opening up the market to more people, thus increasing gambling participation
and the potential for increased problem gambling.
The short answer is that we don't yet know the effect of these new
technologies on gambling behaviour. It would certainly be normal practice for
companies to try to increase market share and to do so would mean trying to
attract new customers through advertising and inducements, for example.
Advertising and inducements are discussed in the next chapter.
The committee agrees the IGA review needs to take into account the
emergence of new technologies for gambling to ensure the legislation stays as
up to date as possible and that it does not allow for loopholes. The IGA should
be reviewed more regularly to take account of technology developments. The
committee also believes there is a need to properly evaluate the risks from new
technologies that could be used for gambling and that they should be the
subject of further research. The need for further research in a number of areas
is discussed in chapter two.
Other online gaming opportunities
The NSW Law Reform Commission report into Cheating at Gambling mentioned
new forms of games such as Massive Multiplayer Online Role Playing Games which
could constitute virtual casinos offering a variety of gambling opportunities.
These are games such as World of Warcraft and Second Life. The games allow
players to interact in a virtual world which involves the use of virtual money
and trading virtual goods and services. The virtual money can, however, have
real currency values 'either through mechanisms comparable to currency
exchanges, where virtual currency is bought and sold, or through private
real-world transactions, including transactions on online auction sites'.
The Law Reform Commission raised the question:
...whether any of the forms of gaming that may be made
available in virtual worlds (including, potentially, wagering on player versus
player contests), but which can have real-world economic consequences, should
be regulated by any of the existing laws at either the State or Commonwealth
level, including for example laws prohibiting participation by minors.
The report noted that some of these activities could potentially come
within the reach of the IGA as they could be seen to involve a game 'played for
money or anything else of value' on an internet carriage service. It concluded
that this is a matter for Commonwealth regulation. It also noted that similar
questions have arisen in the US where the Unlawful Internet Gambling
Enforcement Act prohibits:
'the staking or risking by any person of something of value
upon the outcome of a contest of others, a sporting event, or a game subject to
chance' but specifically exempts 'participation in any game or contest in which
participants do not stake or risk anything of value other than...personal
efforts of the participants in playing the game...or...points or credits that
the sponsor of the game...provides to participants free of charge and that can
be used or redeemed only for participation in games or contests offered by the
Regis Controls pointed out some other examples which in its view should
be treated as gambling opportunities:
There are other forms of new technology which are not
generally regarded as part of the gambling industry but in our view should be
treated as such and should be appropriately regulated and taxed. There are
several hundred SMS competition sites often linked to television advertisements
offering prizes (often fairly minimal in relation to the total cost of entry)
for quizzes, footy tipping, pick the best catch etc. Many of these providers
target minors who only need a mobile phone to enter and pay. A typical entry cost
Emerging gambling opportunities for
Some potential new gambling opportunities appear to be targeted at
youth. The committee notes the website wyngle.com.au, which is based on a new
concept called ratio shopping. It lets customers try their luck at purchasing
an item for $1, otherwise they pay the advertised price. The website has
been registered as a lottery with the NSW Office of Liquor, Gaming and Racing
and displays the state government logo on its homepage. The Responsible
Gambling Fund chairman, Mr Harry Herbert, expressed concern that young people
could access the website and over-commit themselves as they hope to win an item
for $1. The director of the National Children's and Youth Law Centre, Mr
'Young people under 18 generally cannot get a credit card,
but they can have a debit card so they may by enticed to give ratio shopping a
age or have the consent of a parent or guardian to purchase. It's a bit of an
issue then that Wyngle's sign up page doesn't ask for information about a
The committee notes that in July 2011 the media reported that Facebook
was promoting a game called Slotomania which could be played by children as
young as 13 for real money. The game appears to target young people with
cartoons and encourages players to purchase coins with credit cards, BPAY or
PayPal. The CEO of Clubs Australia wrote to the government warning about the
site. Minister Conroy's office responded that the government would be conducting
a review of the Interactive Gambling Act.
Clubs Australia also noted the format and content of similar sites such
as Slotmania are designed to appeal to children:
Social networking sites such as Facebook allow account
holders of all ages to access gambling content through programs known as “apps.” Children can play slot games, buy credits and send free gifts such as
“five free gifts” to friends. Apps such as “Slotmania” and “Texas HoldEm Poker”
operate without any age verification measures and allow under-aged gamblers to
purchase games and credits via PayPal or credit card accounts. Generous
inducements encourage users to purchase “credits” in bulk amounts and players
are continually encouraged to “invite” friends to play.
The NSW Law Reform Commission report also drew attention to games such
as Slotomania which simulates gaming machines and Farkle Pro which simulates an
ancient dice game. While it appears that players cannot redeem points for cash
and such games may be legal, 'a concern does exist that they may encourage
young people to engage those forms of online gaming that do amount to unlawful
The committee was concerned to hear about online games that appear to be
targeting children and notes this will also be considered as part of the
current review of the IGA underway by DBCDE:
The convergence of gambling and social networking has led to
the development of gambling-themed games on social media websites that are
aimed at adolescents. Griffiths et al (2010) suggests that such ‘money free’
gambling introduces adolescents to the ‘principles and excitement of gambling
without experiencing the consequences of losing money’. In addition, these
games also often contain advertising or links to real-money gambling websites,
raising issues regarding social responsibility.
While supporting the inclusion of this issue in the review the committee
notes that in its 2010 report, the PC recommended that the ministerial council
on gambling should develop a consistent national approach for regulating
gambling–based quizzes, competitions and auctions operated or marketed through
television, mobile phones and the internet'.
The committee agrees with this recommendation.
8.32 The committee supports the recommendation of the Productivity Commission
that the COAG Select Council on Gambling Reform should review new gambling
opportunities, particularly those which appear to target youth, with a view to
developing a national regulatory approach.
Although it would appear that there has been growth in the popularity of
the committee did not receive a great deal of evidence on this term of
reference and the evidence that was received was evenly divided. The
Responsible Gambling Advocacy Centre argued the major issue is that 'if people
have placed a bet on the outcome of a political event they are likely to vote
in accordance with that bet. This can effectively undermine the election
Others saw no issue with betting on election outcomes. The Australian
Internet Bookmakers Association advised:
It is not clear why election betting has been raised as a
term of reference. The integrity of elections is subject to intense public
scrutiny - the
possibility of cheating in betting on this event is remote. Election betting
has been conducted for over a decade in Australia and for longer periods in
such places as the United Kingdom, without concerns being raised. There are no
reasonable grounds for an objection to be made on election betting.
As betting on election outcomes was not raised as a major issue of
concern, the committee makes no comment.
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