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Executive Summary
This report covers a reference inquiry and a related bill
inquiry. The subject matter of each is intertwined under the broad heading of
online gambling. However, the report is divided into parts to clarify the
distinctions between the different forms of online gambling and how they are
regulated.
Online gambling is a fast growing form of gambling
internationally as well as in Australia. Although online gambling is a rapidly
growing market, many jurisdictions, including Australia, are still considering
whether or to what degree to allow it. The primary legislation covering online
gambling in Australia is the Interactive Gambling Act 2001
(Commonwealth). It mainly covers casino-type games such as online poker with
exclusions for sports betting and wagering which are largely regulated by state
and territory governments.
Part 1
Part 1 is an introduction to the key issues arising from the
inquiry which are addressed from an Australian perspective in later chapters.
It sets the scene for Part 2. Part 1 consists of four chapters covering issues
and research on: online gambling prevalence, characteristics of online gamblers
and online problem gambling rates. Part 1 also introduces the major arguments
for and against prohibition of online gambling and it covers forms of
regulation and prohibition used in some overseas jurisdictions.
The main focus of the committee's findings in Part 1 centre
on the lack of comprehensive data and research in this emerging area at a national
level on which to base findings and proposed actions. Lack of research was also
raised as an issue in the committee's first inquiry into the design and
implementation of a mandatory pre-commitment system for electronic gaming
machines.[1]
The committee has not yet received a government response to its first report. The
committee therefore reiterates its recommendation regarding the need for a
national independent research institute on gambling which would also cover
national research on online gambling. In the meantime, the committee recommends
that the current review of the Interactive Gambling Act (IGA), being undertaken
by the Department of Broadband, Communications and the Digital Economy,
commission relevant research in the local online gambling environment (see
chapter seven).
Part 2
Part 2 consists of four chapters. It covers the regulatory
situation in Australia with a focus on the IGA. It looks at the effectiveness
of the IGA in relation to online gambling services and advertising covered by the
Act. The committee agreed a position on advertising covered by the IGA which
involves retaining and strengthening the ban on advertising to include
practices which currently are not clearly covered by the IGA such as practice
sites, links to gambling sites, misleading advertising and inducements to
gamble.
While the committee agreed to retain the IGA and to take
steps to improve its effectiveness in relation to interactive gambling
services, the committee did not agree on how to address the area where the IGA
was seen to be most deficient: the ability to limit or restrict Australians
accessing overseas gambling websites. These views are set out in additional
comments at the end of the report.
Part 3
Part 3 consists of five chapters and covers online gambling
in relation to sports betting and wagering. Apart from the exceptions of
'in-play' betting online,[2]
regulation of sports betting and its associated advertising is not covered by
the IGA but by state and territory governments. Evidence received confirmed the
high level of growth in this form of gambling. It also confirmed the concern in
the community about the proliferation of sports betting advertising. While the
committee welcomes the work underway by government and industry to reduce and
control the broadcasting of live odds, it believes there should be a total ban
on their promotion, underpinned by legislation.
The committee heard that the level of gambling advertising is
contributing to the development of gambling problems, particularly among young
men. The high level of betting promotion during sport is making it difficult
for some problem gamblers to recover. When they try to return to watching sports
they previously enjoyed, the promotions encourage them to gamble again.
The committee was also warned of the effects that this high
level of advertising can have on children who are highly influenced by gambling
advertising. This is of concern for a number of reasons. Research indicates
that one of the risk factors for problem gambling is early onset: the earlier
one starts gambling, the more likely they are to continue gambling, and along
with that the probability of developing a gambling problem increases. Recent
media programs have shown young children associating their love of sport with
knowledge of betting odds.[3]
This normalisation of gambling—the 'gamblification' of sport— is a major
concern for the committee. To arrest this trend, the committee has recommended
measures that restrict gambling advertising beyond a ban on live odds.
While the committee recognises that regulation of
advertising for sports betting currently lies with the states and territories, it
believes this issue is sufficiently serious to warrant consideration of Commonwealth
involvement should states and territories fail to adequately address this
issue.
The committee also received evidence of practices which, in
its view, do not conform with responsible gambling practices, such as offering
credit to online gamblers and the existence of third party commissions or
finders' fees which are not adequately transparent to the consumer. Regulation
of offering credit is not consistent between jurisdictions and the regulation
of third party commissions appears to be non-existent. These issues highlighted
the overarching issue in regulation of sports betting which is the lack of
consistency, with some jurisdictions having higher harm minimisation and consumer
protection standards than others. The online environment requires regulatory consistency
as it is too easy for customers to move sites at the click of a mouse/button. The
challenge is for jurisdictions to come together to achieve national consistency
in their regulation which does not result in a lowering of current standards
but achieves appropriate harm minimisation and customer protection measures.
Part 4
Part 4 consists of two chapters and covers the associated
bill referred to the committee. The bill covers issues discussed in Parts 1 and
2 to do with the IGA and Part 3 on sports betting and wagering. The committee's
view on the need for amendments to the Broadcasting Services Act 1992 to
restrict gambling advertising is covered in this part of the report.
As with the last inquiry, again the most powerful evidence
came from individuals who have experienced problems with online gambling. The
committee heard from an individual who experienced serious problems when he used
an overseas casino website. He accessed the website via an advertisement on a
social networking site. The advertisement mentioned making extra money, not gambling.
He lost money through unauthorised transactions and he has gone through serious
financial and personal difficulties while attempting to resolve the issue of
unauthorised transactions through a less than responsive overseas regulator. In
addition, through counselling centres such as the University of Sydney Gambling
Treatment Clinic, the committee heard about the recent increase in individuals
with sports betting problems using legal Australian websites. As mentioned
above, these people have been particularly influenced by the proliferation of
sports betting advertising which has then hindered their recovery.
These inquiries have been an opportunity for the committee
to learn about relatively new forms of gambling which are entering a period of
growth. Now is the time for all levels of government to learn the lessons from
other forms of gambling such as the liberalisation of electronic gaming machines
and to address issues of concern in the online environment early to minimise
the potential for harm.
Mr Andrew Wilkie MP
Chair
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