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Chapter 16
Interactive Gambling and Broadcasting Amendment (Online Transactions and
Other Measures) Bill 2011: Amendments relating to sports betting
16.1
This chapter covers the issues raised by:
- the clause in the bill prohibiting gambling operators from
offering specific types of betting services; and
- the schedules in the bill relating to amendments to the Broadcasting
Services Act 1992 (Broadcasting Act) and the Criminal Code Act 1995
(Criminal Code).
Clause 3—Prohibitions on corporations offering gambling services
16.2
Clause 3 of the bill prohibits gambling service providers from offering
spot betting (also known as 'micro' or exotic betting), in-play betting or any
similar form of betting. For example, these could include betting on the first
penalty or the first goal during a football game, the first duck in a cricket
match or the first yellow card in soccer or rugby. It also prohibits operators
offering players the option of betting on losing outcomes.[1]
16.3
These bet types are defined and discussed in detail in previous
chapters. Betting on losing outcomes and 'in-play' betting are covered in
chapter 11. Exotic bets are also covered in chapter 14.
16.4
The maximum penalty established by the bill for offering these forms of
gambling is 10,000 penalty units which is approximately $1,100,000.[2]
16.5
By prohibiting these forms of gambling, the bill attempts to address what
is thought to be a riskier form of betting for problem gambling as well as match-fixing
resulting from bets on 'micro'-events and bets on losing outcomes.[3]
In the Second Reading Speech, Senator Xenophon noted that the National Rugby
League (NRL) had recently banned some exotic betting options following a
match-fixing scandal in 2010 and that the Australian Football League (AFL) had
also banned exotic betting on things such as the last goal in a game, tribunal
verdicts and 'the first coach to be sacked'.[4]
Issues raised with the committee
16.6
Some submitters supported an outright ban on the offering of certain bet
types as proposed in this clause of the bill. For example, the Tasmanian Inter-Church
Gambling Taskforce supported the principle of prohibiting the unorthodox bet
types proposed by the bill, noting that they have:
...the potential for corrupt gamblers to entice players into
rigging outcomes with a view to profiting from the proceeds of gambling. This
can compromise the integrity of the sport, undermine public confidence in
performances and put pressure on sports people who may get caught up in it,
possibly leading to the destruction of their careers...Although such
prohibitions are most relevant to online gambling we believe that, in
principle, they ought to apply to all methods of gambling.[5]
16.7
Others, such as Tabcorp, argued that these bet types did not pose an
integrity problem and that any consideration of regulatory changes to such bet
types ought to be undertaken by state and territory governments with a view to
national consistency:
...exotic and other similar bets placed with Australia's TAB
pose no greater risk to sports integrity than head to head contests because
suspicious betting activity on all bet types is monitored and reported by the
TABs. If exotic bets were to be prohibited, then consumers would either discontinue
their betting activity or such activity would be driven underground, either to
illegal domestic or offshore operators...
With respect to spot betting, exotic betting, in play betting
and betting on losing outcomes that occurs through non-online channels,
Tabcorp's position is that these are matters for the consideration of state and
territory governments. There is a role for the Commonwealth in encouraging
national consistency in the regulation of such matters.[6]
Definitions of bet types
16.8
The bill establishes that the definitions for betting on losing
outcomes, exotic betting, in-play betting and spot betting be prescribed by the
regulations.[7]
This results in ambiguity about which types of gambling will be prohibited
under the bill. The use of this broad definition may be a result of the vast
number and continuing development of betting options offered to consumers and
the risk of ruling out particular types of gambling by being overly specific
when considering which bet types to prohibit.
16.9
FamilyVoice Australia supported the clause but also but noted that
leaving the definitions to be specified by the regulations was a 'drafting
deficiency':
...it would appear that if no such regulations are made then
the terms would have no meaning and the offence could be not be prosecuted.
It would be better for the bill to be amended to provide
definitions for these terms while allowing for regulations to add to the
definitions. This would be desirable as in a rapidly changing field new
problems may emerge which could be suitably addressed by means of regulation
rather than requiring the amendment of the statute.[8]
16.10
The Australian Racing Board was generally supportive of the clause in
the bill but also noted that consultation with sporting and racing bodies would
be required on the drafting of the regulations, 'recognising their capacity to
provide useful advice on the types of bets which have potential to cause
integrity problems'.[9]
16.11
The Senate Scrutiny of Bills Committee also noted that it would be
preferable for the 'gambling services' to be defined in the primary
legislation, not in the regulations:
...subclause 3(2) provides that a number of key terms which
define the offence are to have their meaning ‘prescribed by the regulations’,
raising the question of whether this is an appropriate delegation of
legislative power. The explanatory memorandum does not address the reasons for
this approach. In general, it is preferable that offences be dealt with in
primary legislation.[10]
Applicability to corporations
16.12
Betfair noted that a deficiency in the bill was that the proposed
prohibition applied only to wagering service providers and not to bookmakers:
The Draft Bill seeks only to prohibit corporations from
accepting bets on the Prohibited Offerings, which will allow bookmakers
operating as sole-traders or in partnership to continue to offer these bet
types to Australian residents. Accordingly, the proposed prohibition fails to
prevent Australian punters from being able to place wagers on the Prohibited
Offerings. The target of the legislation has clearly been missed.
Further, Betfair considers that any prohibition that applies
only to wagering service providers which are corporations is discriminatory in
nature and places certain Australian licensed operators on an uneven playing
field.[11]
Betting on losing outcomes
16.13
Betfair, Australia's only licensed betting exchange, strongly rejected
the concept of prohibiting betting on losing outcomes:
There is a misapprehension that the only betting platform on
which a punter can lay horses is a betting exchange. This is not the case. It
has long been possible to oppose horses through “traditional” channels and
technology has made it even easier. It can be achieved via a bookmaker or the
TAB, simply by backing all other selections in the race and this has become
even easier with automated bet placement technology.[12]
...As outlined earlier in this submission, racing and
sporting industry bodies have embraced the betting exchange model as an
effective tool in the detection and prevention of gambling related corruption.
There is no evidence to suggest that since Betfair’s arrival in Australia,
allowing punters to place lay bets has been the cause of any gambling related
corruption in Australian racing or sport.[13]
16.14
The Tasmanian Department of Treasury and Finance commented on the bill's
likely effect on the operation of Betfair, which is licensed in that state, and
defended the integrity of the betting exchange's business operations in
Australia since 2006:
Of particular concern is the restriction on betting on losing
outcomes. As the meaning of key definitions in this clause are to be set out in
regulations, it is not yet clear which types of bets and which gambling
services will be captured by the provision.
Nevertheless, it would appear that the legislation is likely
to prevent a betting exchange from operating its business in Australia.
To bet on a losing outcome is a fundamental feature of a
betting exchange. A betting exchange enables registered players to bet against
each other on events hosted on the betting exchange operator's website. The
operator acts as a broker, matching bets between backers that a participant in
an event will win and those that take the opposing position. The opposing
position is a 'lay bet' - betting to lose.
Australia's only betting exchange, Betfair Pty Ltd, was
licensed in Tasmania in February 2006 under the Gaming Control Act.
Betfair has a highly transparent wagering system where all
players must register with Betfair and have their identification verified. It has
robust audit trails that enable every bet placed to be traced back to the
customer. Betfair has information-sharing agreements with racing and sports
industry bodies in Australia and worldwide to provide sporting bodies with
access to relevant wagering data to ensure the integrity of their sports.[14]
Committee majority view
16.15
The committee majority noted in chapter 11 that Australia's only
licensed betting exchange, Betfair, has been operating in the Australian market
since 2006, and that no significant concerns about its operation have come to
light. However, the committee majority also noted the risks inherent in being
able to bet on losing outcomes and supports betting exchange providers working
closely with governing bodies, as Betfair has done, to mitigate the risk to the
integrity of the sporting or racing product on which lay bets are placed.
Therefore, the committee majority does not support the bill's proposed
prohibition on betting on losing outcomes.
Exotic betting
16.16
Most submitters to the bill inquiry did not support an outright ban on
exotic betting.
16.17
The Responsible Gambling Advocacy Centre (RGAC) argued that while exotic
bet types were problematic, prohibition would not be effective:
Firstly, these types of interactive gambling have led to
corruption in sports. Where there is an element of participation, there is
potential for exploitation ...Secondly, they are more attractive to gamblers
because of seemingly better odds. Prohibition of such bets is likely to result
in these types of bets going 'underground', which would make it more difficult
to track and could result in a greater amount of corruption.[15]
...The Centre is of the opinion that while it is sometimes in
the best interest of the consumer to prohibit the availability of certain types
of betting, prohibition would be ineffective in this context.[16]
16.18
Instead of a blanket ban on exotic bets, the RGAC recommended mechanisms
such as compulsory pop-ups, links to gamblers' help websites and telephone help
lines, compulsory breaks in play and easily accessible pre-commitment schemes
to enable consumers to block themselves or their children from certain
websites.[17]
16.19
A number of submissions also suggested that sporting bodies be granted
the power to veto specific types of bets where the integrity of the event may
be compromised.
16.20
The Coalition of Major Professional and Participation Sports (COMPPS)
supported such an option:
The COMPPS sports do not oppose spot-betting per se. They do,
however, seek support for a power of veto over types of spot-bets that may be
offered by betting operators on their sports where they have serious integrity
concerns over the type of bet that is being offered.[18]
16.21
The veto power (discussed in greater detail in chapter 13) was also
supported by COMPPS' member sports:
Netball Australia supports the notion of the right of veto
for sports over types of “spot betting”; and strongly discourages any bets on
scenarios that could be open to breaches of integrity.[19]
16.22
Betfair also supported the sporting codes having veto power over bet
types and argued that prohibition would simply encourage Australians to bet
offshore:
(a) the sports themselves are in the best position to
determine whether a particular bet-type is liable to any form of corruption or
manipulation and any decision should remain in the hands of the sporting bodies
to reasonably determine the number and types of exotic markets that are offered
on a particular event; and
(b) as with all forms of prohibition in an increasingly
borderless world, the Bill will not be successful in preventing Australian
residents from continuing to wager on exotic bets; it will simply encourage
Australians to bet with offshore operators who will continue to evade
Australian legislative and licensing requirements and often do not afford the
appropriate player protection and responsible gambling measures.[20]
16.23
However, the Social Issues Executive of the Anglican Diocese of Sydney argued
that a ban as proposed in the bill was 'more straightforward and understandable
to the community than COMPPS’ proposal for specific veto of various particular
kinds of exotic betting'.[21]
Committee majority view
16.24
As already stated in chapter 14, the committee majority holds some
concern about exotic bets, noting in particular the evidence from the
University of Sydney Gambling Treatment Clinic suggesting that the existence of
exotic betting opportunities presents difficulties for problem gamblers. While
recognising that exotic bet types make up a small portion of the overall sports
betting market, the committee majority notes that the risks associated with
exotic betting have the potential to be damaging to the integrity of Australian
sport. The committee majority commends and supports the action taken by the AFL
and NRL to eliminate certain exotic bet types. The committee majority considers
that the work being undertaken by Sports Ministers is the appropriate forum in
which to consider nationally consistent policies in relation to regulation of
exotic betting, including providing sports with the right to veto bet types. Until
such time as a national independent research institute on gambling (as
recommended in chapter two and in the committee's previous report) can
undertake this work, the committee majority suggests that research on the risks
of exotic betting (both for those who bet and for sporting participants) and
appropriate regulatory responses be commissioned under the existing work by
Sports Ministers on the National Policy on Match-Fixing in Sport to assist
sports' with decisions in relation to veto power over bet types.
'In-play' betting
16.25
As outlined in chapter 11, 'in-play' betting is currently permitted via
the phone or in person (e.g. at a TAB) but not online. However, Australian
residents are able to use overseas wagering providers to take part in online
'in-play' betting.
16.26
Betfair argued that a prohibition of 'in-play' betting would be
detrimental and noted that a recent UK review had identified no specific risks
posed by such betting to problem gambling:
In March 2009 the UK Gambling Commission conducted an
exhaustive review of in-play betting across Europe, where it has been used by
punters for a number of years. The
Commission concluded that in-play betting doesn’t require special regulatory
treatment – that is, treatment in isolation of other types of betting which
occurs before an event begins. Furthermore, the Commission found no evidence to
suggest that in-play betting posed a specific, identifiable risk to problem
gambling.
A blanket ban on in-play betting will merely exacerbate the
current situation as Australian residents will continue to wager with offshore
operators who are likely to continue ignore Australian laws in a similar vein
as they are presently ignoring the Interactive Gambling Act. The key
concern from a responsible gambling perspective is that Australian punters who
seek to bet offshore will not be afforded the protections relating to security
of customers’ funds and identities, problem gambling and sporting integrity
that can be offered by Australian regulated operators.[22]
16.27
However, FamilyVoice Australia argued that there were significant risks
to 'in-play' betting:
In-play betting is likely to induce problem gamblers caught
up in the excitement of a match from betting inappropriate amounts on the spur
of the moment.[23]
Committee majority view
16.28
'In-play' betting is currently permitted via the telephone and in person
and the committee majority does not support the bill's provision to restrict
forms of 'in-play' betting that are currently legal. In chapter 11, the
committee majority recommended that the current prohibition on the provision of
online 'in-play' betting should remain in place. When the IGA was introduced,
'in-play' betting online was restricted due to concerns about new technology
providing a platform for excessive betting 'in the heat of the moment' during a
sporting match. While some argued that this prohibition is anachronistic, the
risks associated with rapid 'in-play' betting at the touch of a button and its
attraction to young people remain of concern to the committee majority.
16.29
Given that the effects of the convergence of new technologies in this
area are not yet well understood, the committee majority would support the
government commissioning research on the risks and effects of online 'in-play'
betting as part of the current review of the IGA. The committee majority has
made a recommendation on this in chapter 11.
Schedule 3—Advertising
16.30
Schedule 3 of the bill amends the Broadcasting Act to prohibit
advertising of betting venues and online gambling sites during G classified
programs and all sport or sport related programs. The bill requires the
Australian Communications and Media Authority to ensure all commercial
television, commercial radio and subscription television broadcasting licence
holders adhere to these provisions.[24]
16.31
This schedule also prevents licence holders from broadcasting betting
odds where there is a commercial arrangement between the licensee and the
betting agency providing these odds.[25]
Views of submitters
16.32
Some submitters were strongly in favour of the amendments, arguing that
they would properly restrict the promotion of gambling to children and young
people. Betting agencies, however, were not supportive and argued that such
provisions could affect sponsorship and partnership agreements between gambling
providers and broadcasting licensees or sporting teams.
16.33
As discussed in detail in chapter 12, the government has announced that
it will work with sporting bodies and the betting industry to reduce the promotion
of live odds during sports coverage through amendments to their existing
industry codes. If satisfactory amendments are not in place by the end of June
2012, the government has stated that it will consider the need for legislation.
16.34
The Tasmanian Inter-Church Gambling Taskforce strongly supported these
amendments:
We believe that gambling services are a dangerous product and
their advertising should therefore be restricted to a context where they are
least likely to attract interest from vulnerable people, especially children,
who may not be fully aware of the risks involved. This means excluding such
advertising from all children’s viewing times, all G classified programs and
all sports related programs of interest to children.
The prohibition of broadcasting odds where there is a
commercial arrangement between the licensee and the betting agency concerned is
a wise precaution to prevent the broadcasting of what are, in effect, paid
advertisements masquerading as news, commentary or information.[26]
16.35
The Royal Australian and New Zealand College of Psychiatrists (RANZCP)
also praised the proposed restrictions on broadcasting of gambling advertising:
The RANZCP is fully supportive of these amendments, which are
in line with our previous submission calling for tighter regulations to monitor
the advertising of gambling to reduce the impact it can have on vulnerable groups
and problematic gamblers. Recommendations included that commentators not be
allowed to discuss or talk about any odds on offer at any point in time, and
that display of odds on television screens during broadcast should be limited.
The RANZCP is pleased that the proposed amendments to the Bill appear to
prohibit these activities.[27]
16.36
FamilyVoice Australia also strongly supported the amendments but noted
that, as far as possible, key terms should be defined in the primary
legislation:
Schedule 3 should be supported subject to it being amended to
provide definitions of each of the relevant terms, while also allowing
expansion of the definitions by regulation.[28]
16.37
The Senate Scrutiny of Bills committee also raised the matter of
definitions in the regulations:
Schedule 3, item 1, of the bill requires the ACMA to impose
certain conditions on commercial television broadcasting licences. The key
terms of the conditions that are to be imposed, are left to be defined in the
regulations. The explanatory memorandum does not address the reasons for this
approach.
The same issue arises in relation to items 2 and 3 of the
Schedule, which relate to conditions to be imposed on radio broadcasting
licences and subscription television broadcasting licences, respectively.
In general, it is preferable that important information is included
in primary legislation.[29]
16.38
The RGAC said that the proposed amendments could go further, with
penalties for breaches required:
Penalties are important to include in order to deter
potential breaches of this section. The lack of penalties in the Act has often
meant abiding by it is not always paramount to those who offer interactive
gambling services.
There is potential to broaden this section because
advertising has been recognised as a major inducement to gamble. Profits
indicate that online advertising is proving very successful for interactive
gambling providers and regulation in this area would be valuable. With a
dramatic increase in online use, including watching sport and other
entertainment online, it would be timely to introduce advertising restrictions
now.[30]
16.39
Betfair, however, rejected the proposed advertising restrictions,
arguing that they pre-empted work already underway between government and
industry:
On Friday 27 May 2011, the Federal Government announced that
it would take measures to reduce and control the promotion of live odds during
sports broadcasts. In first instance the Federal Government is permitting the
broadcasting industry a 12 month period to establish an industry code of
conduct to control this type of advertising. Betfair is committed to engaging
in this process to ensure that all of its advertising is presented in a
socially responsible manner.
On the basis of the above approach, which has been embraced
by a broad range of stakeholders, legislation should not be considered until
such time that the wagering and broadcasting industries have had an opportunity
to develop an appropriate framework for gambling advertising.[31]
16.40
COMPPS did not state outright its view on these amendments but noted the
potential for a decrease in sponsorship from gambling operators were they to
become law:
Senator BILYK: Do
you have concerns regarding the bill's proposal to prohibit advertising at
certain times and during certain programs? Is there any concern about the
potential to affect sponsorship and partnership agreements that your member
sports might have in place with betting agencies?
Mr Speed: The sports generally welcome the opportunity
to consult on advertising, sports betting advertising, in relation to their
matches and their teams. They will engage on that, as requested, over this
12-month period. There is the potential, if the regime for advertising were
changed significantly, for there to be a diminution in sponsorship, but I think
that is one of the factors that will be taken into account.[32]
16.41
Betfair also told the committee of its concerns about the proposed
advertising restrictions and their likely impact on sponsorship agreements:
Senator BILYK: Do you have any concerns about the [bill's]
proposal to prohibit advertising during certain times and programs?
Mr Twaits: Yes. Our submission deals with that and, as
I said, we are happy to cooperate with regulators and broadcasters et cetera to
find a workable solution, but I guess the point we would make is that the
wagering industry is already highly regulated. We think we represent the
high-water mark in acting responsibly with regard to harm minimisation and
integrity management. We do not see any reason for severe limitations on the
times or locations that we can advertise. I would point out that the effect of
the restrictions on—
Senator BILYK: Do you not think that you should not
advertise through kids' prime-time television, for example, or—
Mr Twaits:... To the extent that we would advertise
during the cricket, if it is a one-dayer starting at 10.30 in the morning I do
not think there should be any restrictions on that provided the nature of the
advertising is not designed for or likely to appeal to under-18s.
Senator BILYK: Do you think it has the potential to
affect sponsorship or partnership agreements that you might have in place?
Mr Twaits: Definitely, if we cannot advertise we would
not have sponsorship agreements in place or they would be severely limited.[33]
Exemption for the racing industry
16.42
The Australian Racing Board stated its broad support for the amendments
but emphasised the need for explicit exemptions for the racing industry. Its
submission argued that the restrictions on broadcasting of betting odds should
not apply to race betting odds, nor should restrictions on advertising of
betting venues apply to racecourses:
For example, for many years now the major racing carnivals
conducted in Melbourne and Sydney have been broadcast on commercial television.
It will be readily accepted that these broadcasts could not feasibly be made
excluding broadcasting of the betting odds relating to those race meetings. It
will also be understood that one or more of the betting agencies generating the
betting odds may have a commercial arrangement with the television broadcasting
licensee (either to place an advertisement or endorsement within or during a
race broadcast, or to advertise at some other time slot). What has been
described here has occurred for many years and is not of the same nature and
complexion as the recent developments involving betting odds being promoted in
cricket, football and other sport. The bill should not destroy these
opportunities for iconic Australian sporting events, such as the Melbourne Cup,
to be broadcast on commercial television.
...If the regulations defined 'betting venue' to include racecourses
then an advertisement encouraging people to attend a race meeting could not be
shown during any sports program or sports-related program. Preventing such advertising
taking place would not further the objectives of the bill.[34]
16.43
The Australian Racing Board also noted an inconsistency between the
Explanatory Memorandum and the bill itself:
The Explanatory Memorandum says that schedule 3:
“requires ACMA to enforce conditions to require commercial
television, radio and subscription television broadcasting licencees not to
broadcast betting odds where there is a commercial arrangement between
the licensee (i.e. presenter) to provide betting odds.” (our emphasis)
However, the drafting in items 1, 2 & 3 goes beyond this. For
example, item 1 says that the ACMA must impose a condition:
“that has the effect of requiring the licensee of a commercial
television broadcasting licence not to broadcast betting odds in relation to a
matter if there is a commercial arrangement between the licensee or an agent of
the licensee and the betting agency providing the betting odds”
This casts a wider net than is suggested by the Explanatory
Memorandum. A commercial arrangement to provide the betting odds is not
required. Instead it is enough that there is a commercial arrangement between
the broadcaster and the betting agency. On a plain reading this could be any
type of commercial arrangement; indeed it may be a commercial arrangement
between other divisions of the two parties and have no connection with betting.
This is not intended to suggest opposition to the bill’s
intended objective of winding back the recent trend of broadcasts of cricket,
football and other sporting fixture[s] becoming filled with exhortations to
gamble. However the drafting approach that the bill employs to achieve this
might be further considered.[35]
Committee view
16.44
Advertising of gambling services and products was a key issue raised
with the committee throughout the inquiry—see chapters nine and 12 for detailed
discussion. In relation to gambling on sport, much of the concern focused on
the broadcasting of live odds during sporting matches. However, the concern
went further to the amount of gambling advertising that children in particular
are exposed to during sporting matches and how this may affect their view of
sport.
16.45
In earlier chapters, the committee has already noted its concern about
the effects of gambling advertising, particularly on young people. In the
context of online advertisements, the committee heard how research has shown
that young people are particularly vulnerable to and are highly influenced by
the messages in gaming advertising. Researchers stressed the need to protect
children and adolescents from being exposed to such advertisements. The committee
considers that research findings about the susceptibility of youth to gambling
advertising are equally applicable to sports betting advertising. The committee
also heard of research to indicate that the earlier people start gambling, the
more likely they are to continue gambling, and the more they continue gambling,
the probability of developing gambling problems increases.
16.46
As already stated in chapter 12, the committee welcomes the government's
recent announcement to work with industry to reduce and control the promotion
of live odds. This is a step in the right direction and picks up on the
understandable degree of community concern about the infiltration of gambling
into sport and sports coverage.
16.47
However, the committee believes this does not go far enough and notes
that the undertaking to reduce live odds promotion by mid-2012 does not appear
to be a commitment to a total ban, is based on self-regulation by industry and
is not underpinned by legislation. The committee has recommended that there
should be a total ban on the promotion of live odds which should be enforced by
legislation.
Committee majority view
16.48
The committee believes that live odds are not the only area requiring
attention. It considers that the restrictions on the times for gambling
advertising as proposed in the bill are necessary to protect children from
viewing sport through the prism of gambling.[36]
However, the committee majority notes the need to address definitional issues
in Schedule 3 of the bill. The committee majority therefore supports the
general intent of the amendment to the Broadcasting Services Act 1992
proposed in the bill to prohibit advertising of betting venues and online
gambling sites during G classified programs, i.e. when children are likely to
be watching.
16.49
The committee majority believes that any sport and sport related
programs that are broadcast during periods when children are likely to be
viewing should not include any form of gambling advertising. The committee majority
therefore supports an amendment to the Broadcasting Services Act to prohibit
advertising of gambling during periods when children are likely to be watching.
In practice, this would still permit advertising of gambling during sport or
sport-related programs that are broadcast during late night viewing times (i.e.
when children are not likely to be watching). Additional comments from Senator
Xenophon on this schedule of the bill follow this report.
Recommendation 19
16.50 The committee majority recommends that the Broadcasting Services Act
1992 be amended to prohibit gambling advertising during times when children
are likely to be watching.
Schedule 4—Obtaining a financial advantage by deception, in relation to a
code of sport
16.51
Schedule 4 of the bill inserts a provision into the Criminal Code,
making it an offence to participate in match-fixing, establishing a maximum
penalty of 10 years imprisonment and/or 10, 000 penalty units. This
penalty would apply to players, referees, persons associated with players,
match officials and persons associated with a code of sport who attempt to fix
a match by deception.[37]
16.52
Deception would be defined as:
- conduct by a person that contrives the outcome of a sporting
match or the occurrence of micro-event during a sporting match;
- deliberate underperformance by a player during a sporting match
that achieves a particular result in the sporting match;
- contriving the withdrawal of a player during a sporting match to
achieve a particular result in the sporting match;
-
use by a person of confidential information in relation to a code
of sport, to which the person has access because of that person's association
with the code of sport, before that information is publicly available;
- making a deliberately incorrect refereeing or like decision
during a sporting match to influence the outcome of the sporting match;
- deliberate interference before a sporting match with the
equipment or playing surface to be used during the sporting match;
- offering a bribe or making a threat, or engaging in any other
coercive behaviour, against a person to achieve a particular result in a
sporting match;
- any other conduct prescribed by regulations.[38]
Views of submitters
16.53
While the broad intent of this amendment was generally supported, much
of the commentary on the bill, particularly from COMPPS and wagering providers,
noted current national work underway on a national match-fixing policy as well
as recent work by the NSW Law Reform Commission (LRC) in this area. This work
is discussed in detail in chapter 13.
16.54
Mr Malcolm Speed, Executive Director of COMPPS, explained that the bill
cut across work being undertaken by Sports Ministers and Attorneys-General on
nationally consistent legislation:
Over the last 12 months, and perhaps a little longer for the
coalition, we have had our working party in place and we have been working
through these issues. We have had great support from government. The Minister
for Sport, Senator Arbib, has taken a leading role in this. The Australian
Olympic Committee has been very supportive and has taken a similar view. The
state sports ministers and attorneys-general have all come into this issue and
are enthusiastically endorsing recommendations for legislation. We are looking
at civil legislation, which would be a duplication of the Victorian
legislation. Our view is that we would like to finish that process and that the
legislation that is proposed in the bill is premature. Our preference would be
to continue the discussions that are underway with the federal government and
the states before we achieve legislation.[39]
16.55
Betfair's submission also noted its support for a maximum 10 year
penalty proposed by the NSW LRC and stated that this framework provided a 'much
stronger and more coordinated framework for reform' than that proposed in the
bill:
The NSW LRC position should be preferred because:
(a) in order to trigger an offence under the Draft Bill, the
participant must both engage in the “deception” and themself obtain the
financial advantage, whereas the NSW LRC draft provision extends to third
parties who gain a financial advantage as a result of the deceptive conduct.
(b) the draft provision prescribes certain conduct that
constitutes deception in the relevant sense but does not cover cheating or
corruption that may occur for reasons other than gambling, which is effectively
covered in the NSW LRC draft provision.
(c) the wording in the proposed s135A.3 is difficult to
follow and should be simplified by stating that person is guilty of an offence
if:
a. the person obtains a financial advantage from any other
person; and
b. the deception takes place in, or the financial advantage
is obtained in, a Territory.
(d) as appears to be tacitly accepted by the drafter of the
provision (see the existence of a “Constitutional basis for Division” in
s135A.2 and the clumsy wording in s135A.3), there exists significant doubt over
the constitutional basis upon which the Federal Parliament could enact these
provisions.
For these reasons, the Committee should advocate that each of
the States and Territories enact nationally consistent legislation that mirrors
the Victorian Sports Betting Act and the NSW LRC draft cheating provision.[40]
16.56
Netball Australia also supported existing work underway at the national
level over the approach proposed in the bill:
Netball Australia acknowledges the recommendations in the NSW
Law Reform Commission’s report into Cheating at Gambling, March 2011 and draws
particular reference to the need for a nationally consistent approach, specific
statutory cheating offence and penalties in relation to sporting and other
events.
Accordingly, Netball Australia welcomed the announcement of
10 June 2011 by the Sport and Recreation Minister’s Council of a National Policy
on Match-Fixing in Sport to provide the foundation for all Australian
governments to work with sports and betting companies to deter and deal with
corruption in sport.
A critical aspect of the National Policy is the agreement to
pursue nationally consistent legislative arrangements. It is preferable that
this Legislation is Federal, specific to sport, creating a criminal offence of “cheating in connection with sports wagering”.[41]
16.57
The Tasmanian Government also commented that the amendment pre-empted
the National Policy on Match-Fixing in Sport.[42]
16.58
The Australian Racing Board stated support for the amendments in the
bill but suggested that the term 'sporting match' should be defined in the
regulations to include a horse race:
Racing faces at least the same level of risk of its integrity
being undermined for gambling-related purposes as other sports. Accordingly the
protection that is given to sport by this new criminal offence should apply
also to racing events.[43]
16.59
The Senate Scrutiny of Bills Committee also pointed out that it was
preferable for certain definitions to be included in the primary legislation,
not left to the regulations:
Schedule 4, item 1 would insert proposed section 135A.3 in
the Criminal Code Act. This provision makes it an offence for a person
to obtain financial advantage in relation to a ‘code of sport’ by deception.
The meaning of ‘code of sport’ is to be determined by the regulations and the
meaning of deception (a central element of the offence) is defined to include
‘any other conduct prescribed in the regulations’ (see proposed section
135A.1). The penalty for the offence is imprisonment for 10 years or 10000
penalty units or both. Unfortunately the explanatory memorandum does not
address this issue. As noted above, in general it is preferable that important
information is included in primary legislation.[44]
Other issues in relation to
Schedule 4
16.60
A submission from Ms Juliette Overland of the University of Sydney drew
attention to the need for a number of clarifications in the drafting of the
amendment to the Criminal Code. Ms Overland raised three principal questions:
(i) Why has liability been limited to people who have an “association with the code of sport”?
(ii) What is meant by the term “confidential information”?
What is meant by the term “publicly available”?
(iii) Why is there no requirement that the information be “material”?[45]
16.61
Ms Overland's area of research interest and expertise is insider trading
and her submission to this inquiry focused on the proposed definition of the
term 'deception' in the bill and its similarities to insider trading offences
under the Corporations Act:
The Explanatory Memorandum to the draft Bill states that
deception is considered, amongst other things, to be “use by a person of
confidential information in relation to a code of sport, to which the person
has access because of that person's association with the code of sport, before
that information is publicly available.” This concept, which essentially
amounts to "insider gambling", is similar, but not identical, to the
prohibition on insider trading which applies in relation to certain financial
products under the Corporations Act. The Corporations Act prohibits any person
in possession of information which they know, or ought reasonably to know, is
price-sensitive non-public information from trading, or procuring trading, in
relevant financial products.[46]
16.62
She suggested that liability should not only be limited to those who
have 'an association with the code of sport', but to anyone who possesses
'inside information':
It is not explained in the Explanatory Memorandum or
elsewhere why liability should be limited to people who have an “association
with the code of sport.”
This is in contrast to the position under ordinary insider
trading laws. The prohibition on insider trading under the Corporations Act
applies equally to all persons who possess inside information, so that there is
only a requirement for what [is] known as an “information connection” rather
than a “person connection.” All who possess information which they know, or
ought reasonably to know, is inside information are prohibited from trading in
relevant financial products, regardless of their status, relationships or how
they came to possess the information.
If a person possesses “confidential information” in relation
to a code of sport, which they exploit for their own purposes (for example, by
using the information when placing bets on a relevant sporting event) why
should it matter if they have any particular association with that code of
sport? Additionally, would the proposed offence be intended to apply to people
who have no connection with the relevant code of sport but who acquire
information from others – for example, if a person with an association to a
code of sport passes information onto their spouse, or friend, or other
unrelated parties, who then use the information to place bets on a sporting event,
is it intended that those person would not have any liability under the draft
"insider gambling" offence? Under the current drafting, it would seem
that no such liability would exist. It is suggested that the most important
issue should be preventing the misuse of information, rather than focusing on
the role or position of the person who possesses that information.[47]
16.63
Ms Overland also argued that the terms 'confidential information' and
'publicly available' need to be defined clearly in the bill, as they are in the
Corporations Act:
Whilst at times, the meaning of these terms has been
contentious and the subject of significant judicial consideration in a number
of insider trading cases, the inclusion of
definitions at least provides some scope and context for the relevant offence.
It is recommended that consideration be given to including definitions for the “confidential information” and “publicly available” for the offence of
"insider gambling" as well.
Issues which need to be considered before appropriate
definitions can be drafted:
(i) Why is an obligation of confidence required? If the
information is not publicly available, is it necessary that the information
also have a requirement of confidentiality?
(ii) Who needs to have knowledge of or access to the
information before it would be considered to be publicly available? Does it
need to be known or available to the general public, or only those who have a
connection with the relevant code of sport?[48]
16.64
Ms Overland also suggested there should be a requirement in the bill
that information should be 'material':
Why should an offence be created if the information is
unlikely to be sensitive in nature? The offence of insider trading only exists
in respect of information which is likely to have a material effect on the
price or value of relevant financial products.[49]
Committee majority view
16.65
The committee majority supports the intent of the amendments relating to
fraudulent conduct in a code of sport, as did most submitters. However, as
noted in chapter 13, the committee majority welcomes the cooperative work being
done at a national level to advance the new National Policy on Match-Fixing. It
also acknowledges the comprehensive work that has been done in both NSW and
Victoria to ensure regulation keeps pace with developments in the modern sports
betting environment. The committee majority is supportive of the current work
underway by Sports Ministers and Attorneys-General to pursue nationally
consistent legislative measures to curb the threat of match-fixing in Australian
sport.
Conclusion
16.66
The committee majority has formed the view that the bill should not be
passed.
16.67
The committee majority does not support the bill's amendments to the IGA
(covered in chapter 15) to make online transactions with international gambling
websites voidable by consumers. Nor does it support the alternative model
proposed during the committee's public hearing to establish and maintain a
'blacklist' of merchant identification numbers to which financial institutions
would be required to block transactions.
16.68
The committee majority is particularly concerned about the practice of
interactive and online gambling services offering inducements to gamble.
Therefore, the committee majority supports the intent of the amendment to the
IGA to prohibit inducements to gamble. However, the committee majority has recommended
that the bill's amendments to the IGA in relation to inducements not be
considered until the current review of the IGA has been completed. This would
allow them to be considered alongside any other amendments to the Act proposed
by the government that arise from the review.
16.69
In this chapter, the committee majority does not support prohibiting the
offering of certain bet types, including betting on losing outcomes, 'in-play' and
exotic betting as proposed in Clause 3 of the bill. The committee majority
believes that the risks around betting on losing outcomes can be adequately
mitigated by existing regulation around the operation of betting exchanges. As
noted in earlier chapters, the committee majority takes a precautionary
approach to 'in-play' (chapter 11) and exotic betting (chapter 14). The
committee majority believes that the current arrangements for 'in-play' betting
should remain in place. However, the committee majority supports further
research on the risks of 'in-play' betting online. Until such time as a
national independent research institute on gambling can undertake this work, the
committee majority has recommended that such research be commissioned as part
of the current review of the Interactive Gambling Act. On exotic betting, the committee
majority considers that further research on the possible risks of this bet type
should also be commissioned. Again, until such time as a national independent
research institute on gambling can undertake this work, it should be
commissioned under the existing work by Sports Ministers on the National Policy
on Match-Fixing in Sport.
16.70
Throughout the inquiry, the committee heard how research has shown that
children and young people are particularly vulnerable to and are highly
influenced by the messages in gambling advertising. The committee believes that
any sport or sport related programs that are broadcast during periods when
children are likely to be viewing should not include any form of gambling
advertising. The committee majority therefore supports an amendment to the
Broadcasting Services Act to prohibit advertising of gambling during periods
when children are likely to be watching (whether programs are sports related or
not).
16.71
While the committee welcomes the commitment by government and industry
to reduce and control the promotion of live odds during sports coverage, it
believes that more must be done in this area. As noted in chapter 12, the
committee believes that the government should legislate a total ban on live
odds promotion at venues and during broadcasts, including during pre-match
coverage. However, the committee majority notes the need to provide an
exemption for the racing industry.
16.72
Finally, while the policy intent of the match-fixing amendment in this bill
is supported in-principle, the committee majority considers that work already
underway by Sports Ministers on the National Policy on Match-Fixing in Sport is
the most suitable forum in which to pursue reform.
Recommendation 20
16.73 The committee majority recommends that the Interactive Gambling and
Broadcasting Amendment (Online Transactions and Other Measures) Bill 2011 not
be passed.
Mr Andrew Wilkie MP
Chair
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