Minority report by Democrats Senators
Senator Stott
Despoja
1.1 The
Australian Democrats do not support the recommendation of this Report of the
Senate Environment, Communications, Information Technology and the Arts
Legislation Committee to proceed with a retrospective 12 month moratorium on
Australian interactive gambling licences and services as proposed in the
Interactive Gambling (Moratorium) Bill 2000.
1.2 The
Australian Democrats maintain the issues of technical feasibility of banning
interactive gambling and the effective protection of Australians from problem
gambling should be the primary considerations and criteria for assessing the
appropriateness of the proposed moratorium.
2. Banning Interactive Gambling
2.1 The
Explanatory Memorandum indicates that the main objective of the Bill is to
limit the expansion of interactive gambling in Australia over the next 12
months. This will assist in minimising the level of problem gambling on the
Internet, thereby providing the Government with some breathing space to
consider in more detail the feasibility and consequences of banning Internet
gambling.
2.2 The
Majority report postulates that, as Australian gamblers will have access to a
local interactive industry fixed for 12 months at 19 May 2000, levels of uptake
of interactive gambling services and therefore problem gambling generated by
interactive gambling could plateau simultaneously.[1]
2.3 It
is unsound to assume a direct relationship between the number of online
gambling sites and the level of activity or number of users on these sites. It
could be argued that the media coverage surrounding the uncertain retrospective
moratorium and the general increasing usage of the Internet by Australians has
led to a greater awareness of interactive gaming services and ability to access
domestic and overseas sites.
2.4 Therefore,
assuming that there is a relationship in turn between interactive gambling and
problem gambling, the risk of problem gambling of could increase from May 19
2000 to May 19 2001 independent of the proposed moratorium.
3. International developments
3.1 The
Chair’s report recognises that the expansion of the offshore industry in
‘reputable jurisdictions’ will be limited over the next 12 months.[2]
Such limitations will significantly reduce the level of choice for online
gamblers and will reduce the standard of gambling service and protection
available to Australian online gamblers.
The Australian Democrats
conclude that a moratorium to investigate the feasibility of a ban on
interactive gambling services will not necessarily stem or decrease problem
gambling in Australia.
4. State
Cooperation
4.1 It
has been suggested and noted in the Chair’s Report that States and Territories
are differing in their approach to addressing problem gambling. This assertion
is in contradiction to evidence that approximately 95% of State and Territory
licensing requirements for online gambling services is corresponding.
4.2 The
Explanatory Memorandum of the Bill suggests that there is currently a
significant disparity between the State and Territory responses to problem
gambling on the Internet. The Explanatory Memorandum cites the differing
responses of jurisdictions to the May 19 announcement as evidence of this,
contrasting jurisdictions which supported the proposal with those which
continued to issue new interactive gambling licences.[3]
4.3 The
Australian Democrats recognise that there has been different responses
by the States and Territories to the Government’s non-consultative announcement
of a twelve month retrospective moratorium on interactive licences and services
at the May meeting of the Ministerial Council for Corporations.
4.4 The
Australian Democrats also recognise that the States and Territories were acting
in response to a regulatory issue of the interactive gambling industry not
‘problem gambling on the Internet’ as stated at 1.18 of the Chair’s report.
4.5 The
Australian Democrats express concern regarding the lack of definition between
interactive gambling and problem online gambling and the interchangeable use of
these two terms in turn in the Explanatory Memorandum of the Bill and the
Chair’s Report. It must be acknowledged that not all online gambling is
problematic or pathological gambling.
5. Harm
Minimisation
5.1 The
Australian Democrats support the assertion of the Chair’s report that “Internet
technology allows for the implementation of (harm minimisation)...regulatory
measures and that governments should make them a part of licensing
arrangements”.[4]
5.2 The
Australian Democrats maintain and strongly endorse the recognition in the
Chair’s report of the strength of Internet technologies to provide new and
greater means of player protection,[5]
and the evidence Mr Coroneos of the Internet Industry Association, submitted to
the Committee highlighting:
...the
strengths of the Internet. Do not look at the issue as simply access to poker
machines 24 hours a day; look at the extent to which the medium itself can
provide {harm minimisation policies}. Structure in your licence requirements
to stipulate who may access your service and upon what conditions and deal with
it that way. We think that way you address the social policy concerns, which
we also share, but you do not do it in a way that has these unintended and
adverse impacts on the rest of the Internet industry.[6]
6. Intellectual property
6.1 Software
requirements for the Australian online gambling industry place it at the
forefront of online research and development in areas including:
- Artificial intelligence
- Security
- 3-D modelling and financial transaction processing.[7]
6.2 The
Australian Democrats recognise the world standard expertise and potential
intellectual property products stemming from such valuable research and
development.
6.3 A
moratorium and/or ban of interactive gambling services in Australia would at
the very least hinder and may prevent business support of this highly
profitable technology and Australia’s capacity to develop and maintain
intellectual property in this area.
7. State competitiveness
7.1 It
has been suggested that the competitive relationship between the States and
Territories regarding gambling revenue tax bases would undermine a national
cooperative regulatory framework.
7.2 The
State and Territory competition for market share can instead be harnessed as a
tool to promote a stringent world’s best practice regulatory system. States
and Territories are in competition for domestic online gamblers and similarly
for patronage from overseas markets. The potential revenue from overseas
markets is greater and provides greater potential for cooperative industry
growth based on strong regulatory practice than differentiation between States
and Territories at a domestic level.
7.3 It is recognised that a national certification is
a greater market advantage than individual standards from Australian States and
Territories. Overseas markets will more readily identify with one benchmark
Australian standard rather than differing competing State and Territory
standards.
7.4 The
Australian Democrats maintain that the market advantage of a highly rigorous
national standard for all Australian online gambling service providers is a
highly attractive incentive for States and Territories to pursue a national
cooperative stringent regulatory system. The potential of such a market share
is greater than that provided by lowest common denominator practice.
7.5 If
Australian States and Territories were to ignore consumer demand for secure
player protected services and to pursue the lowest common denominator online
gambling licensing and service provision, or even continue current standards of
practice, overseas jurisdictions will always be able to provide a less
regulated option.
7.6 The
Provision of a high nationally consistent regulatory starting point in
conjunction with a national education campaign on the standards and harm
minimisation strategies (consistent with the harm minimisation recommendations
of the Senate Select Committee on Information Technologies in NetBets[8])
creates a competitive pressure for domestic online gambling
services. Service providers will be compelled to provide domestic and
international online gamblers with a service that not only meets the worlds
best practice Australian Standard, but exceeds that provided by other States
and Territories and services providers within these jurisdictions.
The Australian Democrats
recommend promotion of a cooperative regulatory framework between the States
and Territories which stipulates a high regulatory starting in conjunction with
a national education campaign.
8. The real issue: problem gambling
8.1 The
Australian Democrats recognise the wide community concern and hurt that problem
gambling creates.
8.2 Problem
gambling is a wide reaching issue which is further reaching than the issue of
Internet gambling. The Australian Democrats recognise that an Australian
Research Council funded national survey of gambling related problems in
Australia estimated a 1.3% prevalence of ‘probably pathological gambling’
domestically, which translates to 15.6% of regular once a week or more video
gaming machine players and 17% of regular betting players.[9]
8.3 Demographic risk factors of problem gambling
include:
- Male
- Under 30 years of age
- Predominantly TAB, on-course betting and video gaming machine useage.[10]
8.4 It
is currently estimated that 2 300 Australians currently utilise the Internet to
gamble, [11]
despite 2.3 million Australian households having access to the Internet in May
2000.[12]
8.5 The
Australian Democrats, therefore, do not support the Chair’s Report claim that a
moratorium on Australian online licence and services will provide an
opportunity to carry out timely analysis and consideration of problem gambling.[13]
8.6 Problem
gambling is a highly complex and multifaceted social phenomenon which cannot
begin to be addressed by an interim moratorium on interactive gambling.
8.7 The
Australian Democrats strongly support the use of gambling revenue to research
and address the issue of problem gambling in Australia and independent
projective research of the impact to which Internet gambling may have on the
phenomenon.
The Australian Democrats
maintain that a multifaceted harm minimisation regulatory strategy is the most
effective strategy against problem gambling in Australia.
Recommendations
The Australian Democrats
therefore maintain:
- support for a multi-facetted harm minimisation report as recommended
in Netbets.[14]
- that a ban on interactive gambling services will not necessarily
protect Australians from problem gambling.
The Australian Democrats
recommend:
- A three month non-retrospective moratorium on the issuing of
Australian interactive gambling licences for the express purpose of
facilitating the States and Territories in establishing a national regulatory
system stipulating a strong world’s best practice minimum standard for all
Australian licensed online gambling services.
- The licensing standards of the national regulatory system be
effective from the end of the three month period.
- The national regulatory system will apply to operations where:
- all services provided in the course of carrying on a business in
Australia;
- the central management and control of the service is in Australia;
- or the service is provided thorough an agent in Australia (in keeping
with definitions under Interactive Gambling (Moratorium) Bill 2000).
- The moratorium applied to both wagering and gaming services.
The Australian Democrats recognise the distinctions between wagering and
gaming, however, support a moratorium to both services to allow establishment
of a national regulatory standard which can be interchangeably applied and
recognised by domestic and international Internet gamblers.
- The moratorium apply to issuing of all new interactive gambling
licences from the commencement of the moratorium and existing licences upon
renewal.
The Australian Democrats
recognise that a moratorium on all new licences and services in Australia will
not stem the ability of Australians to gamble online and approach the issue of
interactive gambling from a position of effective address for problem gambling.
The Democrats, therefore,
consider a halt to Internet gaming licences necessary to establish a standard
cooperative national regulatory regime.
All Australian interactive
gambling services will not be curtailed under the Governments Interactive
Gambling (Moratorium) Bill 2000 and will provide an artificial market advantage
to established Australian Internet gambling operators for the period of the
moratorium and post-moratorium.
Australian operators which
currently hold a licence and are under operation, or have been granted a State
or Territory licence will be able to continue operation through the Democrats
proposed licence moratorium. However, this will not provide a ‘free for all’ for Internet gaming services.
The cost of adhering to the
established national standard for operation in domestic and international
jurisdictions will provide a significant incentive for operators to establish
operations in the interim in line with world’s best practice and harm
minimisation processes as recommended in NetBets.
The Australian Democrats have
been advised that many currently licensed Australian interactive gambling
operators are willing to adopt the National Standards before the requirement to
upon licence reapplication. Even without this cooperation and recognition of
the competitive advantage the standards will provide, all Australian online
gaming services would be operating under the Australian standard within a
twelve-month time period with licence renewal processes.
- The National Regulatory Standards be developed and implemented with
harm minimisation and player protection measures as the primary focus.
- A public education campaign be a core component of the National
Regulatory System for Interactive Gambling highlighting the requirements for
online gambling operators in Australian and harm minimisation.
The Australian Democrats recommend that an appropriate percentage of
revenue from Interactive Gambling be allocated to a centralised fund for the
establishment and maintenance of the public education arm of the system.
_____________________
Senator N. Stott Despoja
(AD, SA)
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