Chapter 1Introduction
1.1On 14 September 2023, the Senate referred the Interactive Gambling Amendment (Credit and Other Measures) Bill 2023 (the bill) to the Environment and Communications Legislation Committee (the committee) for inquiry and report by 12 October 2023.
1.2Online and over-the-phone gambling services are regulated by the Interactive Gambling Act 2001 (the IGA Act). The IGA Act prohibits certain gambling services, and regulates the conditions under which other services can be offered. It also makes it illegal for gambling service providers to engage in certain commercial activities, such as providing credit to customers.
1.3The bill seeks to amend the IGA Act to prohibit the acceptance of credit cards, credit-related products and digital currency as payment methods for interactive wagering services. The bill seeks to create a new criminal offence and civil penalty provision for contravention of the ban, and to provide enhanced enforcement powers to the Australian Communications and Media Authority (ACMA).
1.4The Senate Selection of Bills Committee reported that the bill was referred to the committee to 'explore [the] scope and impact of [the bill] and the potential to include other harmful interactive wagering services like, for example, lotteries'.
Conduct of the inquiry
1.5Details of the inquiry were advertised on the committee's website, including a call for submissions by 22 September 2023. The committee wrote directly to various stakeholders to invite them to make a submission.
1.6The committee received 11 submissions, which are listed at Appendix 1 and are available on the committee's website. The committee agreed to conduct the inquiry on the written evidence and did not hold a public hearing.
Acknowledgements
1.7The committee thanks the organisations and individuals that made submissions, especially in light of the inquiry's short timeframe.
Financial impact statement
1.8According to the Explanatory Memorandum (EM), the bill will not have a financial impact on the Australian Government budget.
Consultation
1.9In August 2023, the Department of Infrastructure, Transport, Regional Development, Communications and the Arts undertook consultation on the exposure draft of the bill with the following groups of stakeholders: banking and payment providers; wagering and lottery operators; harm reduction advocates; academics; and Australian Government agencies. The EM states that stakeholders widely supported the policy objective of the bill.
Background of the bill
1.10In response to the increasing availability of internet gambling, the IGA Act was passed in 2001 to establish a regulatory framework for online and over-the-phone gambling services. It prohibits the provision of some interactive gambling services to customers in Australia, including in-play sports betting, online casinos, and sports betting services which do not hold an Australian licence. Among other restrictions, providers of legal online gambling services are prohibited from promoting or offering credit to their customers.
1.11ACMA is responsible for investigating contraventions of the IGA Act, as well as playing a role in the establishment of industry codes and standards.
1.12The bill seeks to implement the findings of the November 2021 inquiry of the Parliamentary Joint Committee on Corporations and Financial Services into the Regulation of the use of financial services such as credit cards and digital wallets for online gambling in Australia (the PJC inquiry). The PJC inquiry concluded that it was a 'glaring omission in the current regulatory system' that the IGA Act allows independently issued credit cards to be used to purchase interactive gambling services. States and territories banned the use of credit cards for in‑person gambling services in the early 2000s, with exemptions for the purchase of lottery tickets at newsagents or lotto venues.
1.13The PJC inquiry report recommended that the Australian Government prohibit interactive gambling service providers from accepting payment via credit card, including digital wallets, on the condition that this prohibition has no negative consequences for lotteries. In its response, the government supported these recommendations, and committed to legislating them into effect.
Key Provisions
Preventing the purchase of online wagering services on credit
1.14The bill seeks to prohibit providers of online wagering services from accepting payment via proscribed methods, in particular using a credit card, digital wallet, or digital currency.
1.15As defined in the IGA Act, 'wagering services' includes services which facilitate the placing, making, receiving or acceptance of bets. As such, lotteries (including keno‑type lotteries) and games of mixed skill and chance are excluded from the definition of 'wagering services', and therefore are exempt from the prohibition.
1.16The methods of payment which online wagering service providers would be prohibited from accepting are:
a credit card;
an account, service or facility in which payment is made from a credit card linked to an account, service or facility (otherwise known as digital wallets);
digital currency; or
a method of a kind determined by the Minister by legislative instrument.
1.17The bill seeks to empower the Minister to nominate additional payment methods for prohibition via disallowable instrument so that the government can respond to technological developments which may enable circumvention the prohibition.
1.18The bill would establish a new criminal offence for intentionally providing a wagering service and accepting any of the payment methods described above in connection with the service. The customer or prospective customer of such a service must be physically present in Australia for the prospective law to apply.
1.19The penalty for the new criminal offence would be 500 penalty units.
1.20A civil penalty would also be imposed by the bill. The conduct which attracts this penalty is identical to the criminal offence described above, with the exception that it does not include a requirement that the relevant wagering service is provided intentionally.
1.21The civil penalty would be 750 penalty units. The ACMA would also be empowered to issue a formal warning, infringement notice, or injunction to a person who contravenes the civil prohibition.
1.22The EM argues that the severity of these civil and criminal penalties reflects the seriousness of the social harms associated with the use of credit to finance problem gambling, which it states can lead to 'financial distress, unemployment and relationship breakdown'.
1.23The bill seeks to extend two 'due diligence' defences to the criminal offence and civil penalty described above. For the respective defences to succeed, the person seeking to rely on them must prove that they:
did not know, and could not, with reasonable diligence, have ascertained that the customer, or prospective customer, was physically present in Australia; or
did not know, and could not, with reasonable diligence, have ascertained that the customer, or prospective customer, was making a payment with one of the payment methods to which the prohibition applies.
Defining credit and digital currency
1.24The PJC inquiry described several types of credit. In addition to credit cards, these included: digital wallets, which allow a customer to load a virtual credit card or currency into an account to make purchases; Buy Now Pay Later (BNPL), noting that these services had not been offered or used in the gambling industry at the date of reporting; and pre-paid travel and entertainment cards and vouchers, which link to charge accounts which set a billing period within which payment is due.
1.25The EM clarifies that digital wallets are a prohibited payment method; however, the status of BNPL and travel and entertainment cards and vouchers in relation to the new offences is not clarified. The application of the new penalties the bill seeks to establish to pre-paid vouchers and cards is discussed in Chapter 2.
1.26The bill would insert an exhaustive definition of 'digital currency' into the IGA Act, as one of the payment methods which the bill seeks to prohibit gambling service providers from accepting. According to the EM, digital currency denotes digital units of value which meet certain criteria, such as:
… the requirement [of] being generally available to members of the public without substantial restrictions on their use as consideration and not being denominated in any country's currency; or denominated in a currency that is not issued by an Australian government agency or a foreign government agency.
1.27The EM explains that digital currencies, such as cryptocurrency, could be purchased on credit and then used to pay for online wagering services, facilitating circumvention of the prohibition.
Enforcement of civil penalties under the IGA Act
1.28The bill seeks to put in place a framework for the ACMA to accept enforceable undertakings from individuals in relation to any of the IGA Act's civil penalty provisions, including the proposed civil prohibition on accepting credit for the purchase of online wagering services. An enforceable undertaking is a legally binding commitment given by a person or entity in written form to act or refrain from acting in a particular way. The ACMA would be enabled to publish undertakings made under the IGA Act.
1.29According to the EM, enforceable undertakings made under the IGA Act could involve 'the appointment of an independent consultant or auditor to review a provider's systems, processes and procedures (including training procedures) and provide a report with recommendations for improvement'.
1.30To address instances where the ACMA reasonably believes that a person has contravened, or is contravening, a civil penalty provision of the IGA Act, the bill seeks to empower the ACMA to give such a person a written direction. Such a direction would require that person to take a specified action directed towards ensuring that the provider does not contravene the provision, or is unlikely to contravene the provision, in the future.
1.31The bill seeks to establish a criminal offence and civil penalty for contravention of a direction. 50 penalty units would be imposed for contravention of the criminal offence, and the civil penalty would amount to 75 penalty units.
1.32Contravention of a written direction would also constitute a separate offence, as a means of deterring continuing contraventions of the original written direction. For each day that the conduct which constitutes contravention is continued, a separate and continuing offence/contravention will apply. The maximum penalty that can be imposed for each day of a continuing offence/contravention (i.e. where the conduct continued for more than one day) is 10 per cent of the maximum penalty that can be imposed for the principal offence/contravention.
Commencement
1.33The proposed provisions of the bill which prohibit online wagering service providers accepting credit and digital currency for the purchase of gambling service will commence six months after the Act receives Royal Assent. According to the EM, this will provide gambling service providers time to adjust their practices to ensure they do not contravene the new civil and criminal penalties proposed by the bill.
1.34The enforcement provisions proposed by the bill would commence one day after the Act receives Royal Assent, giving the ACMA the power to impose enforceable undertakings and remedial directions in relation to breaches of the IGA Act's civil penalty provisions. The ACMA will have the same powers to enforce the prohibition on the acceptance of credit or digital currency when it comes into effect six months after Royal Assent.
Review
1.35The bill provides for a review of the proposed provisions, once enacted. As the EM explains:
Given the rapid development of payment option technology, it is important to have a clear assessment of whether new products might be used to circumvent the prohibition on the use of credit cards for online wagering.
1.36The review must take place as soon as practicable after the conclusion of a two‑year period following commencement of the relevant provisions and be completed within six months of that date. A written report must be given to the Minister, who after receiving it, must table it in each Chamber of Parliament within 15sitting days.
Human rights compatibility
1.37The Statement of Compatibility with Human Rights considers the compatibility of the bill with human rights as it applies to the following rights recognised under the International Covenant on Civil and Political Rights (ICCPR):
the right to health; and
the right to a fair and public trial or hearing, right to a presumption of innocence, and minimum guarantees in criminal proceedings.
1.38According to the Statement, the bill would promote the right to health by mitigating the physical and mental harms caused by online wagering services, including for individuals who meet the clinical criteria of Gambling Disorder.
1.39The Statement also argued that rights recognised in relation to judicial proceedings would be engaged, but not limited, by the new civil and criminal penalties the bill seeks to establish. While the new criminal offence involves a reversal of the evidential burden where a defendant wishes to rely on either of the two 'due diligence' defences, this is deemed appropriate on the basis that the defendant is in the best position to adduce supporting evidence. As the civil penalty orders which the bill would seek to empower the ACMA to issue would make clear to the relevant person that they have the right to have the matter dealt with in court, and injunctions under these orders can only be granted by the court, the right to a fair hearing is also not limited.
1.40For these reasons, the bill is considered to be compatible with human rights.