Referral
1.1
On 18 March 2021, the Senate referred the Interactive Gambling Amendment (Prohibition on Credit Card Use) Bill 2020 (the bill) to the Environment and Communications Legislation Committee (the committee) for inquiry and report by 30 July 2021. On 23 June 2021, the Senate granted the committee an extension of time to report to 8 October 2021.
1.2
The referral followed a recommendation from the Selection of Bills Committee which referred the bill in order to seek feedback from stakeholders.
Conduct of the inquiry
1.3
Details of the inquiry were advertised on the committee's webpage. The committee wrote to a range of stakeholders inviting them to submit by 29 April 2021. The committee received and published 21 submissions which are listed at Appendix 1 and available on the committee's website. The committee held one public hearing via videoconference on Friday, 10 September 2021. The list of witnesses who appeared at the hearing is provided at Appendix 2.
Acknowledgement
1.4
The committee thanks submitters and witnesses for their participation in the inquiry.
Note on references
1.5
In this report, references to Committee Hansard are to the proof transcript available on the committee's website. Page numbers may vary between proof and official transcripts.
Structure of this report
1.6
This report consists of two chapters:
This chapter outlines the background and key provisions of the bill and provides administrative details relating to the inquiry; and
Chapter 2 examines the key issues raised in evidence and provides the committee's view.
Purpose of the bill
1.7
The private senator's bill was introduced into the Senate on 25 August 2020 by Senator Stirling Griff. The bill would amend the Interactive Gambling Act 2001 (Interactive Gambling Act) to implement a ban on the use of credit cards for betting using certain regulated interactive gambling services. When introducing the bill, Senator Griff explained that the bill:
…aims to minimise the scope for problem gambling among Australians by [banning] the use of credit cards for online betting through certain regulated interactive gambling services. The growth of interactive gambling in Australia has seen many consumers moving away from traditional gambling products to betting online using smartphones, tablets and other digital devices. Australia's high rate of gambling expenditure and adoption of digital technologies makes it imperative that there is strong legislation to minimise and prevent gambling harm.
The Bill prevents gambling operators from accepting payments by credit card, either directly or through other payment methods that rely on an underlying credit card.
1.8
Senator Griff referred to the harms created by gambling and the particular risks associated with using credit cards for gambling purposes:
The harms associated with gambling are well known – they can have an impact on social relationships, family relationships, work performance and physical and mental health. This is in addition to financial stress, loss of creditworthiness, chronic high interest debt, homelessness, crime and suicide.
People who experience gambling harm are heavy users of credit cards. The Productivity Commission's 2010 inquiry into gambling found that people who identified as problem gamblers were four times more likely to use credit cards to obtain cash to gamble than those in the still problematic category of low-risk gamblers.
At the time, online gambling was in its infancy and the Productivity Commission was cautious about banning credit cards for online gambling. The evidence linking credit with harm is now much starker and only heightened during this pandemic crisis.
The use of credit cards enables immediate and easy access to credit – allowing people to gamble with money they do not have and often cannot pay back.
Other related inquiries
Parliamentary Joint Committee on Corporations and Financial Services
1.9
The Parliamentary Joint Committee on Corporations and Financial Services (the joint committee) is conducting a closely-related inquiry into the regulation of the use of financial services such as credit cards and digital wallets for online gambling in Australia. The inquiry commenced on 25 March 2021 and the joint committee has published 22 submissions and held two public hearings to date.
1.10
When promoting that inquiry, Mr Andrew Wallace MP, Committee Chair, explained that the inquiry would enable discussion on current trends in online gambling with particular reference to analysing whether there has been an increase in Australians relying on credit to fund their gambling activity.
ACMA Review
1.11
Earlier in 2021, the Australian Communications and Media Authority (ACMA) commenced a statutory review of the operational effectiveness of the credit betting prohibitions, as required by section 15G of the Interactive Gambling Act. The review examined the operational effectiveness and efficiency of the existing credit betting prohibitions, with a focus on whether the provisions could be simpler, clearer or easier to enforce.
1.12
To inform the review, the ACMA released a public consultation paper in February 2021 and 12 submissions were received. The ACMA advised that the review report was provided to the Minister on 17 August 2021. The report is required to be tabled in parliament within 15 sitting days of the minister receiving it. The ACMA informed the committee it anticipated this would occur in the October sitting period.
Key provisions
1.13
The bill would prohibit operators of certain regulated interactive gambling services from accepting payments by credit card, either directly or through other payment methods that rely on a credit card. Proposed new section 15J provides a definition of credit card that reflects the definition in the National Consumer Credit Protection Act 2009. The proposed definition of 'credit card payment' would include payments made via an 'e-wallet' or a 'digital wallet'.
1.14
The explanatory memorandum emphasised that the credit card payment prohibition applies to persons who provide 'regulated interactive gambling services' that is a 'wagering service'. The explanatory memorandum states that the prohibition would not apply to certain other regulated interactive gambling services defined in section 4 of the Interactive Gambling Act, such as the conduct of a lottery. The bill would not apply to face-to-face betting, which is outside the scope of that Act.
1.15
The bill would create a criminal offence (in proposed subsection 15K(1)) for a person who accepts, facilitates or promotes credit card payments for interactive gambling services. A person would commit a separate offence in respect of each day during which the contravention continues (i.e. a continuing offence). The maximum penalty for commission of the offence would be 500 penalty units. The current value of 500 penalty units is $111,000.
1.16
The bill would create a corresponding civil penalty provision (in proposed subsection 15K(3)) for a person who accepts, facilitates or promotes credit card payments for interactive gambling services. A person would commit a separate contravention in respect of each day during which the contravention continues. The maximum penalty for the civil provision is 750 penalty units. The current value of 750 penalty units is $166,500. The explanatory memorandum notes that the higher penalty recognises the effect or stigma of the conviction that would arise if a person were found guilty of committing an offence against subsection 15K(1), in addition to the pecuniary penalty.
1.17
The offence and penalty provisions would not apply if the 'person did not know and could not, with reasonable diligence, have ascertained that the customer or prospective customer in question was physically present in Australia'.
1.18
The maximum penalty for the offence and civil penalty provisions would be five times higher for a body corporate, due to the operation of subsection 4B(3) of the Crimes Act 1914 and subsection 82(5) of the Regulatory Powers (Standard Provisions) Act 2014 respectively.
1.19
Proposed subsection 15L(1) would provide that the credit card payment prohibition in section 15K has no effect to the extent (if any) to which its operation would result in an acquisition of property (within the meaning of paragraph 51(xxxi) of the Constitution) from a person otherwise than on just terms.
1.20
In accordance with proposed section 15M, the ACMA would be required to undertake a statutory review of the new provisions three years after the provisions commence. The bill provides that the review would include public consultation. The ACMA would be required to give the Minister a report of the review within six months and subsequently publish it on the ACMA website. The Minister would be required to table the report in Parliament within 15 sitting days.
1.21
The bill would allow for a transition period of six months before the prohibition comes into effect, to allow wagering operators and consumers to adjust their business and betting practices. The explanatory memorandum stated that this period is consistent with the transition period provided for in comparable prohibitions implemented under the Act.
Consideration by other parliamentary committees
1.22
The Senate Standing Committee of the Scrutiny of Bills and the Parliamentary Joint Committee on Human Rights both made no comment on the bill.