Committee view
Online gambling
4.1
Online gambling is a popular entertainment pastime for many thousands of
Australians, and the committee would like to thank the hundreds of Australian
online poker players who made submissions to this inquiry and acknowledges
their commitment to protecting their past-time. The committee also acknowledges
that a number of Australians are professional and semi-professional poker
players and that a prohibition on the provision of online poker services may
have an impact on their capacity to earn income.
4.2
It is clear from the evidence presented to the committee that though the
majority of people who engage in online gambling are able to do so safely and
without experiencing gambling-related harms, tragically, this is not the case
for all. The O'Farrell Review found that the rate of problem gambling for
online gamblers is three times higher than that of problem gambling across all
other platforms, including venue-based gambling. It found that 41 per cent of
online gamblers were considered to be 'at risk' gamblers while less than 20 per
cent of venue-based gamblers were considered to be 'at risk'. These 'at risk'
gamblers experience harms to physical and mental health, and financial
problems. Gambling-related harms also affect the friends and family of gamblers
and can result in inter-generational harm. The Productivity Commission
estimated that the social costs of problem gambling are $4.7 billion per
annum—a significant loss.
4.3
The committee is of the view that harm minimisation and consumer
protection should be of primary importance when regulating the online gambling
industry. As such, the committee supports the efforts of the Australian
Government to ensure that the impacts of gambling-related harms on the
community are reduced, and that Australian consumers are protected.
Online poker
4.4
It is estimated that the Australian online poker market is worth $135
million, and though online poker has enjoyed significant popularity in the
past, participation numbers have decreased over the past five years, likely in
response to changes in the regulatory environment. However, despite its lack of
popularity when compared to other forms of gambling, studies have shown that
online poker continues to be played by a smaller, but highly engaged community.
4.5
Throughout the course of the inquiry, it was argued that online poker
differs both in its features and impact on consumers. As such, it should be
regulated differently to other forms of online gambling. In particular, it was
highlighted that many consumers view online poker as a skills-based game, or at
least, a game of mixed skill and chance. Further, online poker was seen as
offering a range of benefits to consumers including that it can be played for
long periods of time without significant player expenditure, and players are
able to better control their spending than when engaged in other forms of
online gambling or venue-based poker. Other benefits include the development of
mathematical and social skills, and important social networks. Submitters also
argued that the number of people experiencing gambling-related harms as a result
of online poker is small.
4.6
Evidence was also received that online poker provides an important
social function for those affected by disability, geographic isolation or
caring duties. It was highlighted that many of these players are unable to
participate in venue-based poker, and in the absence of online poker services
are likely to lose important social networks, and an enjoyable entertainment
past-time.
4.7
However, it was also indicated that very little research has been
conducted on the potential benefits of online poker. The committee is of the
view that any claims of benefits derived from engaging in online poker should
be approached with caution.
4.8
The committee acknowledges that many submitters indicated that they were
able to participate in online poker without experiencing gambling-related harm.
However, the committee also received evidence that there are a percentage of
online poker players who are at risk of suffering, or who have suffered
gambling-related harms as a result of playing online poker. It was also
highlighted that online poker may be just one of many gambling activities
undertaken by those who suffer-gambling related harms, and may not be the sole
source of such harms.
4.9
Submitters highlighted that very little research has examined the impact
of online poker on consumers, particularly in relation to gambling-related
harms and treatment options. The committee is of the view that such research is
critical to understanding the potentially harmful impacts of online poker on
those vulnerable to gambling-related harms.
Regulatory approaches
4.10
Australia prohibits the provision of online poker services to
Australians—this prohibition includes both onshore and offshore services,
though efforts to combat offshore operations are of course limited by jurisdictional
and technological challenges.
4.11
This regulatory approach is informed by the Australian Government's harm
minimisation strategy. The Minister for Communications, Senator the Hon Mitch
Fifield, has indicated that the Australian Government has no intention of
liberalising the online gambling market to allow for the provision of online
poker. This is despite recommendations by the Productivity Commission to
liberalise online poker to prevent the expansion of the illegal offshore
market.
4.12
It was argued in evidence that prohibition simply does not work and that
consumers simply turn to illegal offshore operators and the black-market
expands to fill the void created by the absence of regulated and licensed
services.
Consumer protections
4.13
Utilising illegal offshore operations carries a range of risks for
consumers including a lack of harm minimisation mechanisms and unscrupulous
operators mismanaging or absconding with players' funds. However, despite these
risks, a number of witnesses indicated that they would continue to access
offshore operators and would utilise Virtual Private Networks (VPNs) to
circumvent attempts to block access to such sites.
4.14
Supporters of the liberalisation of online poker to allow for regulated
and licensed services in Australia argued that this would provide important
consumer protections, and a revenue stream for the Australian Government.
Evidence of the success of other jurisdictions such as the United Kingdom
highlighted that since the UK Gambling Commission introduced licensing
requirements, access to black market offshore services has been significantly
reduced.
4.15
The Australian Government has acknowledged the need for a strong
national consumer protection framework and has undertaken significant work to
implement such a scheme to protect users of online gambling services. The
Department of Social Services noted that the implementation of such a scheme is
absolutely vital before any kind of liberalisation of the online gambling
market.
Impact of legalisation
4.16
Though supporters of legalisation of online poker highlighted the
important consumer protections and revenue opportunities offered by regulation
and licensing, evidence was also received that the number of online poker
players may increase as a result of the liberalisation of the market. There may
also be a subsequent increase in the number of people experiencing
gambling-related harms as a result of online poker.
4.17
The experience of legalising online sports wagering was provided as an
example of the consequences of such a decision. However, it was acknowledged
that again, little research has been conducted specifically on the impact of
regulated and licensed poker on the prevalence of gambling-related harms, and
if there has been an increase in the number of consumers.
4.18
The committee is of the view that any attempt to liberalise the market
through the legalisation of online poker should be approached with caution. In
particular, an increase in the number of problem gamblers, or an exacerbation
of existing problems should not eventuate from any regulatory reform.
Recommendation 1
4.19
The committee commends the Australian Government's efforts to implement
strong consumer protection measures, and harm minimisation strategies. The
committee recommends that any future consideration of the legalisation of
online poker should only occur following the complete implementation of the
National Consumer Protection Framework.
Recommendation 2
4.20
The committee recommends that the Department of Social Services support
research into the impact of regulatory approaches on online poker, including the
relative benefits and harms associated with prohibition and legalisation.
Senator
Janet Rice
Chair
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