2016 Australian Gambling Legislation Review

Review of Gambling Legislation in Australia

Government gambling review to strengthen legislation against illegal operators.

Australian Gambling Legislation Review in 2016 – An Overview

Online casino gambling is very popular in Australia as it is all around the globe. However, one of the major concerns has always been illegal offshore wagering, which is why the country's Coalition Government announced a review in a bit to investigate ways to strengthen enforcement to ensure that Australia's online gambling enthusiasts are protected from illegal operators. The announcement of the review was made by former Minister for Social Services, Hon. Scott Morrison, and was expected to be completed by 18 December, 2015.

Reasons for the online gambling legislation review/Terms of reference

Statistics from the Australian Institute of Family Studies (AIFS) reveal that 60 percent of the $1.6 billion online gambling revenue generated in Australia goes offshore to over 2,000 sites which the regulators and tax collectors in the country have no control over.

Overseas online gambling operators do not contribute product fees or comply with Australia's laws. In addition, they are under no obligation to either monitor or report suspicious betting activity. In addition, Aussie punters are not protected when it comes to payouts from winnings. Therefore, the objective of the review is to minimize or eliminate the adverse impact it could on the over 400,000 Australians, mainly men, who are estimated to have gambling problems.

 For the most part, many online casino operators headquartered in Australia attempt their operations in unregulated jurisdictions such as the Pacific and Asia in a bid to avoid fulfilling their legal obligations.

The Review

The objective of the review is to examine how regulation of overseas jurisdictions could be applied in Australia along with technological and legislative options. The review is being undertaken in consultation with stakeholders including state and territory governments, the gambling industry and community while the public will be given the opportunity to express their views. Some of the major areas that will be touched upon by the Review includes and is not limited to:

  • The economic impact of illegal offshore wagering
  • Possible measures such as international regulatory regimes to curb such activities
  • The technological and legislative options to alleviate the costs of illegal offshore wagering
  • Determining effective ways to protect the consumer

Why online gambling enthusiasts bet offshore

One of the major reasons for the illegal offshore wagering review is the major concern about the increasing number of people who bet offshore. One of the obvious factors is the higher profit margins. According to the Australian Wagering Council, as much as $2 of every $3 spent on online gambling by Australians is with illegal offshore providers. Given the presence of over 2,400 online casino and gambling sites available to Australians, this translates into a huge sum.

Low margins = higher odds

Margins are a measure of a bookmaker's profit where lower margins mean better returns for the punters. For the most part, the margin is a measure of a bookmaker's profit.  International bookmakers such as Pinnacle Sports, MarathonBet, and MatchBook, are among the offshore bookmakers to offer very low margins as compared with Australian licensed bookmakers.

Pinnacle Sports has a margin of as low as 2.9% on Australian sports as compared to Australian licensed bookmakers such as Bet365 and PantherBet who are at 4.9% and 4.7% respectively. These figures make it clear why many Australian gamblers prefer placing punts with offshore bookmakers. Operating on low margins translates into high odds, which is of course, good reason for punters to turn to offshore bookmakers like Pinnacle Sports. For arbitrage punters most trades tend to have one side while for others it could spell the difference between long-term success and failure.

Bookmakers like Pinnacle Sports were among the first to break away from tradition and offer reduced margin pricing in a bid to profit from a higher turnover. In the head to head market, their margins are as low as 2.5% as compared with Bet365 at 5% and PantherBet at 4.9%. In terms of odds, you will find Australian bookmakers offer odds of $1.84 - $1.91 in head to head matches as compared to $1.95 - $1.96 by Pinnacle Sports.

Another attraction to offshore bookmakers is the lucrative promotions that tend to pull Aussie punters towards them. These bookmakers offer a great deal of promotions, bonuses, and much more, to attract players into their fold.

Offshore bookmakers like Pinnacle Sports with their lower margins tend to offer fewer services as compared to Australian bookmakers who tend to feature a larger array of sports and markets.

Play betting has been the subject of plenty of controversy where Australian punters can place bets on live sports. Currently, the Interactive Gambling Act (IGA) only permits such bets by phone. However, overseas bookmakers have found a way to circumvent the rule and allow Aussie punters to place wagers via their computer's microphone.

At the time of writing the Australian Interactive Gambling Act (IGA) has taken an unexpected turn following the promotion of MP Alan Tudge, who is now minister for Human Services. Earlier, as Assistant Minister he was given the task of reporting the government's review of the IGA. This has delayed the final report as Tudge's promotion is going to have him work closer to the Minister for Social Services, Christian Porter, who has a major role in the review of the online gaming legislation.

The report of the IGA review is likely to bring about a major chance to Australian gambling including play betting. For now, the entire online gambling industry continues to wait in anticipation.