Interactive Gambling Amendment Bill 2016 Second Reading

I rise to speak on the Interactive Gambling Amendment Bill 2016. This bill sends a strong message to overseas operators and regulators that Australia is very serious about compliance with its online gambling laws. As we know, international experience shows that a combination of strong regulation and enforcement significantly reduces the size of the problem. Since the introduction of the bill in November last year, already a number of major offshore gambling operators have ceased providing, or indicated that they will withdraw, their prohibited services, as Australia can no longer be seen as perhaps a grey market in relation to gambling laws. The disruptive measures that the government is proposing in this legislation include extending the ambit of enforcement to affiliates and agents. As we know, some illegal offshore operators use an Australian based group of agents and affiliates to recruit new customers in return for a commission paid by the operator relative to the customers’ wagering activities. Our amendments to this bill enable enforcement action to be taken against such actors. This is a very important measure contained in this bill.

Depending on who you talk to, online gambling, for some, can be the most convenient form of gambling—or entertainment, as some have said to me—or a greater curse, according to others. In either case, gone are the days when people had to go to somewhere like a racecourse to have a bet, if that is what they wanted to do. In fact, in 2014, $2.4 billion was spent on online gambling by Australians, which is double the amount of 10 years earlier. Australians, as we know, are amongst the highest-spending gamblers in the world, spending $1,245 per capita in 2014, and we know that that includes many who cannot afford the loss. The overall expenditure on gambling in Australia in 2013-14 was $21.1 billion, and wagering made up $3.4 billion of this. As an interesting comparison, according to the government’s Private Health Insurance Administration Council, private health insurance premium revenue for that industry for 2013-14, the same period, totalled $19.3 billion, with $16.9 billion, or around 85 per cent, paid as benefits to policyholders. From that comparison, we can see that in Australia we spend more on gambling than we spend on insuring our health. That indicates pretty well how a lot of Australians see gambling in this country.

Historically, gambling was something like a game of poker around the table with a group of friends. It does not look anything like that anymore. We now see gambling with online overseas service providers, often illegal offshore gambling providers. In Australia, we see all sorts of gambling, including poker machines and national lotteries, and some of these make very good contributions to good and worthy causes. For that reason, those forms of gambling are often supported in homes that would not be involved in other forms of gambling—because the profits are spent for the community good.

I look at horseracing and the changes and disruption that have occurred through the use of the internet and online gambling. The punter, as they are called, knows that odds are calculated to minimise the risk to the gambling host, be it a bookie at the track, if the punter is at the track, a TAB or an online betting company. Historically, it was not unknown for the humble track-side bookie, particularly in rural and regional areas, to go broke if he or she did not calculate their odds well or failed to spread the risk evenly. But today we see, especially with some of the internationally owned operators in the online space, the very extraordinary power of computing and computer programs, which make sure their profits are maintained. For those who are spending the money and having a punt or a gamble, a judgement for the punter to make is how likely they are to be successful in this space. What are the real odds for that gambler? Have they thought about that side of it or is it simply wealth transference, in a sense?

We have seen it made easier and easier to gamble online. That has been the conversion: from traditional products to any device, anywhere, at any time. And many Australians are accessing this service from what could be described as, at best, questionable overseas service providers.

I have seen the impact of this—and we have talked about the disruption of the internet in many fields—when I have looked, in rural and regional Australia, at some of the smaller physical racetracks. They are run, often, by community volunteers. I have seen the challenge they face in trying to compete, in running an event for local people and the community more broadly and for the industry that frequently is a major employer in rural and regional Australia. We have seen numbers of local bookmakers and bookmakers disappear. In fact, there are some great challenges for small racetracks and the volunteer groups.

With the overseas operators, there is greater risk for consumers because the legal protections are not in place and the standard consumer protections are not there. There is the potential, we see, for greater sports integrity problems, as relevant betting and transaction information is actually not available. There is less tax revenue for governments, and less product and other fees for the racing and sports industries. There are fewer jobs for Australians—and I have touched on that in talking about rural and regional Australia—and lower numbers of people actually employed in these industries. And some illegal offshore gambling sites are actually connected, as we know, to crime syndicates. So it is very, very important that there are strong and enforceable regulatory frameworks to protect Australians from the adverse effects of illegal online gambling services.

When, on 7 September, the government commissioned the review to examine the impacts of illegal offshore wagering on Australia, there came up a number of options to mitigate the effects. We also looked at the efficacy of consumer protection measures. We know from that review that the number of online wagering accounts in Australia has grown fourfold during the period from 2004 to 2014, from 200,000 to 800,000, with many people actually operating multiple accounts.

In April this year, the government announced it would implement 18 of the 19 recommendations in the government’s response to the recommendations of the review of illegal offshore wagering. This review investigated the impacts of illegal offshore wagering on Australia, measures to mitigate its effects and the efficacy of consumer protection controls. It was led by the Hon. Barry O’Farrell and consisted of consultations with a wide range of industries, academia, those in responsible gambling and government stakeholders, problem gamblers and consumers. The review was told the existing approach to enforcement of the IGA was insufficient to actually deter offshore operators from providing what are prohibited interactive gambling services to Australian consumers and that the amount of money being spent on illegal wagering and its services could be as high as $400 million annually, just on the illegal gambling side. So the money spent on illegal and prohibited gambling services could be $400 million a year. Previous estimates found the total amount of money spent on all illegal interactive gambling services was close to a billion dollars annually. The review concluded that the aim of governments should be to reduce the scope of illegal offshore gambling activity and control the associated harms, through a range of disruptive and deterrent measures, and through strong enforcement of regulation, which we see in this bill.

In addition, the review showed that the rate of problem gambling is higher amongst interactive gamblers compared to gamblers more generally. Offshore gambling has a detrimental effect on the Australian wagering, racing and sporting industries, and on problem and at-risk gamblers, and on consumers and governments. I have touched on the impact that it has in rural and regional Australia, and I am sure that there are other members in this chamber who would have seen a similar impact on their small local racetracks, on their groups of volunteers who provide some great entertainment and also on the industry itself. There are so many people who are employed in the equine sector, and I think the sector is not always recognised for the significant employer it is, and for the economic multiplier that it provides in many rural and regional communities.

Australians are protected against illegal online gambling services through the Commonwealth’s Interactive Gambling Act, and that actually prohibits the provision and advertising of prohibited interactive gambling services to people in Australia unless they hold a licence under the law of an Australian state or territory. It is the intent of the government to strengthen those protections—in the first instance, by clarifying the requirements to actually obtain such a licence.

The bill before us today will also introduce a civil penalty regime, to be enforced by the Australian Communications and Media Authority, which will allow the ACMA to be responsible for the entire complainthandling process, from receipt to enforcement—a seamless process which I think, in this instance, is a critical part of the enforcement process and the civil penalty process. It will empower the Australian Communications and Media Authority with new civil penalties, and they will add to and complement the existing criminal penalty powers held by the Australian Federal Police. This demonstrates how serious this government is in this space. The government will also build relationships with international regulators and raise awareness of Australian gambling laws and the risks associated with illegal gambling services.

Online gambling has been linked with cybercrime and money laundering, and it really is imperative that this connection is broken. So I think that, with the AFP involvement, and as we see through this bill and the measures contained in this bill, the government is taking a proactive approach in dealing not only with the illegal operators but also the cybercrime and money laundering that goes with it.