The Australian Senate passed the 2016 Internet Gambling Amendment Bill, which prohibits offshore online poker sites, on Wednesday. The IGA Amendment goes into effect in 30 days.
When the IGA Amendment goes into effect, all publicly-traded online gambling operators will leave the Australian market. The passage of the bill is the Australian equivalent of the UIGEA law in the United States.
Interactive Gambling Act 2001
For the past 16 years, the Interactive Gambling Act 2001 governed Aussie online gambling. Though IGA 2001 technically made online gambling illegal, it offered no legal framework to block or prosecute offshore operators. Internet gambling existed in a gray area, allowing reputable operators from the UK and other European countries to accept Australian players.
In November 2016, the Coalition government introduced the Interactive Gambling Amendment Bill 2016. At the time, most assumes IGA 2016 closed the loopholes and banned sites from accepting Aussies.
Interactive Gambling Amendment Bill
That did not prove to be the case, so the Australian parliament continued to tweak IGA 2016 throughout the early months of 2017. Wednesday’s Senate vote is the culmination of months of legislative action. The end result is a complete ban on online and mobile gaming sites.
One reason the current laws are different from earlier attempts to ban offshore operators is collaboration with gaming regulators in the United Kingdom, Canada, and elsewhere. With international cooperation, gaming companies which are traded on the London Stock Exchange or Toronto Stock Exchange no longer can act with impunity. To maintain their healthy operations back in the home country, they must comply with Australian law.
The Australian Poker Players Alliance Forms
Not everyone agreed with the ban. Some notable Australian lawmakers vocally opposed the IGA 2016 Amendments, while Aussie card players formed the Australian Poker Players Alliance. The lobbying efforts did not work in this case, but the APPA hopes to overturn the new law in the future. Australia does not face another national election until 2019, so players must bide their time until a new government is in place.
Camden Haven Courier published a report which estimated Australia has 130,000 active poker players. Lawmakers who think their national ban is going to stop those players’ online and mobile gaming are mistaken. The IGA Amendment does not end Internet gambling in Australia, but only drives it underground.
Unregulated Poker Sites Enter Australia
As the publicly-traded, regulated online gambling companies leave Australia, a wave of private-owned, unregulated online gambling companies will replace them. Like in the United States after the UIGEA law went into effect, plenty of gaming operators exist with the resources, motivation, and werewithal to handle the gaming habits of Australians. As with any popular hobby or activity, prohibition does not work.
The gambling ban means Australian online card players will wager on sites with no need to uphold responsible gaming standards. They will not need to advertise hotlines or helplines. They will not need to offer self-exclusion lists or panic buttons. They can offer in-play betting apps, but live betting won’t be restricted by common sense regulations. Those operators might restrain themselves, but only if they choose to do so for internal reasons.
The Economist’s Stats on Aussie Gambling Habits
Advocates of the online poker ban argue that Australians spend too much on gambling. The Economist estimates Aussies spend an average of $1000 a year on gambling, which is the highest per capita in the world. Roughly 80% of Australians gamble at least one time each year, which is also the highest rate in the world.
Most of the money wagered is spent on poker machines. Pokies generate roughly 70% of the revenues for land-based casinos. In the online and mobile gaming market, Internet pokies have a similar effect. Online poker players consider their hobby to be a game of skill, while pokies are a game of chance. Thus, the card player believe their form of gambling was targeted unfairly by lawmakers who do not understand gaming.
IGA Amendment Might Help Tabcorp and Crown Resorts
The Economist said that the Internet Gambling Amendment Bill might help domestic Australian gaming companies, such as the merged Tabcorp-Tatts corporation and Crown Resorts Limited. In many ways, Aussie gaming corporations needed to push out foreign competition in order to sustain growth, because their gaming market is mature.
The Economist noted, “Despite Australia’s profitability, the high level of existing gambling penetration and relatively small population of 23 million make it a relatively mature market without much room for expansion.”
Gaming Companies Might Have Less Growth Than Expected
Of course, the growth might be less than what is expected. Studies in the United States have shown minimal overlap between brick-and-mortar and online gamblers. 80% of the online gamblers in the New Jersey gaming market never visit a land-based casino in a year’s time. The two groups are mutually exclusive, so banning online gambling is not likely to drive many players to Crown Melbourne.
Those same Australian gaming companies also might not find they can compete with the private online poker rooms which replace the more well-known poker sites which soon will leave the Australian market. Land-based Australian gaming companies exist as monopolies or duopolies in their state or territory, so their motivation to innovate is minimal. If those companies try to compete in a meaningful way in the Internet gambling market — as some have suggested they might — those companies might find they cannot anticipate the expectations of Aussie card players the way international operators can.
