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Australian Plan Attacked as Inconsistent, Ineffective and Anti-Technology

29 March 2001

Critics of the Australian federal government's proposal to prevent Australians from interactive gambling at Australian-owned sites are attacking the plan as inconsistent, ineffective, anti-technology and an election-year gimmick.

And the country's online sports books, who used their political clout to get themselves exempted from the current moratorium on new online casinos, are preparing to fight the government's plan. They would be included in the proposal announced Tuesday, which would permit Internet sports books and casinos to accept bets only from foreigners.

"The government is saying there's a problem with gambling," Gerard Daffy, sports betting manager at Centrebet, told RGT Online Tuesday. "But if there's a problem with gambling, why not stop all forms of gambling – telephone, Internet, TABs (totalizator boards), on-course bookmakers, everything? They're not going to do that, because the whole thing's a smokescreen to deal with the 300,000 people who have a problem with poker machine gambling."

Australia has thousands of "pokies" – poker machines – in hotels and pubs. The term refers not just to video poker devices but to slot machines generally. Senator Richard Alston, the federal Minister for Communications and Information Technology and the government's point man on interactive gambling, says the country has more than 20 percent of the world's total supply of the machines.

Daffy said that Centrebet, in Alice Springs, Northern Territory, was the second company in the world to offer any form of online wagering. It took its first bet in August 1996, and with annual turnover (handle) exceeding A$200 million, it's Australia's largest sports betting site.

About 80 percent of Centrebet's business comes from outside of Australia. But Daffy isn't willing to forego the other 20 percent without a fight.

"We're going to fight tooth and nail," he said. "The Northern Territory government is right behind us, and each state government is behind its operators."

"The government thinks that by denying the Australian public access to us that they won't go and seek that out elsewhere. What's the difference between typing in www.centrebet.com or www.willhill.com?," Daffy said, referring to a site operated by UK bookmaker William Hill. "None at all. These overseas companies are aware of that, that's why they're now offering wagering opportunities on Australian sports.

"Punters will go and seek another bookmaker in another jurisdiction, possibly who might not be regulated or who has a questionable background, and they'll be able to bet with them."

Australian operators may leave the country and take good-paying jobs with them if the legislation passes, Daffy said. "I've got no doubt at all that there are several countries around the world that would welcome us with open arms."

The Politics

The attack by Prime Minister John Howard's government on interactive gambling is seen as an effort to gain political support from voters who have legitimate concerns about problem gambling.

"The federal government is under considerable electoral pressure in the run-up to the next (federal) election, which is due later this year," Jamie Nettleton, a lawyer at Coudert Bros. in Sydney who represents gaming industry clients, told RGT Online. "This is viewed by the federal government as being an area where they can show their regard for social interests and looking out for social welfare."

Patrick Fair, also a Sydney lawyer and chairman of the Internet Industry Association, said the government's policy "is being argued for on the basis that it is there to help hold back the tide of gambling in Australia. But the effect of it is to walk away from the issue – not to put in place player protections, not to have a scheme that works for problem gamblers in Australia but rather to leave them to the mercy of international sites.

"The government is trying to be seen to be doing something, but it's not doing anything that's any good."

Apparently, the government has not yet drafted the legislation it wants, so people are responding to a press release that Alston issued Tuesday. Parliament would have to pass the legislation by the end of next week, because it doesn't meet again until May 22, three days after the moratorium expires.

The Sydney Morning Herald said Wednesday that the proposed ban faces "a rocky passage" through the Senate. It quoted Democratic Senator Natasha Scott as calling the proposal "a token attempt by government to grab headlines. It is a stunt. It does nothing to grapple with problem gambling in Australia."

In a statement on her Web site, Labor Senator Kate Lundy labeled the plan "an absurd proposition." According to Alston, she said, "It is acceptable for Australians to place a bet online with an overseas operator; it is acceptable for people overseas to place a bet with an Australian operator; but it will be illegal for an Australian to place an online bet with an Australian operator!"

Lundy also noted that if the government's proposal is enacted, ". . . Australia will be exporting a product that is deemed unsuitable for its own citizens."

Alston responded by declaring that "Labor deserts families on Internet gambling," saying that "Labor's first policy of the year is to put a pokie machine in every lounge room."

Peter Bridge, managing director of Lasseters Holdings in Alice Springs, which operates Australia's only online casino, said in a statement that the proposed ban would prevent Australians from accessing only 20 of an estimated 1,400 online gaming sites worldwide.

Bridge said thousands of Australians already wager at offshore sites, many of which are unregulated and pose the greatest threats to players.

If the government's proposal does get through Parliament, it may be changed significantly from what Alston has outlined. That leaves the question of what can be accomplished legislatively in one week.

"There's the possibility that if it becomes too hard (to pass), the government takes the easy option and tries to extend the moratorium until proper debate can take place before the Parliament," Nettleton said.

The Technology Question

While Alston deplores "the dramatic increase of gambling opportunities over the Internet directly into Australian homes," his statement notes that the proposed law would not interfere with telephone betting. It only seeks to prohibit interactive gambling that employs new technology – the Internet, interactive television and mobile phones.

The contradiction was not lost on Centrebet, which said in a statement Wednesday: "By permitting telephone betting but not Internet betting, the Government is prohibiting the Internet, not betting. Australians using the same telephone line can legally place a sports bet if they use a handset, but that bet will be illegal if they use a keyboard instead."

Fair's organization worries that the ban could slow the introduction of new technology in Australia. And Fair said the proposal favors the old economy over the new economy.

"The vested interests of poker machines and offline lotteries and casinos are quite comfortable without having to meet the competitive pressure that might be placed on them by the Internet, and not having to adjust their services," Fair told RGT Online. "This is a conservative government and it's quite comfortable with the idea that if things don't change, then that's good."

Peter Coroneos, also of the Internet Industry Association, said, "… the bigger question of why they are singling out the Internet for discriminatory treatment is not clear. The only thing they point to is 'greater accessibility,' though they do not seek to interfere with established access methods like telephone betting."

In Lundy's statement, she said the government is sending a message that "we are not an IT (information technology) savvy nation, but an IT backwater banning and prohibiting content because the Government has no idea how to strategically and effectively implement a workable policy that protects those most at risk without encumbering Internet development."

Two lawyers commented on the government's plans to require Internet Service Providers to offer filters to their customers, filters that would supposedly block access to gambling sites. While the ISPs would be required to offer the filters, customers would not be required to use them.

"The people in whose interest this legislation's purportedly been proposed – the problem gamblers – are the ones probably least likely to take up an offer (of a filter) from an ISP," Nettleton said.

"Filters can work, but they're voluntary," said Tony Cabot, a lawyer in Las Vegas and author of the Internet Gambling Report IV. "Obviously, if you're somebody that wants to gamble online, you're not going to use a filter. Filters are good for kids. But in terms of a self-policing type of activity, it's useless because you make the decision to put the filter on, just like you make the decision to turn the computer on."

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