Australia Chews on 'Plan B'

You can toss the planned track(s) for this week's On-Line Gaming Forum in Melbourne out the window; the prevailing issue, regardless of the specified topics, has been the Australian federal government's retroactive 12-month moratorium on the issuing of new online gambling licenses. The centerpiece of the yesterday's debate was a mid-afternoon announcement that the Internet Industry Association was trying to bring a compromise calling for a three-month moratorium brought to the table.

The ball got rolling early by Liberal South Australia Senator Jeannie Ferris. The Senator repeatedly pronounced her support for the online gambling industry, but criticized the industry heavily for failing to present itself as a viable business. Her overall sentiment was that a national approach needs to be taken and that the states need to get on the same page and then work with the federal government. As for the notion that online gambling was obviously a scapegoat in solving Australia's overindulgence in poker machines, she blamed the industry for not doing enough to educate Australians and distinguish Net betting from playing the pokies.

Ferris pointed out that the Senate's NetBets report (a study, released in March, into the effectiveness of regulating Internet gambling) specifically outlined what the industry needs to do to gain a federal endorsement and criticized the industry for sitting on its hands. "You've got the chance to be world leaders," she explained, "and in six months you've done nothing to tell the world that's what you want to do."

She added, "All your industry did is kill the messenger. Nobody picked up the ball and said here's a chance to run with it." She also said the industry lacks leadership and needs to appoint a national spokesman and that it needs to generate better PR by getting involved with more charities and community-related projects.

The Senator's statements prompted a chain of responses, particularly during a regulator's panel discussion. Ferris was not available to respond, however, because she left the building immediately after speaking. Northern Territory Director of Licensing David Rice responded to her call for better regulations with a reminder that national gaming regulators were planning to meet in October to discuss the NetBets report and look into making improvements to the national model. David Ford, executive director for the Queensland office of gaming regulation, agreed and added that Australia's national model for regulating online gaming (drafted in 1997) has been, and was intended to be, an evolving work in progress. One of the significant likely additions to the model, according to Rice, could be the inclusion of terms for sports and race wagering. Most regulators agreed--although it hasn't been verified--that the moratorium as well as a ban, should a ban occur, would include sports and race wagering operations.

Regarding the stalemate between the states and the federal government, attorney Jamie Nettleton pointed out the federal government last Friday put together a backup plan in case the one-year moratorium doesn't fly.

"Plan B," so it seems, surfaced later in the afternoon in the form of a message from Internet Industry Association Executive Director Peter Coroneos, who has been working with the federal government for months in an effort to avoid prohibition. Coroneos drew up a compromise in which the retroactive 12-month moratorium would be ditched in favor of a three-month moratorium, effective immediately. The catch: During this period, the states would have to come to an agreement on how to approach Net betting. Should an agreement not be reached, the moratorium would be extended.

Coroneos's message was delivered by Global Gaming Services Managing Director Steve Toneguzzo, who subsequently addressed the stunned audience in what turned into a town meeting of sorts. Most delegates appeared to at least be willing to consider the compromise. The only negative reaction came from a Tasmanian official who denounced the proposition as an "extraordinary stunt." To that, Toneguzzo answered, "That's the sort of approach that will lead to a 12-month moratorium."

A delegate from Norfolk Island followed by saying that the proposal was "an olive branch and we should consider it." Rice agreed, saying it's the "first positive step out of Canberra in some time."

Is Ferris' suggestion really a positive step? One attendee suggested that the government doesn't want to look like the bad guys for stomping a promising new industry, so they're putting it in the hands of the states, knowing that the states will never be able to work out an agreement. As a result, he says, the states and regulators would appear unable to regulate themselves. There could be a grain of truth in the idea, as Western Australia, for example, is on the record as having no intention of getting involved in online gambling and would likely never be on the same page as the likes of Queensland and Tasmania. Some industry officials thus believe that the compromise could set the states up for failure.