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Emily D. Swoboda

Oz Government Should Standardize Regs for I-Gaming Operators and Clubs, Clubs Australia Says

19 January 2009

Concerns over high instances of problem gambling in Australia are pushing the nation's clubs industry to call for uniform codes for Internet gambling operators and clubs.

Clubs Australia, which represents the 4,000 registered clubs, pubs and casinos in Australia, is calling on the federal government to require Internet gambling operators to standardize gambling regulations regarding credit card use, advertising and responsible gambling practices.

Australian clubs house poker machines, or Australian slot machines, that accept only cash. None of the clubs allows credit card payments to play the gaming machines.

And while the clubs are not opposed to Internet gambling as a concept, they cannot support it as a form of gambling as long as it accepts or requires the use of credit cards to place bets, David Costello, chief executive of Clubs Australia, told IGamingNews Thursday.

"The Internet is the only form of gambling in Australia where clients can place bets directly using a credit card," Mr. Costello told IGamingNews. "Every other form of gambling, whether it be horses, casino, lotto, lottery, scratchies, etc., manages to run a profitable business without requiring gamblers to lay their bets using a credit card. Clubs Australia can see no reason why the Internet should be treated differently by the federal government."

Taking care to emphasize the fact that Clubs Australia's efforts are not motivated by a fear of competition, Mr. Costello said his organization believes Internet gambling is far more dangerous than land-based gambling, due in large part to allowing the use of credit cards and offering inducements like free bets.

"The incidence of land-based problem gambling in Australia has fallen by approximately 50 percent during the past ten years," Mr. Costello said. "Studies have repeatedly indicated that the incidence of problem gambling online is above 20 percent."

Furthermore, he said it is the view of numerous politicians that a credit card is inappropriate for online gambling because if a person doesn't have the money to gamble they shouldn't be doing it.

Jamie Nettleton, a partner at Sydney-based Addison's Lawyers, believes Clubs Australia has a somewhat myopic view of the situation because pokies and online gambling don't merit the same comparison.

"I think it's a bit naïve because it's not apples and apples we're talking about here -- it's apples and oranges," Mr. Nettleton told IGamingNews. "Essentially, if credit cards can't be used in any way by Betfair and the other online operators they just won't have a business."

Mr. Nettleton said the clubs have always been critical of corporate bookmakers for two reasons: They threaten their revenue base in the poker machine market and they threaten commercial arrangements that exist with the local TAB.

"In New South Wales, for instance, the TAB is allowed to have outlets though their own shop fronts or in the corners of pubs or clubs," he said. "So you can go and bet on races and also some fixed odds betting through some TAB terminals that are in the clubs, and the clubs get some sort of either revenue share and/or fees by virtue of it being located there."

But, as Mr. Costello stated, Clubs Australia is not motivated by competition. He believes there are safer ways to do business than with credit cards.

"The use of a credit card is not necessary to fund bets placed online," Mr. Costello said. "A simple solution would be the use of a debit card, or funds transferred electronically to a nominated bank account belonging to the online gambling company."

Andrew Twaits, chief executive of Betfair Australia, however, believes credit cards provide better controls for customers.

In a radio interview on Wednesday (the transcript of which Mr. Twaits provided to IGamingNews), Mr. Twaits said he feels the key is to regulate how much people are depositing and spending, and an account-based system -- like Betfair's -- does just that.

"If [customers] choose to set a limit they can do it daily, weekly or monthly and they can also set daily, weekly or monthly loss limits," Mr. Twaits told ABC Radio. "If they want to change their deposit or loss limits there's a seven-day cooling off period and what we find in most cases, and I'm sure this is the case in most of the people who study problem gambling, when they're in a more rational frame of mind invariably the decision is not to actually deposit any more money."

Clubs Australia also believes that when it comes to advertising and responsible gambling, online operators are not subjected to the same litmus test as clubs.

"Clubs are prevented from advertising poker machines in any way," Mr. Costello said. "This includes even the use of the word on a club Web site. As for TV and radio advertising, it is not allowed. The Australian Government doesn't differentiate on alcohol advertising, why should it when it comes to gambling?"

Following a High Court victory in March 2008 for Betfair, advertising restrictions for corporate bookmakers were lifted in Victoria and New South Wales.

Subsequently, Centrebet, a bookmaker in New South Wales, approached Clubs NSW, the largest faction of the registered clubs movement, about installing betting terminals in their clubs. Clubs NSW rejected Centrebet's bid, however, for the same reasons Clubs Australia is citing now.

Clubs Australia claims that Internet gambling companies have no restrictions for advertising on media that is commonly viewed by youth -- like newspapers, TV and radio.

Moreover, the group complains that Internet gambling companies are not required by law to provide a responsible gambling program or train their staff in responsible gambling assistance.

But Mr. Twaits said Betfair, which is licensed in Tasmania, requires all of its employees, as part of the hiring process, to obtain a license from the Tasmanian Gaming Commission. As part of that process, each employee is put through responsible gambling training.

Clubs Australia is counting on the federal government's Productivity Commission's review of the gambling industry to support its plea.

The commission, which is an independent research and advisory body, 10 years ago issued a report that reviewed the Australian gambling industry and its controls, Mr. Nettleton explained.

"It made a lot of comments about harm minimization not actually being properly addressed and the necessity for there to be such measures because problem gambling was a real issue," he said. "Apart from that, it looked at the online gambling environment and said it was best to regulate, rather than prohibit."

The commission is in the process of updating its review, principally out of complaints that gambling is out of control and there aren’t adequate player-protection measures in place. But it will also take a look at which areas of gambling have seen the most growth.

Clubs Australia will submit its concerns to the commission with the hopes of changing federal gambling laws. The report, however, will not be released until late 2009.

"The submission of Clubs Australia will recognize that [it] is only the view of Clubs Australia, and as such the community may hold a different view," Mr. Costello said. "It is up to the federal government to determine whether the concerns identified by Clubs Australia are valid and if so, how they should be best addressed. Given the complexities of amending federal law, it is our opinion that a change in federal law will take some time to achieve and would not be completed during 2009."

Oz Government Should Standardize Regs for I-Gaming Operators and Clubs, Clubs Australia Says is republished from
Emily D. Swoboda
Emily D. Swoboda