Is It Time to Embrace P2P Down Under?

The die appears to have been cast in Australia's review of the interactive gaming industry.

An unnamed government source told various media outlets last week that the Howard government will allow the licensing and regulation of online betting exchanges. It will do so by leaving the Interactive Gambling Act in tact, meaning exchanges will be able to operate unfettered from federal regulations.

It will then be up to the individual states and territories to decide on licensing and regulation standards. Some states are likely to prohibit exchanges; others will welcome the industry.

Despite having no official word from the government, opponents to betting exchanges in Australia are intimating that they're losing the battle.

Tab Ltd. Public Affairs Manager Peter Fletcher believes the traditional betting industry will adapt.

"If we are forced to get into these things, courtesy of federal government's inaction, then rest assured that the TABs with their huge account-betting customer base will make a welter of it," Fletcher said Monday.

Tim Ryan, chief executive of the Australian Bookmakers' Association, predicted an "open slather" if exchanges are allowed to be licensed in Australia and feels that bookmakers will throw their weight around to turn the competitive balance back into their favor.

"Bookmakers will not be left out of the biggest explosion in gambling in Australia since the introduction of poker machines," Ryan said. "Australian bookmakers will be at the forefront of that battle for increased share of the entertainment dollar--and their share of the gambling dollar."

The government's official position on betting exchanges will be made public with the release of its review of the Interactive Gambling Act, which started more than a year ago and included a public submission period.

Some Australian newspapers are reporting that the final review could be released this week, although it might not come for at least another month.

"I don't think the Cabinet will decide until its next meeting mid July," Ryan said. "An election may be called before that, in which case, in caretaker mode, the government won't do anything until after the election."

Traditional bookmakers and TABs argue that exchanges are fleecing horse racing and could jeopardize the financial welfare of the industry.

Last week officials with NSW TAB indicated that they would create their own exchange if the government moves forward with an exchange licensing scheme, a move Fletcher said Tab Ltd would also likely follow.

"We will protect our own commercial viability by setting up our own exchange," Fletcher said, although he still believes exchanges would be bad for the industry as a whole.

"Sadly, however, Australian racing, its owners, trainers, jockeys, strappers, race club staff and reliant industries etc, will be the losers," he added.

Ryan also remains adamant that exchanges would do more harm than good for the racing industry.

"The approval of betting exchanges will drive wagering margins to new lows, and as a result there will be a massive increase in betting turnover," Ryan said. "Australia's registered bookmakers are going to get in on the action. Out with the 1 percent of turnover paid to Australian racing by on-course bookmakers, racing will be lucky to get 0.2 percent of bookmakers' turnover."