The Funding Prohibition Debate Again Rears Its Head in Australia

The Australian federal government is nearing completion of its yearlong review of the Interactive Gambling Act (IGA), and despite a recent flurry of media attention in the Australian press, the Australian Bankers' Association (ABA) hasn't changed its stance: Under no circumstances does it support a ban on the funding of online gambling.

"We just can't see a reasonable way to enforce a ban."

- Heather Wellard
Australian Bankers' Association

The ABA was one of nearly 50 groups and individuals who submitted policy papers in April 2003 to the Department of Communications and Information Technology and the Arts, the ministry tasked with reviewing the IGA.

In its submission, the ABA came out against any initiative to ban the use of credit cards at online casinos and sports books. The group says consumers should have the right to use their money "how they choose," and also feels a ban on credit cards for a particular activity would be "unenforceable."

Government officials say the review should be concluded "shortly," and many in the industry are hoping the process will wrap up within the next month or two.

Heather Wellard, public relations director for the ABA, said she has no idea why the issue resurfaced this week in the Australian press. The association's stance on the issue, she said, has been the same for more than a year.

"We have remained steadfast on this one," Wellard said. "It isn't so much that we want to see (credit cards) used for online gaming; we just can't see a reasonable way to enforce a ban."

Some speculated the renewal of the ABA stance in the press was needed to reinforce the level of plausibility of a ban on credit cards for government officials who might have been getting close to making the ban official. The ABA declined comment on why issue has garnered so much attention in recent days.

"I can only tell you that it was nothing we initiated," Wellard said.

The IGA was passed in 2001, making it illegal for Aussie residents to gamble online at sites run by Aussie companies. Many foreign operators are reaping the benefits of the decision, as their sites soar in use from Australian punters.

The 2001 IGA includes a mandatory review of the bill two years after its passage. Started in 2003, the review should be wrapping up before summer. Part of the review included a call for submissions from the public and interested parties.

Some have encouraged the IGA to be expanded to include an outright ban of credit card use for online gaming, similar to proposals that have failed in the U.S. Congress.

The ABA doesn't want its member institutions used as gatekeepers for federal policy and predicts that trying to implement such a system would create mass confusion.

Although measures are in place for online gaming operators to identify themselves during transactions by using special codes, many opt for not using the code, making the transactions clandestine.

Wellard added that there are many legal gaming activities conducted in Australia, and trying to identify "legal" ones with forbidden ones could be a daunting task.

"News Agents sell scratch tickets along with the daily newspaper," she said. "You certainly aren't going to ban them from allowing their customers to ring up their bill on their credit card."

Others in the banking industry continue to argue that a ban on credit card transactions no only could be enforced, but is the best way to combat the rise of illegal Internet gambling in Australia.

Rod Hyde, the consumer finance general manager for the Commonwealth Bank, told the Australian Press Association that the ABA stance is wrong on the issue.

"We support government regulations requiring credit card issuers to identify and block illegal gambling transactions," Hyde said. "This is the most effective way of combating such transactions."

But the ABA remains steadfast in giving consumers the right to decide how they use their credit cards.

"You choose to spend your money how you choose," Wellard said. "Why should anyone direct you?"

The credit card companies agree that any system banning a specific type of transaction would be difficult to enforce.

MasterCard's regulatory affairs director in Australia, Albert Naffah, said it is a tough balancing act whenever it is decided a certain segment of an industry will be blocked.

"You will either under-block or over-block," he said. "If you want to be totally accurate, work needs to be done. Currently, all gambling providers are identified in the same manner, whether they be a casino or sports gambling."

Once the final review is published from the Department of Communications and Information Technology and the Arts, any proposals included in it will be sent to Parliament for passage.