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Australian Government Details Plans on Internet Gambling Ban

27 June 2000

The Australian Federal Government will later this year introduce legislation that aims to force the states and territories to refrain from issuing any licenses for interactive or Internet gambling services, in spite of criticism from the Internet industry and opposition from most state governments.

If the legislation is passed, the moratorium will last from twelve months, backdated to May 19, 2000. It will ban the issue of licenses for new Internet and interactive gambling services in Australia.

The ban will also cover any new services by existing providers and not allow providers to escape the rules by targeting only overseas residents. Fines of up to A$1.1 million (US$661,540) per day will be levied on any companies that break the rules.

However, there are exemptions for popular telephone betting services and online stock trading services from companies such as ComSec and ETrade Australia. The latter, it had been argued by some observers, are no different from any other sort of gambling. Nevertheless, they will escape the ban.

The moratorium would give the Federal Government time to explore longer term limits on Australian Internet casinos, including the technical possibility of complete bans through Internet filters or Web site blocks.

Australia's Minister for Communications, Information Technology and the Arts, Senator Richard Alston - who was responsible for Australia's ineffective Internet censorship legislation and has refused to rule out the possibility of a ban on streaming media - has made it clear he would like to introduce a permanent ban on interactive gambling.

While online gambling is at a nascent stage in Australia, as it is globally, Alston claims there are community fears that the new technology could create even more problem gamblers than already exist.

He says that the Internet has the "potential to put a virtual 'poker machine' in every home," thus exacerbating the problem of gambling in Australia. Per head of population, the nation has one of the largest gambling industries in the world.

Australia's legal casino, betting and poker machines industry is such a huge contributor to state revenues that it has been almost impossible to significantly reduce the number of gambling venues, in spite of studies and community concern over problem gambling. In cities like Melbourne, for example, 24-hour gambling venues operate throughout the city and suburbs.

The majority of states and territories - relying on casino money - rejected the Federal Government's call for a moratorium. Earlier, Australian Capital Territory Treasurer Gary Humphries said that the Federal Government's moratorium was not supported by the majority of jurisdictions and does not comply with ACT law.

The Internet Industry Association's Peter Coroneos also earlier said the industry group would not support either a moratorium or a ban on interactive gambling services, saying: "All it will do is drive operators offshore and will therefore undermine the policy intentions which are to provide better protection for players while allowing an activity which is legal offline to grow."

As Coroneos points out, the ban will not affect offline services of a similar nature which make up almost all of Australia's gambling industry. It will seek to single out Internet providers.

In May, Australian media mogul and casino operator Kerry Packer's Publishing & Broadcasting Ltd and ecorp companies ignored the moves toward a ban, announcing plans to build a "global online gaming enterprise" based in Tasmania.

Exchange Rate: $1 = A$1.66

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