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Australian Internet Gambling Ban Moves a Step Closer

16 August 2000

The concept of similar regulatory treatment for online businesses as applies to their offline cousins may soon die in Australia with a ban on new licenses for Internet-based gambling operations likely to pass through Parliament this week.

The controversial one-year ban on new Internet and "interactive" gambling licenses is likely to be made law while a study is undertaken into the feasibility and consequences of a permanent ban.

A government agency, the National Office for the Information Economy (NOIE), will conduct the study under direction from Federal IT Minister, Richard Alston.

The ruling Coalition government voted today to push the ban through the Australian Parliament, with the Democrats also signaling their intention to support the 12-month moratorium.

The moratorium has come about on concerns that extensive legal gambling in Australia is causing social problems. While most gambling in Australia takes place in 24-hour slot machine venues, pubs and casinos, Alston has said that Internet gambling could exacerbate problem gambling.

The Federal Government has had little chance to crack down on the spread of gambling venues - these are regulated by the individual state governments.

Regulating Internet and telephone gambling services federally is possible as the services fall under national telecommunications laws. Various forms of sports betting and share market speculation via the Internet are to escape the ban, however.

The NOIE study will examine ways of banning Internet gambling for good - if it is found to be possible - as well as assessing the technical, economic and social consequences of such a ban. Submissions from the public are being invited.

Banning options looked at will include: bans on Australia-hosted service providers, blocking Australians' access to overseas gambling Web sites, and blocks based on transactions.

Critics have pointed out that banning local providers will just drive people to unregulated overseas providers with more risks and fewer consumer protections.

Among these critics is Lasseters Holdings, an Alice-Springs-based casino which has an Internet gambling license from the Northern Territory Government.

The company today made a submission to the NOIE study, claiming a total ban would result in "higher ISP charges, slower Internet performance, accidental blocks on legitimate sites and reduced confidence in electronic commerce in Australia."

Lasseters Managing Director Peter Bridge said the cost to Australia involved in searching for, monitoring and blocking these sites would be high.

"The community would ultimately pay to find the proverbial needles in the haystack," he said. "It is unlikely that any filters would ever be 100 percent accurate also, because international online gaming operators in particular are often hidden within portals that also offer non-gambling services."

Bridge said the high cost of monitoring and policing the Internet would be better invested in regulation and consumer education, and in problem gambling support services.

"If the Government spent as much time and money looking for ways to curb problem gambling with gaming machines as it is in targeting online gaming, then we would probably greatly reduce the incidence of problem gambling in our society," he said.

At issue for businesses like Lasseters and industry groups like the Internet Industry Association is how casino gambling, legal in the physical world, could be banned in the virtual world.

"It seems illogical that the same products could be illegal when transferred to what is simply a new mode of delivery," he said.

It seems, in Australia at least, the early-days regulatory approach of what's legal offline should be legal online is no more. The significant community effects of Internet business and publishing are moving the regulatory boundaries. In which direction and how far they shift will see new industries either flourish or wiped out.

Reported by Newsbytes,

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