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Australia's Internet Gaming Moratorium is Defeated

10 October 2000

The Australian Federal Government suffered a surprise defeat Monday night in its attempt to impose a moratorium on Internet gaming. The Interactive Gambling (Moratorium) Bill 2000 failed to pass the Senate on a 33-33 tie vote.

The bill would have prohibited the states and territories from issuing new licenses for online casinos and sports books, retroactive to May 19. During the proposed 12-month moratorium, the federal government – which clearly wants to permanently ban online gaming – planned to study the issue, with a focus on the implications of a permanent ban.

Most legislation is introduced first in the House of Representatives. But the Federal Government introduced the moratorium bill in the Senate, where it had been expected to pass. Its chances in the lower house were considered less certain.

Observers said the government, led by Senator Richard Alston, the Communications Minister, could have picked up additional votes if it had been willing to compromise.

"Richard Alston was not in the mood to make any concessions at all on the floor of the Senate," Peter Coroneos, director of the Internet Industry Association, told RGT Online. "He wasn't prepared to concede anything. He was fairly provocative to the people whose support he needed."

Coroneos, whose group represents online businesses, including sports wagering firms, said the Federal Government may try to re-introduce the legislation in a few months.

"This is breathing space," Coroneos said. "We're celebrating, but we're only drinking lemonade. We're saving the champagne for later."

Peter Bridge, managing director of Lasseters Holdings, said the close call in the Senate is "a wakeup call to the industry to get themselves together." Lasseters, which has a land-based casino in the small town of Alice Springs, Northern Territory, opened Australia's first licensed Internet casino in April 1999.

Australia has been the world's leader in licensing and regulating online gaming – establishing procedures, for example, for age verification and helping to restrict betting by problem gamblers. It's the home of two online casinos and about 11 online sports and race betting sites, which are rigorously regulated, and taxed. Most Internet gaming sites elsewhere are not regulated at all, or are given only cursory examinations by the governments where they are based.

But the regulation in Australia is at the state and territory level, and it's not consistent throughout the country. Bridge told RGT Online that David Rice, the head regulator in the Northern Territory, is coordinating a meeting Oct. 27 in Darwin in an effort to find common ground among the states and territories. One thorny issue is a long-discussed plan to share online gaming tax revenues among the jurisdictions.

Also, Bridge said, the Australian Casino Association is organizing a meeting in Melbourne next week to work on common standards for land-based casinos and sports books as well as their Internet counterparts.

Australians have one of the world's highest per capita rates of expenditure on wagering. The country has thousands of slot machines, and many of its citizens are worried about problem gambling.

But Bridge and others in the online gaming business say the campaign of Prime Minister John Howard against Internet gaming is misdirected.

"The reality is that even with a ban, Australians would still have access to approximately 1,000 global online gaming sites, most of which are unregulated and do not protect players' interests," Bridge said.

"Additionally, there is no evidence that online gaming is a prominent source of problem gambling. Regulation for online gaming is stronger than that available in physical casinos. The proliferation of gaming machines in community venues is known to be the major source of problem gambling, yet there has been little action to address this issue."

Chris Downy, director of the Australian Casino Association, called Monday's defeat of the moratorium "a victory for common sense."

"This will be a confidence boost for an industry which has been plagued with indecision and uncertainty as a consequence of the Government's attempts to restrict its activities," he said.

Australian operators of online gaming sites, some of which don't even accept bets from Australia, had threatened to move offshore if the moratorium was passed. And they also had threatened a legal challenge, a fact that Alston conceded during the Senate debate.

Coroneos said that Australian online gaming operators are "only too happy" to have strict regulations. For one thing, that gives their sites credibility among players, who often don't trust the industry.

"It's a kind of bizarre situation," he said, "where you've got the states that have made quite a bit of progress in this area (of regulation), you've got industry that's very happy to comply, and suddenly in marches the Commonwealth and says 'You're moving too slow, we're going to legislate.' "

No one is counting on the Federal Government to give up its effort. But with this respite, more states and territories are expected to grant licenses. And several companies who have licenses but had been holding up on launching their sites are likely to go ahead now.

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