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Hot Day Down Under: Australian Territory Issues New Online Licenses, Federal Government Reacts with Moratorium

Federal leaders reacted angrily, with two ministers saying the government will impose a 12-month moratorium. Although a law declaring a moratorium has not been passed or even drafted, the ministers say it will be effective from today.

The new licensees are Tattersalls, which is based in Victoria, and the ACT TAB, which is owned by the territory and based in Canberra.

Details on what each company plans to do were not available. But it's believed that Tattersalls will open an online casino and the ACT TAB will open an online sports book.

Tattersalls makes no mention of the license on its Web site, www.tatts.com. In the "Australian Gambling Book," published in March by CIBC World Markets, analyst Robert Gee said the privately held Tattersalls "is planning to cover all gaming and wagering products via the site with an international focus."

Gee also said the site would probably be developed "through alliances with other major brand names." He called Tattersalls "arguably the second largest gaming business in Australia, behind Tabcorp."

The ACT TAB provides totalisator betting services for race tracks. It also sells lottery and keno tickets. The CIBC report said the ACT TAB recognizes the need to pursue "opportunities in the areas of sports betting and the Internet."

Only one virtual casino, Lasseters Online, is licensed and operating in Australia. But 11 Internet race and sports books are licensed and operating in the country, some since 1996.

Citing concerns about problem gambling, Prime Minister John Howard's government has been trying to sell the states and territories on a moratorium on online gaming licenses. Howard prefers an actual ban, however, not just a moratorium.

Last month, most of the states and territories rejected the moratorium.

In Australia, as in the U.S. and Canada, gambling regulation is generally left to the states and territories. But when it comes to gambling on the Internet, Howard's government proposes to use federal power over telecommunications laws to enforce a ban.

After the ACT's granting of the new licenses, the federal government decided to impose a moratorium regardless of the wishes of the states and territories. Senator Richard Alston, Minister for Communications, the Information Economy and the Arts, and Senator Jocelyn Newman, Minister for Family and Community Services, issued a joint statement Friday afternoon.

"The Commonwealth remains disposed to banning interactive gambling," they said. "However, the Commonwealth has invited the States and Territories to cooperate with the Commonwealth in pursuing a thorough investigation of the feasibility and consequences of such a ban."

The two ministers also invited the states and territories to "put forward their views on the nature and scope of the moratorium." Just in case the states and territories don't get it this time, the ministers informed them that a moratorium law "would apply with effect from today."

Newman blasted the ACT government for issuing the new licenses.

"I think it's sick," she said on ABC Radio, according to today's Sydney Morning Herald. "They're not content to be the pornographic capital of Australia, they now want to be the greed capital of Australia, with a willful determination to keep their eyes shut to the serious implications of what they're doing."

But ACT Treasurer Gary Humphries, the newspaper said, told ABC Radio that Internet access could not be stopped but could be regulated.

"We believe it is important in protecting gamblers, particularly problem gamblers, from unscrupulous practices, that we have a strong, sound gambling regulatory regime in the ACT that would ensure that those who register here to operate services are of a high standard," he said.

"Do any of us imagine that by not regulating Internet gambling we're going to prevent people accessing gambling on the Internet?"

In response to the statement from Alston and Newman, David Ohlson, general manager of Lasseters Online issued a statement, which said in part:

"We will wait to see the detail of the legislation proposed by Senator Alston and Senator Newman today, but we are very concerned about the direction they are taking through their stated orientation towards a ban. This tends to suggest the federal government is continuing to ignore the risks of unregulated online gaming and the benefits of government licensed online gaming. . . .

"It is ridiculous that under the proposed moratorium, Australian players can access Australian online gaming operators who are licensed offshore but offer little more control than a rubber stamp. But the sites that have invested heavily in player protection are victimised and prevented from offering a safe alternative. . . .

"All issues in relation to problem gambling can be addressed, and the risks minimised, through regulation. The level of control is actually greater than is currently possible in physical venues. Regulation is the only way to protect Australian players and minimise the risk of problem gambling. . . .

"It is important to recognise that the moratorium is not yet law and there is certain to be a lot of discussion before this legislation is passed."

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