Mitch Fifield (Victoria, Liberal Party, Manager of Government Business in the Senate) Share this | Link to this | Hansard source

I move:

That the committee does not insist on its amendments to which the House of Representatives has disagreed and agrees to the amendments made by the House in place of those amendments.

Nick Xenophon (SA, Nick Xenophon Team) Share this | Link to this | Hansard source

Chair, I would like your guidance. We do have some questions to ask of the minister. Is this the appropriate time to do so?

The CHAIR: Yes. We are in committee.

I just didn't want to lose that opportunity; I didn't want to blink and miss it!

The CHAIR: Please go ahead.

I would indicate, in broad terms, that my colleague Senator Kakoschke-Moore may have some questions on this, because she has worked very closely on this issue. I would be grateful if the minister could explain what these amendments do. On the record, it's a result of negotiations between various parties, including my office and that of Senator Kakoschke-Moore, in particular.

This was an amendment I moved that was passed in the chamber with the support of the opposition and others on the crossbench to deal with credit betting, a various serious issue because that can fuel gambling addiction. I understand there were some technical issues with it. I think it important that the minister explain what those amendments do. And I know that Senator Kakoschke-Moore has been forensically looking at this and has some questions in respect of it.

Mitch Fifield (Victoria, Liberal Party, Manager of Government Business in the Senate) Share this | Link to this | Hansard source

Colleagues, as Senator Xenophon has outlined, you will recall that, when the bill was last before the Senate, the Senate agreed to an amendment moved by the Nick Xenophon Team in relation to the banning of offering lines of credit. At that time, I indicated that the government supported the policy of banning the offering of lines of credit, but that it was our preference to pursue that issue via the National Consumer Protection Framework that we're developing with the states and territories. Nonetheless, the government understands that the will of the Senate is that the Commonwealth legislate this ban as part of the bill.

However, as Senator Xenophon alluded to, there were some unintended consequences that flowed from the original amendment that passed the Senate. Primarily, the drafting of that amendment captured the telephone credit betting activities of on-course bookmakers. Credit betting by small on-course bookmakers, as opposed to the large online corporate operators, has been a long-standing traditional practice at racecourses for decades. It forms an important part of the business of on-course bookmakers. The government's consultation with bookmaker associations revealed that the amendment that was passed would have had a serious detrimental impact on many of the around 500 on-course bookmakers who operate across Australia, all of whom are effectively small businesses. It's important that I acknowledge that my belief is that certainly wasn't the intent of the colleagues who supported that amendment.

The government undertook consultation on an alternative set of amendments, including with the Australian Bookmakers Association, Responsible Wagering Australia, Financial Counselling Australia and Tabcorp. I should also note that, on 27 April, state and territory gambling ministers agreed to the proposition which was put forward in the House by the government. Those consultations gave the government confidence that the government amendments, which the House of Representatives agreed to in June, will enact the spirit and intent of the original Nick Xenophon Team amendments whilst avoiding the unintended consequences.

In summary, the government amendment moved in the House will prohibit wagering operators from providing or offering credit to customers. It will prohibit operators from promoting or facilitating credit via a third party, such as small account credit contracts, also known as pay-day lenders, which was not captured in the original Senate amendment. It will provide criminal and civil penalties for contravention of the credit prohibitions—up to $675,000 per day for companies, which is higher than the original Senate amendment. It will provide an exemption for on-course bookmakers, all of whom operate as small businesses, to provide credit via telephone. It will allow a transition period of six months before the prohibition comes into effect to allow wagering operators and consumers to adjust their business and betting practices, and no time limit is placed on the recovery of debts. It will give authority to the Australian Communications and Media Authority to undertake a statutory review after three years to assess the effectiveness of these new provisions. Credit will not be permitted to be provided via online means by any wagering operator. This measure will deliver on the government's 2013 election commitment and its response to the 2015 illegal offshore wagering review to ban lines of credit being offered for online betting altogether.

I thank my Senate colleagues for their constructive engagement and cooperation with the government as we worked to develop these amendments. I particularly want to acknowledge the work of my colleague Minister Tudge who has taken primary carriage of this matter and who has worked hard to achieve the important reforms that are contained in the bill.

Nick Xenophon (SA, Nick Xenophon Team) Share this | Link to this | Hansard source

Thank you to the minister for that explanation. Again, Senator Kakoschke-Moore will have a number of questions in relation to it. Clearly, credit betting is very problematic when it comes to fuelling, accelerating and causing gambling addiction, but I understand that credit betting from on-course bookmakers—not the corporate bookmakers; the online bookmakers—is very different in terms of levels of harm and the safeguards that can be implemented with on-course bookmakers. The fact that there is that physical contact is quite different—and we acknowledge that.

Of course, I do not support credit betting at all, but I'm also trying to be pragmatic and I do not want the perfect to be the enemy of the good. Having said that, I think that a compromise has been reached. Whilst not perfect, it has been done in good faith with the government. We want to see how effective it will be and there obviously needs to be continual review for those parts of the bill that we thought should have gone further. But, for those parts of the bill that did good work in this space in terms of dealing with online gambling and dealing with problem gambling from online betting, this bill is overall a beneficial bill and that is why we should not stand in its way.

Of course, we do want to go further. I am pleased that the minister has sought the advice of Financial Counselling Australia. I launched their report a couple of years ago on the impact of online betting, which was a trigger for introducing the legislation that I introduced, and Senator Kakoschke-Moore has worked with me very closely in terms of this. So we do not stand in the way of these amendments, but we think it is important to raise some concerns about loopholes in relation to the bill and the continual monitoring that needs to take place in respect of that. Having said that, we will not oppose this bill but we think that there are some legitimate questions to ask in terms of the ongoing monitoring of this bill as to its effectiveness.

Skye Kakoschke-Moore (SA, Nick Xenophon Team) Share this | Link to this | Hansard source

Minister, I wanted to ask some questions around some of the exemptions that are provided for in the bill—in particular, the exemption that exists for where a wagering provider is not subject to these rules if they reasonably believe that their client is not based in Australia. A situation that comes to my mind could be where a customer creates an account for an online wagering provider, provides details that indicate that they are living in the US when in actual fact they're living in Australia. Can you provide the Senate with some more information about how the decision is made that the sports betting company has acted in good faith in providing credit to that customer whom they believed was outside of Australia?

Mitch Fifield (Victoria, Liberal Party, Manager of Government Business in the Senate) Share this | Link to this | Hansard source

The requirement is that the organisations have undertaken due diligence. If someone is seeking to misrepresent where they live or they're using a VPN that would indicate that they're located somewhere other than where they are, we do not believe that it's reasonable that the particular organisation is held liable for that when, after having taken appropriate due diligence, they believe that the person is not resident in Australia.

Skye Kakoschke-Moore (SA, Nick Xenophon Team) Share this | Link to this | Hansard source

Just on the subject of due diligence, I understand that at the moment a wagering provider has about 90 days in order to verify the details provided by a client as to their identity. Is the government seeking to shorten that period of time? I'm just concerned that you could have a situation where a client is accessing credit for a period of up to 90 days before they are discovered as being a resident of Australia.

Mitch Fifield (Victoria, Liberal Party, Manager of Government Business in the Senate) Share this | Link to this | Hansard source

We are looking to reduce that time frame through the National Consumer Protection Safeguard Framework, which is being worked through with the states and territories.

Skye Kakoschke-Moore (SA, Nick Xenophon Team) Share this | Link to this | Hansard source

I now want to turn to the issue of payday lenders. I am seeking some clarification in relation to what the prohibition specifically applies to. Does this prohibition relate to payday lenders offering credit for gambling purposes in general or is the prohibition against wagering services providing a referral to a payday lender, to a client, in order to obtain credit to bet with?

Mitch Fifield (Victoria, Liberal Party, Manager of Government Business in the Senate) Share this | Link to this | Hansard source

It seeks to stop referrals or promotion.

Skye Kakoschke-Moore (SA, Nick Xenophon Team) Share this | Link to this | Hansard source

What would the penalties be if a payday lender were found to have accepted a referral from a wagering provider for a client?

Mitch Fifield (Victoria, Liberal Party, Manager of Government Business in the Senate) Share this | Link to this | Hansard source

The penalties for the gambling operator, as opposed to the payday lender, are 500 penalty units for criminal and 750 penalty units for civil.

David Leyonhjelm (NSW, Liberal Democratic Party) Share this | Link to this | Hansard source

I have a few remarks on this revisiting of the Interactive Gambling Amendment Bill. The Senate is again fiddling with it. The bill seeks to ban in-play gambling, in-play sports betting, with Australian providers and is operating under the deluded idea that other countries will somehow respect Australia's prohibition approach, even when they don't agree with it themselves and their preferred approach is to regulate, monitor and tax. I am led to believe that Australia is even contemplating taking a leaf out of China's book by IP blocking if that does not work.

This is despite the evidence about online poker—which is my primary concern in relation to this legislation and is again caught up in this ban. Online poker is less harmful than other services that are allowed under the Interactive Gambling Act, like online sports betting. This was confirmed at a recent hearing of the inquiry into online poker which I established. Online poker is a game requiring considerable skill and results in very little problem gambling. Poker can, of course, be played in pubs, clubs, casinos and private homes but not online, unless on an overseas site, where consumer protections are far less utilised. This is absurd. I call on the government and other senators to commit to enacting the inquiry's recommendations in relation to online poker when the committee reports next month.

Mitch Fifield (Victoria, Liberal Party, Manager of Government Business in the Senate) Share this | Link to this | Hansard source

Through you, Chair: Senator Leyonhjelm, I am well aware of your view on this matter and of the inquiry that is underway. The only comment I would make is that this legislation is, in part, seeking to give effect to the original intent of the IGA, which did not envisage that poker would be legal in the form that some people had the view that it was. So part of the purpose of this legislation is to make clear the original intent of the original legislation.

Skye Kakoschke-Moore (SA, Nick Xenophon Team) Share this | Link to this | Hansard source

I want to go to the review that I understand will be conducted into the operation of this legislation in three years time. Minister, will the review also be looking into the amount of credit that continues to be provided by those on-course bookmakers—and I understand you have advised the chamber there are approximately 500 of them. Will the review consider how much credit has been provided by those on-course bookmakers as part of your analysis of the effectiveness of this legislation?

Mitch Fifield (Victoria, Liberal Party, Manager of Government Business in the Senate) Share this | Link to this | Hansard source

Thanks, Senator, through you, Chair. There is nothing that would prevent that being in the scope of the review.

Mitch Fifield (Victoria, Liberal Party, Manager of Government Business in the Senate) Share this | Link to this | Hansard source

I'm having a sense that this is drawing to a conclusion, so I thank colleagues for their constructive engagement in relation to the amendment that was moved in the House, and it looks like will be supported by the Senate. We are on the same page, particularly in relation to the issue of credit betting. It was always the government's intention to address that. We're proposing it, through the framework, with the states and territories, but we do recognise the will of the Senate on this matter, and the legislation in its current form will give effect to that. So, thank you, colleagues, for the constructive and positive engagement.

Linda Reynolds (WA, Liberal Party) Share this | Link to this | Hansard source

The question is that the motion as put by the minister is agreed to.

The TEMPORARY CHAIR: The question now is that the resolution be reported.

Question agreed to.

Resolution reported; reported adopted.