Alan Tudge (Aston, Liberal Party, Minister for Human Services) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

Online gambling has grown with consumers moving away from traditional gambling products to betting online using smartphones, tablets and other digital devices. In 2014, $2.4 billion was spent on online gambling by Australians—which was double the amount 10 years earlier. Australia's high rate of gambling expenditure and strong adoption of digital technologies makes it imperative that there is a strong and enforceable regulatory framework to protect Australians from the adverse effects of illegal online gambling services.

To support this objective, in April this year, the government announced it would implement 18 of the 19 recommendations in the 2015 illegal offshore wagering review in a three-staged process.

The Interactive Gambling Amendment Bill is the first stage of the government's process to implement the recommendations in the review. It will complement the other stages to establish a national consumer protection framework to minimise problem gambling and consult on other disruptive measures to stop offshore operators from providing illegal interactive gambling services to Australians.

Key findings of the illegal offshore wagering review

The review found that the amount of money being spent on illegal wagering services could be as high as $400 million annually with a further $100 million in lost taxation revenue and product fees. Previous estimates found the total amount of money spent on all illegal interactive gambling services was close to $1 billion annually.

Offshore gambling has detrimental effects on the Australian wagering, racing and sporting industries, problem and at-risk gamblers, consumers and government. Offshore gambling operators do not pay Australian taxes, racing or sporting fees; they do not share information regarding suspicious betting activity with law enforcement or sporting bodies, which risks the integrity of Australian sport; they offer gambling services prohibited under Australian law; they can be used for money laundering and other criminal activities; and they provide minimal to no harm minimisation and consumer protection controls, which poses a threat to problem and at-risk gamblers.

The review showed that the rate of problem gambling is higher among interactive gamblers compared to gamblers more generally—2.7 per cent of interactive gamblers are problem gamblers, compared to 0.9 percent of all gamblers. The devastating effects of problem gambling are felt by not just the gambler but also his or her family, friends, colleagues and the community.

The review concluded that the aim of governments should be to reduce the scope of illegal offshore gambling activity and control the associated harms through a range of disruptive and deterrent measures and strong enforcement of regulation.

Minimal enforcement of the Interactive Gambling Act

The key piece of legislation to protect Australians against illegal online gambling services is the Commonwealth's Interactive Gambling Act. This act prohibits the provision and advertising of prohibited interactive gambling services to persons in Australia.

Stakeholders informed the review that the existing approach to enforcement of the Interactive Gambling Act was insufficient to deter offshore operators from providing prohibited online gambling services to Australians. There have been no prosecutions under the Interactive Gambling Act since its inception in 2001, despite a considerable number of complaints made by Australians in relation to illegal online gambling services.

The borderless nature of the internet enables Australians to access hundreds of illegal online gambling sites on their computers and smartphones. Stakeholders assert that offshore operators ignore the provisions of the IGA because they are not well enforced.

Criminal prosecution is considered likely to be unsuccessful or ineffective due to the competing priorities of the Australian Federal Police, uncertainty around the legality of services under the Interactive Gambling Act, evidence requirements and the offshore location of gambling operators.

Some of these challenges were highlighted in 2015 when a number of Australian licensed wagering operators launched 'click to call' in-play betting services. The ACMA assessed these services as potentially a prohibited interactive gambling service and referred the matter to the Australian Federal Police for investigation. The AFP declined to investigate due to competing priorities and ambiguity around the legality of these services under the Interactive Gambling Act.

The bill sets out to address these challenges. It will clarify the law regarding illegal online gambling services and empower the ACMA by strengthening the enforcement mechanisms under the Interactive Gambling Act.

Reforms to the Interactive Gambling Act

The bill will prohibit a person providing regulated interactive gambling services to Australians unless the person holds a licence under the law of an Australian state or territory. This amendment will clarify the licensing requirements for interactive gambling services in Australia and will provide a simple to establish key criterion for enforcement agencies when investigating whether to take action against unlicensed services. It is expected that reputable gambling organisations will obtain a licence in Australia or cease providing illegal services.

The reforms will introduce a civil penalty regime to be enforced by the ACMA which will allow the ACMA to be responsible for the entire complaint handling process from receipt to enforcement. The ACMA will be able to issue formal warnings and infringement notices and seek civil penalties and injunctions. This amendment will allow for a quicker and more focused response as formal investigation or prosecution processes will not depend upon the priorities of other agencies.

These penalties will also apply to any person who supports the provision of illegal interactive gambling services to Australians. Criminal offence provisions have been retained in the Interactive Gambling Act to allow the ACMA to refer complaints to the Australian Federal Police for more serious cases.

Interactive Gambling Act to allow the ACMA to refer complaints to the Australian Federal Police for more serious cases

The bill will prohibit 'click to call' in-play betting services. These services allow consumers to place a large number of bets in a short period of time, which can lead to serious gambling problems. The government is committed to closing down these services as they undermine the intent of the IGA to limit the scope of problem gambling in Australia.

The reforms will enable the ACMA to notify the Department of Immigration and Border Protection of the names of directors or principals of offending gambling services so they can be placed on the Movement Alert List and any travel to Australia can be disrupted.

These enforcement actions will be combined with a number of measures to build relationships with international regulators and raise awareness of Australian gambling laws and the risks associated with illegal gambling services.

Firstly, the ACMA will be able to notify international regulators of information relating to interactive gambling services. The offshore location of many gambling operators makes it difficult to enforce the IGA. Establishing productive relationships with international regulators to raise awareness of Australian gambling laws and receive assistance in any enforcement actions will assist the efforts of the ACMA to enforce the IGA in relation to foreign entities.

Secondly, some offshore gambling websites deliberately target Australian consumers by using Australian imagery and colloquialisms. Many consumers are unaware that these sites are not licensed in Australia and that there is limited legal recourse if they run into any difficulties obtaining winnings or deposits from these operators. The bill will establish a register to be published on the ACMA website to raise awareness of wagering services that are licensed in Australia to ensure that persons looking to gamble will not inadvertently use an illegal offshore site.

The combination of clearer legislation, stronger enforcement measures and awareness raising activities will assist in ensuring Australians are protected from illegal gambling services.

Other related amendments to the Interactive Gambling Act

The bill contains related amendments to complement the ACMA's increased enforcement role, including to simplify and streamline the complaints handling and investigation process to remove mandatory requirements to refer matters to the police and enable the ACMA to handle the entire process from receipt of complaints to enforcement, similar to its complaints handling and enforcement role in relation to other legislation. The bill also contains provisions to clarify the legality of services provided in licensed gambling and wagering venues and for the development of a legislative instrument to determine what constitutes a sporting event for the purposes of in-play betting under the IGA.

As mentioned, this bill is the first stage of a three stage process the government is taking to implement the recommendations in the review.

The government is working with state and territory governments to establish a national consumer protection framework. It is imperative if we are to protect Australians from offshore gambling providers, we must ensure that proper protections exist in our own industry. The government is also consulting with internet service providers and financial payment organisations on technological options to further disrupt the access of illegal offshore gambling services.

Conclusion

For too long, the Interactive Gambling Act has struggled in its role of keeping Australians, in particular problem and at-risk gamblers, protected from the risks of illegal online gambling services.

A combination of clearer laws, an active regulator and stronger enforcement measures will send a clear message to operators that Australia is serious about compliance of its gambling laws. Whilst there will remain practical and legal challenges in prosecuting overseas entities, these measures are expected to reduce the provision of prohibited interactive gambling services to Australians.

I would like to thank the Hon Barry O'Farrell for leading the review and the many stakeholders across the wagering, racing and sporting industries, academia, responsible gambling organisations, consumers and government who provided their views to inform the development of this bill.

I commend this bill to the House and look forward to implementing the next stages of the government's response to ensure Australia has a strong and enforceable regulatory framework for online gambling.

Debate adjourned.