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Nov 3, 2011

Offended by 'nanny state', Coalition wants more censorship on gambling

The Coalition has proposed greater internet censorship as part of its counter-proposals on gambling reform. The US experience shows it doesn't work.


After complaining that proposed mandatory pre-commitment pokies reforms were “nanny statism”, the Coalition has called for comment on ways to strengthen internet censorship and restrict advertising in its own gambling reform paper.

The discussion paper, launched yesterday, invites comments on a voluntary pre-commitment scheme, more counselling services for problem gamblers and a review of exclusion programs. It also suggests the current bans on online gambling — via the Howard government’s 2001 Interactive Gambling Act — be “strengthened”:

“The Coalition does not support any relaxation of these laws. However, there are ongoing community concerns that the laws are not adequately enforced and that Australians are able to access online casino style games and poker machine style games. The risk for users of online gaming sites is that they are offshore (and therefore no guarantee of probity, return on funds won, authenticity), can be accessed by minors and problem gamblers with ease and do not operate within the checks and balances (such as counselling and self-exclusion) that are outlined in this paper. In addition, online gambling sites do not pay tax in Australia and invariably do not employ Australians, unlike the broader domestic gambling industry. The Coalition is keen to receive input about how the current laws might be further strengthened to limit the risk of online gambling access to Australian consumers.”

The Howard-era laws purport to ban the provision of the quaintly-named “interactive gambling services” to Australians. As the Productivity Commission showed in its gambling review, the laws are a dead letter. The PC found Australian online gambling via foreign sites had “grown strongly” since the laws were introduced (as it has in other countries) and — as the Coalition admits — therefore Australian gamblers use poorer regulated sites and Australian governments miss out on tax revenue because of the ban. The PC called for the ban to be lifted in favour of “managed liberalisation.”

The PC also investigated whether it was feasible to implement the IGA more effectively. It concluded the only way to do so would be to add identified gambling sites to the government’s proposed internet filter. Even then, of course, the filter can be easily bypassed by anyone with a modicum of IT knowledge.

Many US states and the US government have similar anti-online gambling laws and have gone in far more extreme directions in an effort to make them work, including bans on financial institutions transferring money to them. In September, the state of Kentucky tried to seize several gambling-related domain names, an approach also tried by the FBI. The US has also repeatedly indicted foreign nationals for operating gambling sites or related financial transactions, including an Australian citizen. Online gambling in the US has been similarly unaffected by even these draconian laws. Analysts estimate the US online gambling market accounts for more than a quarter of the global market and is worth $7 billion a year.

The Coalition also invited comments on a proposal to ban most gambling venues, including online venues, from offering credit to gamblers, which would also be a dead letter for foreign-based gambling sites, and banning the promotion of live odds during broadcasts of gambling-related events.

The paper also alludes to other mechanisms for online regulation in its final proposal, that lawmakers “cooperate with financial institutions” in the enforcement of online gambling bans. Putting aside that it’s usually financial institutions that have to cooperate with lawmakers, the proposal appears to raise the possibility that financial institutions could be required to somehow prevent payment by Australians to overseas gambling sites. As the PC noted in considering a separate proposal to ban credit card usage for gambling, this would be easily circumvented by mechanisms such as PayPal.

Given the PC’s conclusions about the difficulty of “strengthening” the current online gambling ban, it appears the only other means of doing so open to the Coalition would be to embrace the US approach of trying to seize domain names and extradite foreign nationals for operating sites. However, as the US experience suggests, even these draconian attempts have failed to stop people gambling online.

Either the Coalition isn’t serious about gambling reform, or it has failed to do the most basic homework on why governments usually fail when they want to “regulate the internet”.


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21 thoughts on “Offended by ‘nanny state’, Coalition wants more censorship on gambling

  1. Jim Reiher

    the coalition want to stop money going overseas where Australian workers dont get anything, and non-Australian companies and individuals make the profits…

    okay… lets talk about free trade…..


  2. Jim Reiher

    and dont get me started on the pathetic misuse of the term “nanny state”. It should be a banned phrase frmo any intelligent discussion.

    It is only ever used of policies you dont want, but quickly dropped from discussion when you want to introduce your own raft of policies that interfer with people’s freedoms. The liberals cry out against “nanny state regulation” and yet they gave us the Northern Territory Intervention with income management…. probably the largest act of “nannystateism” ever inflicted on people.

    And the Liberals in Vic want to fine you for swearing in public….


  3. klewso

    “Hip o’ crit” – isn’t that a joint on the Sunday possum?

  4. klewso

    Sorry “Coal-ition Cook Book”, here it is “Hip o’ critter :- Take your road kill and joint it ….”!

  5. David Allen

    Just watched QT today and I’m begiining to suspect that the coalition are just starting to form themselves into a Gordian knot. Perhaps Malcolm will be able to cut it?

    Bold prediction: Malcolm will be leader of the coalition before Kevin becomes leader of Labor.

  6. David Allen


    I have to confess – you got me.

  7. David Allen

    But now you’ve really depressed me as I ponder the front bench, even under Malcolm.

  8. Jim Reiher

    David: I reckon if Kevin is moved to the PM spot, the libs will be forced to find a new leader who can match him… and that does not leave many options. The only problem for Kevin and Malcolm is that neither of them seem to have the numbers in their own party.
    Pity hey….

  9. davidk

    The libs don’t want profits going overseas, then why do they oppose the MRSPT?

  10. Arty

    DADIDK: What the libs want is eternal government. Everything else is elaborate works of fiction.

  11. Venise Alstergren

    DAVID A: If possible Malcolm Turnull is the biggest liar in Parliament. I can recite you chapter line and verse of one of his efforts I happened to see, but would only do it if you specifically requested. And, what about the Godwin Grech affair? The alternative is Tony Abbott, a profound liar and ruthless Catholic who would overturn all bills that have been passed-as in the Northern Territory where his illustrious predecessor (I joke) John Winston Howard overturned the NT euthanasia law. And I think Turnbull’s arrogance has caused many, many of his own party to loathe him.

    Can you really see Kevin Rudd making another shot at the top shop? Sigh, I hope your wishes come true. All I can do is suffer and remember the Chinese saying to people they hate. “”May you live in interesting times.””.



  12. David Allen


    I won’t argue with you.

    I will add though, that of the opposition front bench I can see no one other than Turnbull who has the intellectual capacity to be Australia’s PM. Perhaps there’s someone lurking on the back bench? One can only hope.

    I’m a Queenslander but I wouldn’t be happy to see Rudd back as PM.

    It’s a diabolical problem indeed.

  13. zut alors

    I have no doubt Tony Abbott genuinely believes he can regulate internet gambling…because he doesn’t actually understand what the internet is.

    Turnbull is probably still attempting to explain the concept of peak speed to him – g0d only knows Kerry O’Brien had no luck giving a quick tutorial.

  14. Venise Alstergren

    DAVID A: Certainly agree Turnbull has the intellectual capacity to handle the job, absolutely. One of my main gripes about Kevin Rudd-I did say one of them is his fervent belief in religion. This combined with the huge numbers of professional Catholics, mainly in the Coalition, in Parliament is deeply worrying.

    ZUT: As usual you are witty and pithy. Excellent.

    Your admirer


  15. AR

    As was demonstrated with WIKILEAKS, the major credit card companies are easily able to shut off payments so it would simplicity itself to legislate the same for transfers from Oz to the gambling sites. It wouldn’t stop every cent but would make a hell of a dent for stroke of the pen, bipartisan (HA!) consensus & action.

  16. Peter Ormonde

    Ah yes let’s all wander off into policy oblivion with this absurd King Kanute notion of “regulating” the internet…

    Must admit though I do find all this “pre-commitment” gadgetry impenetrable and unnecessarily complex. I find myself agreeing with Tony Windsor – again – that a simple $1.00 limit has merit. And coupled with some sort of buy-back scheme where the actual number of pokies was dramatically reduced – this would actually achieve a decent outcome I think.

    It’s not just money that is frittered away on pokies – it’s time. Sad lives get wasted sitting surrounded by noise and beer… a curiously anti-social social life. Pokie addiction isn’t just gambling – it’s an indicator of deep depression and isolation.

    Make it take a lot longer to lose less. It would make a good start I suspect.

  17. Peter Ormonde


    Another approach – not incompatible with the above – would be to stop the machines behaving like they do. These gadgets are DESIGNED by psychologists and others to keep you pouring money down the slot hour after hour.

    So slow them down, no more bells and whistles, no more little hooks and cues, and MOST IMPORTANT – make them silent (and even more boring) … strip out all the little tricks the industry uses to make them “fun”

  18. Venise Alstergren

    PETER O: “”with this absurd King Kanute notion of “regulating” the internet…””
    I could not agree with you more.

    Would it involve re-jigging all the machines, or is this relatively easy? I ask because that’s always the first gripe people come up with. Hey thousands of gamblers lose all their money. WTF does it matter if, for once in their lives, the gambling industry might do something positive for the punters? I know, pigs can’t fly….

  19. AR

    PO & VA – it was reported some weeks ago that $1 limits were the first choice of Wilkie & Xenophon but that was turned down flat by government on industry advice.
    As for the flashing lights & bells mesmerising the unfortunate addicts, what about a return to the old fashioned mechanicals that gave the name “one armed bandits”?
    Maybe they could be marketed as fashionably retro – good exercise too!

  20. Peter Ormonde


    An excellent concept integrating gambling and a workout! I will spend the afternoon in the shed welding up a prototype – hybridising a bandit and a nautilus machine… perhaps a pedal powered pokie for the over-50s. No pain – no gain!!!

    I think the Board of the Woolibuddha Bowlo will jump at it.

    Gosh … imagine the industry not liking a $1 limit! Who would have thought? Sounds like an excellent reason to implement it to me.


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