Despite the hand-wringing and gnashing of teeth from anti-gambling types, the Department of Broadband’s review of the Interactive Gambling Act is hardly the floodgates-opening set of recommendations it is being portrayed as. In fact, in some areas it would actually seek to impose even more meaningless regulation on a sector thriving in spite of efforts to ban it.

The IGA is a useless act, a dead letter emblematic of the Howard government’s loathing of new media that purports to regulate the internet and which has failed miserably. Australians are spending nearly $1 billion a year gambling online now and that’s likely to continue to grow. Everyone’s the loser from this: the Australian government, which is driving revenue offshore, local businesses which could attempt to compete with offshore-hosted gambling sites if allowed, and gamblers themselves, forced to use unregulated sites, often based in jurisdictions with dodgy legal structures.

The advocates of maintaining this profoundly flawed policy are many. It’s not just the nanny state types and church groups that want it retained; you’ll never guess, but local clubs want the ban maintained as well — like local retailers, they don’t like online competition, you see.

The review doesn’t recommend any removal of the ban except in relation to one area, which we’ll get to. Instead, it actually proposes to increase the level of regulation on online gambling services that are permitted, by imposing a harm minimisation code on them and making it a requirement of operating in Australia that they adhere to it. The ban would be maintained and overseas providers who currently offer services that are legal under the IGA would be required to sign up to the Australian code in order to not be made illegal.

The review also recommends strengthening measures against overseas companies that offer online gambling services that breach the IGA, like adding directors to Australia’s Movement Alert list and sending warnings to companies. But the review is at least realistic about the chances of successfully prosecuting people responsible for offshore-based websites, which are zero to none unless they’re planning an Aussie holiday.

Like the Productivity Commission before it, the review considered whether to try to use the financial system to block gambling that breaches the IGA by preventing credit card payments to certain sites, but figured it was too hard and too easily-circumvented. It did however recommend that banks be allowed to voluntarily decide to block payments by giving them safe harbour provisions. Given that Visa and Mastercard both block payments to WikiLeaks now without the need for any “safe harbour”, or for that matter any relevant regulator giving a damn, that proposal looks a little strange.

The one acknowledgement the review really gives to the comprehensive failure of the IGA is to propose a trial in which, subject to certain restrictions, online power be legalised, enabling Australians to play online on sites that meet certain criteria, including that they stop offering non-poker online gambling. Poker forms about a third of non-IGA authorised online gambling revenue; online slot machines form most of the remainder. Given the conditions, the proposal appears designed to enable an Australian site to operate rather than make it attractive for offshore sites to offer poker under Australian conditions. The review proposes that the trial be evaluated after five years.

It’s a sensible step in the right direction of regulation rather than banning, but floodgates it ain’t. In fact the review looks almost bizarre in identifying how comprehensively the IGA has failed and yet proposing to do virtually nothing about it. The manner in which anti-gambling advocates have attacked the report illustrates how hard it is to have a rational debate about gambling in th face of all evidence.

And bear in mind of course that the government may not even accept the recommendations of the review. It was, after all, merely put together by departmental officials.

If nothing changes, of course, then online gambling will continue to surge in popularity, and no one here will get the benefits of a more rational approach.

Peter Fray

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