GGRAsia – Australia to review ‘illegal’ offshore gambling services

Australia to review ‘illegal’ offshore gambling services

Sep 07, 2015 Newsdesk Latest News, Top of the deck, World

Australia’s Minister for Social Services, Scott Morrison, on Monday announced a review of what he referred to as “illegal” offshore online wagering available to the country’s consumers.

“According to the Australian Institute of Family Studies online gambling is a AUD1.6-billion [US$1.1-billion] business in Australia with 60 percent of this revenue going offshore to more than 2,000 sites beyond the reach of our regulators and tax collectors,” Mr Morrison said, as quoted in the release.

“Unlike Australia’s licensed operators, overseas agencies don’t contribute product fees to racing and sporting bodies, do not comply with Australia’s legal system and are not obligated to monitor and report suspicious betting activity,” the minister added.

The statement said that research by the institute indicated problem gambling rates among interactive gamblers have been assessed as at three times higher than problem gambling rates for non-interactive gamblers. The ministry added that more than 400,000 Australians, “mainly men”, are considered to have “gambling problems”.

“These are not arguments for banning interactive gambling but cases for common sense to drive the development of more effective measures to negate, wherever possible, the adverse social and economic impacts of these new and growing forms of gambling,” said Mr Morrison.

The review will be conducted by former New South Wales state premier, Barry O’Farrell.

The statement, on Mr Morrison’s ministerial website, didn’t specify what actions might be taken with regard to providers of offshore online gambling targeting Australian consumers.

“I have deliberately left the terms of reference broad to ensure former Premier O’Farrell can look at everything he needs to, with no preconceived notions,” Mr Morrison said in Monday’s announcement.

It added that consultations with representatives from the horse racing industry, professional sports and wagering organisations, state and territory governments, and community groups would start “in coming weeks”. There will also be a call for public submissions.

The review’s final recommendations are expected to be provided to the Australian federal government by December 18.

Research data

According to research compiled independently by Monash University in the Australian state of Victoria and published at the end of May 2014, the amount each Australian gambler spends on average domestically was up to three times higher than the spend of domestic gamblers in Canada or England in the United Kingdom during the period of the study. Gaming activities available in Australia include betting on poker machines in local parlours and on online and offline sports betting as well as casino wagering.

U.K-based Global Betting and Gaming Consultants said in a report issued in July that Australia was the fifth largest casino gambling market in the world in 2014. The country’s casino market had gross gambling yield – defined as revenue paid by the customers, minus paid winnings – equivalent to US$4 billion, estimated the consultancy.

David Green, a lawyer specialising in the gaming industry and a former gaming regulator in South Australia, told GGRAsia by email regarding the Australian federal government’s announcement of a review of offshore online gambling: “I suspect this is more about protecting Australia’s corporate bookmakers and online site operators, and Australia’s tax base, than it is about protecting the Australian public. The tax base in particular is a politically sensitive issue, given multinationals’ transfer pricing arrangements have often left the Australian Treasury clutching at straws when it comes to collecting its supposed fair share of tax revenue.”

Transfer pricing is a reference to the price at which divisions of companies; particularly multinational companies; do business with each other. Such companies sometimes seek to pay tax on their business activities in a lower-tax jurisdiction than the one in which a particular set of profits was realised.

Mr Green added, regarding Australia’s review of online gambling, and referring to a new land-based casino project in Sydney, New South Wales, by Crown Resorts Ltd: “It’s interesting the inquiry is being run by Barry O’Farrell, who was premier of New South Wales when the unsolicited Barangaroo tender was promoted by Crown. Proliferation of terrestrial gaming didn’t seem to greatly concern him then; why should online proliferation be of such interest?”

(Updated at 9.50am, Sept 8)