Club Owners: What’s The Threat Of Online Gambling To Club Revenue Streams?

Nobody can have failed to notice the rise of online gambling but where’s it going? And how much does it threaten club revenue streams?

Gambling is deeply embedded in Australian culture and we have the highest gambling participation rate in the world. Whether it’s chucking a couple of coins in the pokies at a club, placing an annual bet on the Melbourne Cup or betting regularly on roulette at a casino, it’s part of the Australian way.

Rapid advances in technology have seen Australian online casino sites expand and virtual gambling rise in popularity as more punters turn to online, mobile, and tablet betting alternatives.

Most Australian gambling laws work to protect problem gamblers and ensure responsible betting practices but it could be argued that such laws are hypocritical and not in line with other gambling laws.

In a nutshell, as of September 2017, it is currently prohibited for any online casino based anywhere in the world to provide gambling services to anyone from Australia.

The Interactive Gambling Act of 2001

While online gambling remains legal for Australians within some areas such as lotto betting and sports betting, the Interactive Gambling Act (IGA) explicitly bans online gambling operators from servicing Australians.

The original IGA was passed in June 2001 by the then Howard-government to protect the public from additional negative effects of betting. It prohibited the following:

  • Any online casino (Australian or foreign-owned) offering real-money online interactive gambling services to Australian citizens;
  • Such organisations advertising real-money interactive gambling services to Australian citizens.

These laws were directed at online casino and poker room operators but don’t specifically prohibit Aussie individuals from placing real-money bets online at such venues: “the average Australian citizen cannot be punished for signing up and gambling online.” (IGA, 2001).

Also, the IGA does not apply to Australian-owned sports betting websites (like sportsbet.com.au) or lotteries (like Lottoland or Tatts.com), provided they are associated with a land-based business.

As long as the bet takes place before the event commences, placing a wager on a sports event or online lottery is not considered to be an interactive bet and is thus perfectly legal. This is different for interactive games played online in real time, like online pokies, roulette, and blackjack.

Technically speaking, international online casinos offering their services to Australian citizens were in violation of the IGA, but the ambiguous wording of the bill allowed a grey market to flourish.

The new legislation of September 2017 clearly and completely bans offshore providers from servicing the Australian market…

The Interactive Gambling Amendment Bill 2016

The Australian Government introduced the Interactive Gambling Amendment Bill 2016, also known as the IGA Amendment Bill, as a way to close the loopholes in the original IGA that allowed offshore online casinos to service Australians.

After taking full legal effect in September 2017, offshore online casinos and offshore online poker sites can no longer accept or service Australian players, or they risk large fines and penalties. Thus, online roulette and any other form of online casino play is technically banned in Australia.

The technicality is that there is nothing in the bill that suggests any penalty for Australian residents who continue to gamble at online casinos. While most of the big casino brands pulled out, several reputable offshore operators still continue to service Australian players.

While these offshore operators risk hefty fines and punishment, there still appears to be no legal risk presented to players.

The future of online casino betting for Aussies

Gambling has always been a heavily debated subject in our country, with calls for nationwide bans on slot machines in some quarters.

The government promotes responsible gambling, supporting the notion of gaming venues partnering with counselling services to assist punters with detrimental gambling habits.

As far as online gambling goes, the Liberal government has made it clear that it wants laws tightened to block Aussies from placing real-money bets with foreign-run casinos.

Overseas operators, even though they remain largely outside of the Australian Government’s scope of authority, have already felt the effects of the new legislation, exiting the Australian market to comply with the new laws.

Addressing the threat to club revenue streams

There is little doubt that online gambling represents a threat to traditional club revenue streams.

However, it is just one of many risks that clubs need to consider in governing and managing their organisations. Risk management often seems to be handled in an ad hoc manner rather than a structured process of considering, assessing, and mitigating risks – and this needs to change.

It is important that all risks, including online gambling, are well-documented in a structured risk register and then regularly monitored to ensure that the strategies in place are effectively addressing each risk.

If you need assistance with developing a risk management process in your club, please contact the SRJ Walker Wayland team here.