GAMING & LEISURE Alert: December Bumper Industry Update

1 December 2015


Nick Xenophon introduces bill to reform sports betting in the Interactive Gambling Act 2001

On 24 November, Independent Senator Nick Xenophon introduced the Interactive Gambling Amendment (Sports Betting Reform) Bill 2015 into the Senate. A long-time advocate for gambling reform, this is not the Senator’s first attempt to amend the IGA, with an earlier attempt to reform the IGA in respect of virtual credits being made in 2013.

Citing the recent Financial Counselling Australia report into the impacts of uncontrolled sports betting the Bill proposes a number of amendments that aim to reduce the harm caused by sports betting, while limiting the impact on recreational gamblers. The amendments would see providers of wagering services on horse racing, harness racing, greyhound racing and sporting events (Wagering Providers) subject to a number of prohibitions where their services are provided by way of the internet.

Proposed measures include:

  • Prohibiting Wagering Providers from offering individuals credit to use their services or inducing or attempting to induce (or causing another person to do induce or attempt to induce) an individual to use their services;
  • Prohibiting Wagering Providers from advertising/authorising advertising of their services during a G classified television program or a television broadcast of a sporting event;

  • Imposing strict requirements on Wagering Providers when creating an account for a person, including providing pre-commitment options and protections;

  • Establishment of a National Self Exclusion Register; and
  • Establishment of an Interactive Gambling Regulator.

The Bill has been referred to the Senate Environment and Communications Legislation Committee, which is expected to provide a report by 12 May 2016.

Review into Illegal Offshore Wagering Operators

In early September 2015, the Federal government released terms of reference for a review into the impact of illegal offshore wagering on both Australian wagering businesses and consumers. The Review is being led by former New South Wales Premier, Barry O’Farrell.

Broadly, the Review is examining:

  • the economic impacts of illegal offshore wagering on legitimate Australian wagering businesses;
  • international regulatory regimes or other measures that could be applied in the Australian context;
  • technological and legislative options available to mitigate the costs of illegal offshore wagering; and
  • the efficacy of approaches to protect the consumer.

Submissions to the review have been made by companies and industry associations including Tabcorp, the Australian Hotels Association (AHA) and the Australian Wagering Council. The Review is expected to provide its report to the Minister of Social Services by 18 December 2015.

Restrictions on gambling advertising

New South Wales to ban advertising on live-odds betting

Earlier this month, the NSW government announced that from 1 March 2016, there would be a prohibition on advertising live-odds betting in NSW. Whilst the text of the draft prohibition is yet to be released, the ban will apply to sporting fixtures with a duration of less than four hours. The primary cited aims are to reduce the harms of problem gambling and ensure the integrity of sports betting. 

The NSW government has also announced that it will expand the current prohibitions on advertising inducements to gamble. Currently, the prohibition only relates to the offering of any credit, voucher or reward as an inducement to gamble or to open a betting account. Whilst the proposed wording is not yet known, it is understood the prohibition will be expanded to capture all types of inducements. This follows a number of recent prosecutions by the NSW Office of Liquor, Gaming and Racing (OGLR) under the existing provision.

Development of Australian Association of National Advertisers (AANA) Wagering Advertising & Marketing Communications Code

The AANA is currently conducting a consultation process into the creation of a mandatory, self-regulated code for wagering advertising and marketing. The AANA is a national body representing the interests of Australia’s largest corporate advertisers.

The Code will be designed to ensure wagering advertising and marketing is undertaken in a socially responsible manner and is compliant with the law. The discussion paper issued by the AANA notes that the Code must capture advertising and marketing across traditional and emerging platforms. The Code will also need to ensure that the restrictions do not adversely impact Australian wagering operators by encouraging offshore wagering providers (not subject to the Code) to target Australian customers.

Submissions to the AANA close on 18 December 2015.

Updated Commercial Television Industry Code of Practice

Free TV Australia has recently released an updated Commercial Television Industry Code of Practice, which will come into effect from 1 December 2015 following the Australian Communications and Media Authority (ACMA) agreeing to register the updated Code.

No material changes are proposed to the restrictions on the promotion of odds and commercials relating to betting or gambling during live sporting events. The restrictions on airing commercials offering promotion of odds during live sporting events do not apply to horse, harness or greyhound racing.

The restrictions on commercials relating to betting or gambling (i.e. any distinct promotional reference to a betting or gambling organisation that provides generic information about that organisation’s brand, business or service) have been expanded to prohibit  the commercials being broadcast during any program between 5am and 8:30pm where that program is principally directed at children.

NSW Wagering Tax Parity

After a lengthy campaign by the NSW racing industry, the NSW Government has introduced legislation to reduce wagering tax imposed on bets placed in NSW by way of both totalisators and fixed odds to the same rate as Victoria. This reduction will take place over a period of five years, starting from 1 July 2015. The reduction aims to assist in efforts to make NSW the predominant racing state in Australia. It is estimated that the tax reduction will result in up to an additional $260 million flowing into the industry over the 5 year period.

South Australian ‘Place of Consumption’ Tax

The South Australian government is no longer proceeding with its plan to introduce a ‘place of consumption’ tax for online wagering operators. Following the lead of the UK, the ‘place of consumption’ tax had been proposed in February 2015 as part of a broader review into the state’s tax system and was focussed on addressing the perceived tax disadvantage suffered by land-based operators. Instead, the South Australian government has flagged in its response to the review that gambling taxes are to be considered as part of the national tax reform process.

Victorian pre-commitment regime

‘YourPlay’, the Victorian statutory voluntary pre-commitment system, goes live on all gaming machines state-wide on 1 December 2015.

A key aim of the system is to promote responsible gambling and reduce the harm that is associated with problem gambling. YourPlay will allow customers to set (and better track) time and/or money limits for the playing of gaming machines by way of a player card inserted into the gaming machine. This can be used alone and anonymously, or in conjunction with a venue loyalty scheme.  Once a player reaches a set time and/or money limit, the player will receive a notification and be given the option to stop or continue playing. If the player decides to continue, YourPlay will still track the amount/time spent.

Recent regulatory action

In-play betting

The Australian Federal Police has announced that it will not investigate the legality of ‘in-play’ betting products offered by sports betting operators in Australia, noting the matter was not accepted for further investigation under its case categorisation and prioritisation model. The ACMA had referred complaints on the product to the AFP in August on the basis that it was breaching the prohibitions on in-play betting under the Interactive Gambling Act 2001 (Cth).

Anti-money laundering

In July 2015, the Australian Transaction Reports and Analysis Centre initiated proceedings in the Federal Court of Australia against three Tabcorp group companies, alleging over 100 breaches of the anti-money laundering legislation. Tabcorp is fighting the allegations, and filed its defence to the proceedings in October 2015. The hearing is expected to run for four weeks when it is heard in September 2016.

Misleading and deceptive conduct

In September 2015, Bet365 was found by the Federal Court of Australia to have engaged in misleading and deceptive conduct. The action was brought by the Australian Competition and Consumer Commission and related to promotions and advertising of $200 free bets to new customers. It was held that customers would be deceived into thinking the bets were free, when in fact there were a number of conditions that had to be met before the money was able to be withdrawn.

Inducements to bet

The NSW Office of Liquor, Gaming and Racing (OGLR) has recently fined several wagering operators, notably Ladbrokes, ClassicBet and, for offering inducements to participate in gambling. The maximum fine relating to the prohibition on offering inducements is currently $5,500 per breach.

Anticipated litigation against poker machine manufacturer

Maurice Blackburn is said to be working with the Alliance for Gambling Reform (a new group established in mid-2015 consisting mainly of community groups) to develop public interest test cases against a yet to be identified target in the poker machine industry. Mr Jacob Varghese, the lawyer expected to lead the litigation, has suggested the focus will be on the behaviour of poker machine manufacturers, designers and venue operators.

It is reported that the cause of action will be under Australia’s consumer law provisions, with the core argument being that the design of poker machines is misleading and deceptive by disguising losses as wins.

Thomson Geer will continue to monitor the above developments.

Written by:

Tony Rein | Partner | +61 2 8248 3438 |  

Alistair Green | Lawyer | +61 2 82483479 |