Vera&John, an online casino based out of Malta, announced in December it would leave the Australian gaming market. The move was seen by many as the beginning of an exodus of the Australian gaming industry by offshore operators.
At the time of its announcement, Vera&John Casino told its customers their decision to leave Australia was a “business decision”. It seems obvious that the move was a reaction to the Interactive Gambling Amendment Bill 2016.
Alan Tudge’s Online Gambling Reforms
The Interactive Gambling Amendment Bill 2016 was passed by Minister for Human Services, Alan Tudge, who implemented clear-cut definitions of what is legal and illegal in the online gambling industry. Since the imposition of the Interactive Gambling Amendment Bill 2001, the Australian online gambling industry existed in a gray area.
Minister Tudge’s bill has not been signed into law just yet. If it becomes law, then the move by Vera&John could be followed by many other top gaming brands leaving the Australian market.
In-Play Sports Betting Ban
One of the chief reasons for the new law is the proliferation of in-play sports betting, which is rampant in Australia. Offshore gaming operators have exploited loopholes by creating in-play smartphone applications. These allow players to make bets many times during one game on specific in-game proposition wagers.
Such bets were declared illegal in the previous iteration of the Interactive Gaming Law, at least if they were processed on a computer or laptop. An exception was made for people who called in such bets on their phones. Offshore operators have argued that the smartphone apps were legal, because of the carve out for phone users. Alan Tudge’s new law would close that loophole.
PokerStars to Leave Australian Gaming?
PokerStars, the world’s largest online poker room, said it probably would leave the Australian market, if the new law is passed. Such a large gaming operator leaving would have a tremendous impact, and might convince others to leave the market.
PokerStars controls 70% of the global online poker market. The company still feels the effects of not leaving the United States poker market after the UIGEA was passed in 2006. PokerStars was forced from the US poker market in 2011, when the Black Friday indictments came out. It reentered the New Jersey online gambling market in 2015 under new management, but its so-called “bad actor” status has hampered the passage of online poker legislation in California.
Amendments to IGA Bill 2016
The current form of the Interactive Gambling Amendment Bill 2016 might not be the one which is passed into law. It has not reached the consultation, discussions, and review stage in the national parliament, meaning there could be key amendments forthcoming.
Why Have an Update?
People might wonder why the Interactive Gambling Amendment (2001) needed to be updated in the first place. Alan Tudge’s ban on in-play sports betting is just one example of why a new law was needed.
When the IGA 2001 was passed into law, the Internet had been available to the mainstream public user for less than 10 years. Most people had gone online less than 5 years before the law was passed, so many of the trends we face now had not developed.
Online gaming technology was not as developed, either. Smartphones and tablet computers did not exist, and few anticipated the coming of a WiFi revolution. Gamblers had to get online to place sports bets, and betting was no easy process. Many online gamblers still used dial-up services for their Internet connection, making gambling a long, drawn-out process.
At the time, making wagers over the telephone was something done through a call center. The process was similarly long and drawn-out, so the idea of making in-play bets was not even a consideration. New technologies often drive new laws.
Australian In-Play Betting Habits
Cultural differences also have an effect. In-play betting happens in the United Kingdom, but it is more accepted there. In the UK, most in-play bets are on horse racing. Horse races happen so quickly, the chances of the smartphones bets being abused is smaller.
In Australia, 70% of in-play bets are on football (soccer) or the AFL (pictured above). Long matches with more betting propositions means players can abuse the method. With dozens of potential wagers on one sporting event, the changes of problem gambling are greater. Australian lawmakers in Northern Territory have claimed that the in-play betting apps have caused issues in Aboriginal communities. Many families share a smartphone among them. Children have found their parents’ betting apps and wagered financially ruinous amounts of money on sports.
In such a setting, it’s natural for Australian officials to want to close the loophole made by technology. The shame is the wider online gambling industry might suffer from the resulting legislation.