ONLINE GAMBLING AND AUSTRALIAN LAW
A short history of gambling in Australia and the government's liberal approach

by norton weisner
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Because of the US population size, its economic largess, and the considerable technological progress gap between it and the rest of the world, it's sometimes easy to forget that there is anywhere else. This is particularly true when it comes to the Internet, not only for isolationist minded Americans, but for anyone anywhere in the world for whom there really is only one ecommerce market, with Japan and the European Union coming a very distant second in importance. Nevertheless, there are other places in the world besides the United States and in this article we take a look at the opposite side of the globe and a prehistoric eden-like island continent once called New Holland and known to modern man as Australia.

Australia's population size of an extremely modest 19 million makes it a long shot for the soccer World Cup and yet it is still one of the world's most important economies, no more so than in the market for online gambling. Australia may have only 19 million people, but according to reports all 19 million of them enjoy a flutter from time to time, and an estimated 40% gamble regularly, which has made the nation high up the World9's list of so-called problem gambling nations, a nation which incidentally owns 20% of the world's poker machines.

As in the United States, gambling control or prohibition has traditionally been the prerogative of the individual states and territories rather than the federal - or, in Australia's case, commonwealth (not to be confused with The Commonwealth) - government. The history of gambling in Australia is generally one of a liberal approach taken by the Australian government with a generally upward trend of gambling participation and gambling revenue from which the government has benefited. Modern historical trends of Australian gambling law has been of general legalisation and control by the government. Privately owned soccer pools, loosely based on the British game, were introduced during the 1970s. Two-up was legalised for the first time in 1973 when Australia's first casino opened in Hobart, Tasmania. Casinos and gambling machines were introduced in the 1980's. Also in the 1980's, sportsbetting - which had always been the Australian's favorite form of gambling - was finally officially legalized, and in the 1990's Internet sportsbetting was legalised, first in NT and soon after in all Australian states and territories.

So, in general the Australian government's approach to gambling has been one of acceptance and eventual legalization and taxation, and gambling in Australia has become an ever-increasing source of revenue for their government. The only ever negative legislation has been to protect the government's interests, such as legislation in the fifties and sixties to clamp down on illegal (untaxed) off-course sports betting. Australians for their entire history have been enthusiastic gamblers and the government appears to have accepted the fact, and their only concern appears to have been that as much of the gambling as possible should be government controlled and taxed. That is not to say that there has been general agreement across the population to this approach, or that there has been no debate (of which there has been plenty), or that the Australian government has not been constantly aware of the societal implications of gambling within its national borders. However, until recently, the Australian government's approach to gambling appears to have been unwaveringly liberal. Boys will be boys - and in the modern era of female independence, Sheilas too - and Australian law appears in general to be more concerned about what goes in and out of Australia than what goes on inside.

On this historical backdrop of liberalism in the context of government control, the recent legislation pertaining to online gambling strikes one at first site as not a little incongruous. The Federal Interactive Gambling Act of 2001 (IGA), more recently fully implemented, makes illegal the provision of interactive games (namely, but not exclusively, Internet casinos) to Australians. This anti-online gambling legislation is different from recent US legislation in that it seeks only to prosecute the provider of the online casino, not the player. Also, although the legislation includes online casino outfits worldwide, only those inside Australia fall into Australian federal jurisdiction. So in practice, the IGA does nothing but prohibit Australian online casinos from knowingly accepting online bets from anyone physically inside Australia. It is therefore specifically legal for people in Australia to use offshore online casino websites to gamble (nor can they be prosecuted for using Australian online casinos) and Australian online casinos can in practice offer their services to anyone not physically located in Australia. Inevitably, users will increasingly prefer to play non-Australian online casinos, and this is borne out by a year-long survey of Internet gamblers conducted by the Australian Casino Association (ACA) in 2003 which found that 40% of Australian Internet bettors used offshore gambling sites.

This then really leaves only the question as to why bother at all? What are the motives of the Australian government in passing such legislation? The official line is that of concern that the Australian's natural tendency to gamble may get out of hand, with living room casinos on hand 24-7. And that the anti-online gambling legislation is intended as a warning call about the dangers of online casinos. Maybe so, and certainly the legislation is nothing more than a political gesture at best. Our opinion is that the gesture is more likely intended for the Americans, to show a token support for US federal anti-online gambling efforts, and certainly the US government is watching the Australian experiment closely for signs of success or failure.

Perhaps, after all, this new Australian gambling legislation is not entirely out of character with the Australian government's approach to gambling. They have always wanted to control and profit from the gambling of their citizens and there seems an acceptance that this is not going to be possible in the case of online casinos. In this case, it seems sensible therefore to discourage Australians from participating as players without discouraging Australians from profitting from the online gambling of non-Australians. The fact that the law seeks to prosecute providers rather than players also suggests that the Australian government would prefer for an online casino gambler to be playing on an Australian site than an offshore site, even though the effect is of driving online gamblers away from Australian sites.