Gambling Ad Ban May Increase Offshore Betting in Australia

A recent parliamentary report is recommending a complete ban on gambling ads. Some feel this move is necessary to combat problem gambling and protect youth from gambling. However, one legal expert is warning that such a ban could have unintended consequences. He believes it will inevitably lead to an influx of players gambling at illegal offshore operators.

Legal Expert Believes Gambling Ban Will Drive Gambling Offshore

Parliament is looking at banning all gambling advertising in the next three years. While there will be exemptions for sports programming and dedicated racing channels, all other advertising will be phased out.

Many believe that this approach will lead to a reduction of gambling harm among Aussies. Some also feel that it will benefit youth as gambling will be less normalised than it is currently. While this may prove true to some, one legal expert warns that the new rules could have unexpected consequences.

Jamie Nettleton is a Partner at Addisons and recently spoke with Inside Asian Gaming about the matter. He believes that a ban on gambling combined with increasing taxes and levies on operators will drive players to offshore operators.

Nettleton points out that the purpose of a gambling license is to grant an operator access to the region. This access includes the ability to advertise to potential players. The new ban would take away this benefit from operators.

Furthermore, increasing restrictions and regulations make it more expensive for operators. This includes higher taxes, levies, and the requirement for players to go through KYC verification before making bets.

Ultimately, Nettleton believes that licensed operators will not be able to offer the same odds as offshore bookmakers. He thinks that this will result in players transitioning to illegal offshore bookmakers. Offshore operators vary in quality, with some being completely unlicensed. If players face problems, they have no legal recourse and risk losing their deposits.

Current Regulatory Structure Only Works with Operators That Follow Rules

Nettleton is not a fan of the current regulatory regime in Australia. As he told Inside Asian Gaming, “Australia’s regulatory regime has been effective in stopping those overseas operators [who follow the rules] from providing their services from offshore into Australia, but not those operators conducting business in grey markets who have less regard for relevant regulation.”

Australian law prohibits companies from offering services directly to Australian companies, but the regulations only allow lawmakers to prosecute companies operating in Australia. Also, it does not prohibit players from signing up at offshore companies and playing.

The dangers of playing at offshore sportsbooks and casinos are numerous. First, you are never sure if the odds are authentic or inflated to attract players. Also, you cannot know if casino gaming is genuinely fair and honest or if it is controlled by the operator. Even some “licensed” casinos and sportsbooks may operate fraudulently. Lesser known “regulatory agencies” rarely do anything to help players wronged by fraudulent casinos.

Nettleton Does Not See National Regulation Happening Anytime Soon

Finally, Nettleton commented on a proposed national gambling regulator. Such a regulator would replace the state-based regulators currently in place. Nettleton believes a national system would be a tough ask and could create conflict.

He believes there will be conflicts between states over the national system. For example, he points to NSW and its Point of Consumption tax. He thinks they will not want to give up regulatory control and lose the money that this tax would bring in. Ultimately, he called a national system a “big, big ask” and he does not see it occurring anytime soon.

However, most of us will agree that a better system is needed for national regulation. While it is understandable that lawmakers want to prevent gambling harm, the current system does more to punish operators and players than it does to protect problem gamblers.

A strong national regulatory system could combat offshore gambling while providing players with a safe environment. However, any such system should be expanded to include online casino gaming and online poker. A system limited to sports betting and horse racing will always leave the door open for offshore operators to take advantage of players looking to gamble online.