Credit card ban – online gambling services

On 25 August 2020, the Interactive Gambling Amendment (Prohibition on Credit Card Use) Bill 2020 (Cth) (Bill) was introduced in the Commonwealth Senate.  The Bill’s aim if passed is to amend the Interactive Gambling Act 2001 (Cth) (Act) to prohibit the use of credit cards to bet with certain gambling services.  The Bill’s day of Assent was to be six (6) months after its commencement, however, on 18 March 2021, the Senate referred it to the Environment and Communications Legislation Committee (Committee) for inquiry and report.  This report is due 8 October 2021 and will provide recommendations to the form of the Bill that is to be made law.  This article outlines the current Australian law on gambling and discusses the changes that are to be made by the Bill.

Current Australian law on gambling

Section 15C of the Act as currently in force, prohibits the extension of credit, except by way of credit card, to customers of a ‘regulated interactive gambling service’ that is also a ‘wagering service’ (Gambling Service).  Gambling services include those that facilitate the placing, making, receiving or acceptance of bets on, among other things:^[1]

• a horse, harness or greyhound race;^[2]
• a sporting event unless transaction occurs after the game has started;^[3] and
• a game, including electronic, that involves a mix of chance and skill played at a particular place to win money or something of value (for example, pokies at a casino).^[4]

While the above provision regards extensions of credit, no laws regulate the payment by a customer to a Gambling Service by way of credit card.^[5]  However, as stipulated by the Bill’s Explanatory Memorandum (Explanatory Memorandum), harm from online Gambling Services, which heavily use credit card payments, in Australia has increased drastically over recent years, especially during the 2020 COVID-19 lockdowns.  This became the rationale for the Bill.

What the Bill aims to chance

The Bill will insert section 15K into the Act which provides a person commits an offence if:

“…(a)  the person intentionally provides a regulated interactive gambling service that is a wagering service; and

(b)  either:

(i)  the person accepts, or offers to accept, credit card payment in connection with the provision of the service to a customer, or prospective customer, who is physically present in Australia; or

(ii)  the person facilitates or promotes credit card payment in connection with the provision of the service to a customer, or prospective customer, who is physically present in Australia.

Penalty: 500 penalty units.

…

(3)  A person who provides a regulated interactive gambling service that is a wagering service must not:

(a)  accept, or offer to accept, credit card payment in connection with the provision of the service to a customer, or prospective customer, who is physically present in Australia; or

(b)  facilitate or promote credit card payment in connection with the provision of the service to a customer, or prospective customer, who is physically present in Australia.

Civil penalty: 750 penalty units.”

Each day the customer pays for a Gambling Service by credit card amounts to a separate offence, not the individual betting transactions themselves.^[6]  Therefore, for the first offence above, Gambling Service will be subject to a $111,000 penalty per person, per day that they accept credit card payments.^[7]  For the second offence above, a $166,500 civil penalty per person, per day.^[8]

However, as the Bill does not yet have the force of the law and the Committee’s report is unreleased, changes could still be made to the new offences and their penalty amounts.

Takeaways

While the extension of credit to fund betting is not allowed under current Australian law, payment by credit card is allowed for online services.  However, due to the harm that online Gambling Services has created for Australia, the Bill aims to make it an offence to accept a bet with a credit card.  If the Bill in its current form is to be passed, Gambling Services could be liable to pay penalty units between $111,000 and $166,500 per person, per day they bet with a credit card.  However, changes may be made between now and the Bill’s assent and the Committee’s report is still to be released on 8 October 2021.  More to come

Links and further references

Legislation

Crimes Act 1914 (Cth)

Interactive Gambling Act 2001 (Cth)

Interactive Gambling Amendment (Prohibition on Credit Card Use) Bill 2020 (Cth)

Other materials

Explanatory Memorandum, Interactive Gambling Amendment (Prohibition on Credit Card Use) Bill 2020 (Cth)

Further information about gambling law

If you are a company and need advice on your obligations under the Interactive Gambling Act 2001 (Cth), contact us for a confidential and obligation-free discussion:

Disclaimer

This article contains general commentary only.  You should not rely on the commentary as legal advice.  Specific legal advice should be obtained to ascertain how the law applies to your particular circumstances.

[1] Interactive Gambling Act 2001 (Cth) ss 4 (see definitions: (a) to (b) of ‘gambling service’ and ‘wagering service’), 8E.

[2] Interactive Gambling Act 2001 (Cth) s 8A(1).

[3] Interactive Gambling Act 2001 (Cth) ss 8A(2), 10B.

[4] Interactive Gambling Act 2001 (Cth) ss 4 (see definition (e) of ‘gambling service’), 8B.

[5] See Explanatory Memorandum, Interactive Gambling Amendment (Prohibition on Credit Card Use) Bill 2020 (Cth).

[6] Interactive Gambling Amendment (Prohibition on Credit Card Use) Bill 2020 (Cth) s 15K(2), (4).

[7] Crimes Act 1914 (Cth) s 4AA.

[8] Crimes Act 1914 (Cth) s 4AA.

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