In Australia the Interactive Gambling Act 2001 (Cth) (Act) sets the rules for companies that offer or advertise gambling services. It applies to all online gambling, whether through a website, app or social media platform. Under the Act, the provision of internet gambling services in Australia is generally prohibited, subject to some exceptions. The Act empowers the Australian Communications and Media Authority (ACMA) to investigate complaints, write investigation reports and undertake enforcement and compliance monitoring activities.
What is a prohibited interactive gambling service?
Section 5 of the Act defines a gambling service as a gambling service where:
“(a) the service is provided in the course of carrying on a business; and
(b) the service is provided to customers using any of the following:
(i) an internet carriage service;
(ii) any other listed carriage service;
(iii) a broadcasting service;
(iv) any other content service;
(v) a datacasting service.”
Section 5 also provides a list of exceptions to this including:
- a telephone betting service;
- an excluded wagering service; and
- an excluded gaming service.
Section 15 of the Act provides that prohibited interactive gambling services must not be provided to customers in Australia. This provision states:
“(1) A person commits an offence if:
(a) the person intentionally provides a prohibited interactive gambling service; and
(b) the service has an Australian‑customer link (see section 8).”
Requirement to be licensed
The Act was amended in 2017 pursuant to the passing of the Interactive Gambling Amendment Bill 2016 (Bill). The Bill was implemented in response to the Australian Government’s 2015 Review of the impact of illegal offshore wagering.
The Act now defines two (2) categories of services, namely ‘regulated interactive gambling services’ and ‘prohibited interactive gambling services’. The principal distinction is that regulated interactive gambling services are allowed to be provided by operators who are licensed in Australia and authorised to provide the relevant services under the terms of their license.
Therefore, operators who were previously exempt from the definition of a ‘prohibited interactive gambling service’ and were not prohibited by the Act (such as excluded wagering and lottery services) are now required to be licensed. The Bill imposes both criminal and civil penalties to operators who provide a prohibited interactive gambling service to customers in Australia.
ACMA’s enforcement powers
The Bill granted ACMA greater powers to enforce the provisions of the Act, including the creation of a complaints process for the supply and promotion of any unlicensed or prohibited interactive gambling services, and a procedure enabling the ACMA to conduct investigations in relation to these complaints. Under the Bill, the ACMA must set up a register of legitimate interactive gambling services which can be accessed by the public on the ACMA website.
The Bill also amends the Australian Communications and Media Authority Act 2005 (Cth) to enable the ACMA to disclose information relating to gambling services to:
- the Department of Immigration and Border Protection who may place the names of executive officers of organisations who contravene the Act on a “Movement Alert List” with the aim of restricting their travel to, or from, Australia; and
- international regulators of operators licensed by that regulator who may be in breach of the Act through supplying interactive gambling services to persons present in Australia.
The immediate impact of these amendments was to clarify to offshore gambling operators that the supply of online gaming services (including online casino games and online poker services) to Australians without a licence is prohibited by Australian law.
The case of Lottoland v ACMA
In the case of Lottoland Australia Pty Ltd v Australian Communications and Media Authority [2019] NSWSC 1041 (Lottoland v ACMA), the Court provided guidance on how the Act should be understood and applied. Importantly, the Court explored the line between a game of chance and a wager, and clarified the boundary between prohibited gaming services and lawful wagering.
Lottoland Australia Pty Ltd ACN 602 590 429 (Lottoland) holds a sports bookmaker licence issued by the Northern Territory, allowing it to provide betting services relating to ‘bets on approved sporting events’. In response to a ban on lottery betting services, Lottoland launched a range of new betting products approved by the Northern Territory Government.
ACMA commenced an investigation into five (5) of Lottoland’s gambling products on the basis that they breached section 15 of the Act. This finding was on the basis that ‘several Lottoland online jackpot betting services were games of chance which are prohibited under the Act’. Lottoland argued that the products fell under the ‘excluded wagering services’ exemption in section 5 of the Act, as they relate to betting on ‘an event, series of events or contingency’.
The Court upheld Lottoland’s argument. Justice Sackar noted at [87] that there was no detailed or technical definition in the Act and that it was therefore appropriate to read the words in their natural and ordinary meaning within the context of the Act. His Honour noted that there was no skill, opinion or belief involved in the gambling products. Further, there was no evidence or rational methodology of predicting the numbers at all, and in this context there were no traditional elements of a ‘game’ present in the products. Accordingly, Lottoland’s gambling products were held to be excluded wagering services and therefore were not in breach of the prohibition against interactive gambling in section 15.
For more information on the Court’s consideration of the meanings of ‘bet’ and ‘game’, see our earlier article here.
Takeaways
Australian online gambling legislation is complex. Online interactive gambling is generally prohibited in Australia, however there are some exceptions such as exempt online wagering and lotto services. Even those exempt operators are still required to obtain a license before they will be authorised to provide online gaming services. If an operator provides prohibited gaming services, they may be subject to investigation by the ACMA, which could result in civil and criminal penalties.
Links and further references
Legislation
Australian Communications and Media Authority Act 2005 (Cth)
Interactive Gambling Act 2001 (Cth)
Interactive Gambling Amendment Bill 2016
Cases
Betfair Pty Limited v Western Australia [2008] HCA 11
Lottoland Australia Pty Ltd v Australian Communications and Media Authority [2019] NSWSC 1041
Further information about gambling compliance
If you need assistance with compliance for an online wagering business, please telephone me for an obligation free and confidential discussion.
Malcolm Burrows B.Bus.,MBA.,LL.B.,LL.M.,MQLS.
Legal Practice Director
T: +61 7 3221 0013 (preferred)
M: +61 419 726 535
E: mburrows@dundaslawyers.com.au
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.
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