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Thursday, 21 June 2001
Page: 24834


Senator MARK BISHOP (10:52 AM) —Today the Senate is debating a bill that has been used as an instrument of deception by this government; namely, the Interactive Gambling Bill 2001. Last month, the Senate Environment, Communications, Information Technology and the Arts Legislation Committee reported on its inquiry into this bill. Labor senators provided a dissenting report to that inquiry, which set out our position in detail once again. This is the third occasion that a Senate committee has examined the appropriate response to interactive gambling in Australia. Still the government has failed to produce an effective or appropriate response to interactive gambling in this bill, even though it has amended the bill considerably in response to the Senate committee's findings.

The government's policy approach to interactive gambling is flawed. There are a number of reasons why the opposition considers the position taken in this bill to be totally inappropriate. Firstly, Australians will still be able to access Internet gambling services if this bill becomes law. Secondly, the easiest sites for Australians to access will be overseas sites, some of which are run by criminal and Mafia elements. It is nearly impossible to distinguish reputable sites from those of dubious probity. Thirdly, problem gamblers are likely to be the ones who will be desperate enough to circumvent restrictions on accessing Australian and foreign sites and will most likely fall prey to unscrupulous operators who will not limit expenditure. This bill could result in worse gambling problems for Australians than if they were able to access strictly regulated Australian sites. Fourthly, Australia is looking backwards while the rest of the world is looking forward. A number of countries are looking to adopt Australia's regulatory model for Internet gambling.

Fifthly, it is hypocritical to allow Australian Internet gambling service providers to offer services overseas—with Australia receiving the revenue—while other countries will be left with the attendant social problems and no funds to deal with them. Sixthly, the bill will have a negative impact on Australian interactive gambling service providers. Their claims of being well regulated will not be credible if their own government will not allow its citizens to access their services. Finally, the bill still permits Australians access to Internet wagering, and wagering is hardly immune from gambling problems. Additionally, as identified in the Labor senators' minority report to the inquiry, there are a number of specific concerns with the drafting of certain provisions in the bill that render the bill's impact uncertain or unjust. The minister, however, has evinced an intention to amend the bill to address some of these deficiencies identified in the Senate report.

Turning to my first point, that Australians will still be able to access Internet gambling services if this bill becomes law, there are a number of reasons for this. Firstly, the bill does not prohibit Australians from accessing IGSPs, whether they are foreign or Australian. Instead, it seeks to stop Australians from accessing the safest sites in the world but allows them to access the most dangerous sites. If Australians want to access the services of an Australian or foreign IGSP, they will still be able to, even if those IGSPs claim not to accept Australian customers. Australians can still access reputable Australian and foreign IGSPs that refuse to accept Australian customers by deceiving the IGSP. There are a number of ways of concealing their locations from IGSPs. This can be achieved, for example, by circumventing geolocation software or dialling through foreign Internet service providers so that foreign IGSPs identify them as being wherever the foreign Internet service provider is located. The section in the bill for providing interactive gambling services to Australians is not a very persuasive deterrent and is unlikely to be enforced. This would especially be the case if the government fails to provide additional funding for the already underresourced Australian Federal Police.

There are also significant numbers of disreputable foreign sites of dubious probity that Australians will be able to access. Some gamblers, particularly those susceptible to gambling problems, might favour those sites. This leads me to my second point, which is that the easiest sites for Australians to access will be overseas sites, some of which, as I said, are run by criminal and Mafia elements. It is nearly impossible to distinguish reputable sites from those of dubious probity. A ministerial media release on interactive gambling states that there are:

... very disturbing examples of how Internet gambling organisations actually feed the addictions of problem gamblers.

There are no examples of such unscrupulous behaviour by Australian gambling operators; rather, it is offshore operators at whose mercy the government plans to leave Australian gamblers who engage in such activity.

Last year there were approximately 800 unregulated offshore Internet casinos available worldwide, which cannot guarantee personal security or provide the safeguards Australian online operators have in place. That number has almost doubled to some 1,400 sites, with Australian sites comprising less than two per cent of the Internet gambling sites worldwide. It is very difficult to distinguish reputable sites from those that are not. Consequently, Australian gamblers will be at risk when this bill forces them to use offshore sites and prevents them from accessing the strictly regulated sites. This leads to my third point, which is that problem gamblers are likely to be the ones who are desperate enough to circumvent restrictions on accessing Australian and foreign sites and who will most likely fall prey to unscrupulous operators who will not limit expenditure. The bill could result in worse gambling problems for Australians than if they were able to access strictly regulated Australian sites.

The fourth issue I would like to address today is the failure of the government to properly tackle information technology issues. It seems that the government does not really care to get a hard handle on the complexity of many of these issues. It appears that the Australian government looks backward while the rest of the world moves forward. As I said, a number of countries are looking to adopt Australia's regulatory model for Internet gambling. The minister is in fact contradicting his own policy guidelines. In July 1997 the minister for communications announced the government's principles for a national approach to regulate the content of online services such as the Internet. Senator Alston took a very different approach from the one he is advocating in this debate. Senator Alston said:

Material accessed from on-line services should not be subject to a more onerous regulatory framework than “off-line” materials such as books, videos, films and computer games. As a guideline, what is protected behaviour “off-line” should be protected behaviour online. This framework balances the need to address community concerns in relation to content with the need to ensure that regulation does not inhibit industry growth and potential.

Senator Alston has certainly changed his tune since then. He now chooses to contradict his own policy guidelines. It is fair to conclude that Senator Alston is damaging Australia's international reputation and his actions are contrary to the best interests of Australia and the future of our IT industries. My next and fifth point is that it is hypocritical of the government to allow Australian Internet gambling service providers to offer services overseas, as Australia will receive the revenue while other countries will be left with any attendant social problems and no incoming revenue to deal with them.

My sixth point is that the bill will have a negative impact on the established and strictly regulated Australian IGSPs. Even though their existing customers are almost exclusively overseas, their claims of being well regulated will not be credible if their own government will not allow its citizens to access their services. My seventh point is that the amendments foreshadowed by the government will permit Australians access to Internet wagering. Wagering is hardly immune from causing gambling problems. In fact, it is extremely hypocritical for this government to exclude interactive wagering when wagering is as much a problem in terms of problem gambling as any other form of gambling. The amendment goes to show that the government is both hypocritical and duplicitous in its approach to this particular issue. This government's primary concern is not to protect problem gamblers. The government and this minister put particular interests first in this debate. This time they are protecting their colleagues in the wagering industry. One could say that this is hardly an effective way to create good public policy.

It is noteworthy that the government has selectively caved in to the intensive lobbying by the wagering industry. It is just further proof of the government's ad hoc approach to the formulation of policy. The government's selective approach is the reason why it cannot come up with a sensible, effective and long-term policy for interactive gambling that will minimise interactive gambling to the greatest extent possible. The most notable thing that this bill does is prevent Australians from accessing the world's best, safest and most consumer friendly interactive gambling sites: the Australian ones currently in existence.

Commenting on the bill, the minister stated that the government `only took wagering out under duress because of the necessity to do that to get it through the Senate'. One asks the obvious question: why would the minister take wagering out under duress? Doesn't the government have any consistent policies in this area that can be adhered to, where backflips are not the routine order of the day? After stating that wagering was taken out of the ban only `under duress' to get the bill through the Senate, the minister then said that he did not know how the final vote would play out in the Senate and that `you can never quite tell until you get in there'. So why did the minister take out wagering? He does not know how the final vote will play out in the Senate. Why would he take the bill beyond being ineffective—which, of course, it already is—to being the likely subject of ridicule?

If you read today's press, it is already emerging that way. The minister said:

There's a huge difference between picking up your phone, putting on a few bets at the TAB, and sitting there with a remote control and clicking your head off until you've lost all of what you had, and more.

First of all, I would like to make the point that, if gamblers play on Australian Internet gambling sites they could not gamble away all of what they have and more because there are expenditure thresholds imposed. However, if this bill is introduced, Australian gamblers will be able to gamble away all they have and more on many offshore sites still available to them. Secondly, one asks the rhetorical question: what, Minister, is the difference between problem gambling amongst those who gamble on the races and those who gamble at casinos? The minister will be interested to be reminded that the Productivity Commission found that problem gamblers are almost 1½ times more likely to prefer gambling on racing to casino gambling. Wagering is not any safer than any other form of gambling. Wagering is not immune to the social effects of problem gambling. It is impossible to identify any sensible rationale for the government's exclusion of wagering from the bill.

The opposition have taken a very different approach to the issue of interactive gambling. Our primary concern is to ensure that problem gambling arising from interactive gambling is kept to an absolute minimum. We are concerned that the government's bill will not control or limit problem gambling in the online environment. Australian IGSPs are leading the world in terms of technology and services and they are subject to the world's strictest regulation by the states and territories. The opposition have concluded that the most effective way to manage interactive and Internet gambling is, overwhelmingly, to have state and territory cooperation in formulating and implementing a national regulatory regime. We support federal coordination of consistent state based regulatory regimes.


Senator Kemp —Which would do what?


Senator MARK BISHOP —It would limit gambling, it would limit access and it would impose regulation.


Senator Kemp —Very vague. You don't support this, Senator Bishop.


Senator MARK BISHOP —It would achieve a particular purpose as to a ban that applies only in Australia and not to offshore sites, Senator Kemp. There is no evidence to support the government's conclusion that its ban will limit problem gambling. Indeed, a considerable number of submissions to the committee's inquiry suggested that the bill would exacerbate gambling problems arising from interactive gambling by depriving Australians of a strictly regulated service.

The opposition believes that it is not technically or practically feasible to ban interactive gambling. Ill-advised attempts to ban interactive gambling will fail and risk exacerbating a problem that can be avoided if an appropriate regulatory response is put in place now. This bill, if passed, would mislead the community, potentially creating a false sense of security by contending that Internet users would be safe from harmful interactive gambling sites. The opposition cannot support this bill when we know that there is a far more effective way to deal with this issue. It is not in the best interests of Australians that we support this bill. I now formally move the opposition's second reading amendment:

At the end of the motion, add:

“but the Senate:

(a) condemns the Government for introducing an unworkable, internally inconsistent and hypocritical bill which:

(i) does not provide strong regulation of interactive gambling as the most practical and effective way of reducing social harm arising from gambling;

(ii) may exacerbate problem gambling in Australia by barring access to regulated on-line gambling services with in-built safeguards but allows access to unregulated offshore on-line gambling sites that do not offer consumer protection or probity;

(iii) does not extend current regulatory and consumer protection requirements applying to off-line and land-based casinos, clubs or wagering venues to on-line casinos and on-line wagering facilities;

(iv) damages Australia's international reputation for effective consumer protection laws and strong, workable gambling regulations;

(v) singles out one form of gambling in an attempt to create the impression of placating community concern about the adverse social consequences of gambling but does not address more prevalent forms of gambling in Australian society; and

(vi) is not technology neutral or technically feasible;

(b) calls on the Government to show national leadership on this issue by:

(i) addressing harm minimisation and consumer protection as well as criminal issues that may arise from on-line gambling;

(ii) ensuring a quality gambling product through financial probity checks on providers and their staff;

(iii) maintaining the integrity of games and the proper working of gaming equipment;

(iv) providing mechanisms to exclude those not eligible to gamble under Australian law;

(v) implementing problem gambling controls, such as exclusion from facilities, expenditure thresholds, no credit betting, and the regular provision of transaction records;

(vi) introducing measures to minimise any criminal activity linked to interactive gambling;

(vii) providing effective privacy protection for on-line gamblers;

(viii) containing social costs by ensuring that adequate ongoing funds are available to assist those with gambling problems;

(ix) addressing revenue issues that impact upon state government decisions relating to interactive gambling;

(x) establishing consistent standards for all interactive gambling operators;

(xi) examining international protocols with the aim of achieving multilateral agreements on sports betting and other forms of interactive gambling;

(xii) ensuring appropriate standards in advertising, in particular, to prevent advertising from targeting minors;

(xiii) investigating mechanisms to ensure that some of the benefits of on-line gambling accrue more directly to the local community;

(xiv) working with State and Territory governments to ensure that on-line and interactive gambling operators meet the highest standards of probity and auditing through licensing agreements;

(xv) seeking co-regulation of interactive gambling by establishing a national regulatory framework that provides consumer safeguards and industry Codes of Practice; and

(xvi) coordinating the development of a co-regulatory regime through the Ministerial Council comprising of relevant State and Federal Ministers”.

I would like to make some comments on paragraphs (i) through to (vii). Paragraph (i) condemns the government for failing to adopt the most practical and effective way of reducing social harm arising from gambling by not choosing to strictly regulate the domestic industry.

Paragraph (ii) expresses the opposition's concern, which I discussed earlier, that the impact of this bill may exacerbate problem gambling in Australia by barring access to regulated online gambling services with in-built safeguards. The bill still allows access to unregulated offshore online gambling sites that do not offer consumer protection or probity, placing those most vulnerable to problem gambling at an alarmingly high risk.

Paragraph (iii) condemns the government for not extending current regulatory and consumer protection requirements applying to offline and land based casinos, clubs or wagering venues to online casinos and online wagering facilities. The opposition supports extension of offline regulatory requirements to online facilities to ensure the probity of operators and consumer protection.

Paragraph (iv) expresses the opposition's concern that the bill damages Australia's international reputation for effective consumer protection laws and strong, workable gambling regulation. Australia, to date, has had a fine reputation internationally for its regulation of gambling. By failing to regulate the Australian industry, the Howard government is causing further damage to that reputation. The consequences of this damage will not be seen in the immediate future; however, the damage will be done if the bill is passed in its current form.

Paragraph (v) condemns the government for singling out one form of gambling in an attempt to placate community concern about the adverse social consequences of gambling. The government has singled out a form of gambling that has been around for some time now but has not revealed itself as a significant cause of gambling problems. The bill is indeed a cop-out, and the government is acting in this way to avoid addressing more prevalent forms of gambling in Australian society, which is the real issue that the community is concerned about.

Paragraph (vi) expresses the opposition's view that the bill is contrary to the best interests of the Australian Internet industry and the development of e-commerce in this country. Interactive gambling has distinct advantages to offer the Australian industry. As a consequence of the existing industry, Australia has acquired and retained technological expertise in our country. Excessive prohibition on the Internet creates an environment of mistrust and fear amongst consumers, inhibits development of an Australian industry and has a detrimental impact on the Australian economy.