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Thursday, 21 June 2001
Page: 24845


Senator CROSSIN (11:50 AM) —I rise to speak on the Interactive Gambling Bill 2001, noting that this is the second time that the government has brought before this parliament legislation relating to Internet gambling. The government's first attempt, the Interactive Gambling (Moratorium) Bill 2000, sought to initiate a 12-month ban on the development of the interactive gambling industry in Australia by creating a new criminal offence that prohibited a person from providing an interactive service unless they were already providing such a service before the retrospective date of commencement, which of course was 19 May 2000. With that moratorium bill, the coalition decided not to legislate against existing interactive gambling operators, as, they said at the time, `this option could save significant consequences for the industry and industry employees' as well as impact on state and territory revenues. But the bill we are talking about today will do just that.

Let me begin by stating at the outset that this Interactive Gambling Bill 2001 is cynical legislation. It is cynical because the legislation will not work and, if the federal government was honest with itself and with the Australian public, it knows that it will not work. As the Labor Party said in its minority report to the inquiry into the Interactive Gambling Bill earlier this year:

The flaws in the Interactive Gambling Bill 2001 are so pervasive that not only will the Bill fail to achieve its stated objectives but it will most likely exacerbate the very harms that it seeks and professes to circumscribe.

The alternative approach advocated by the Labor Party is that of improved regulation. This view is consistent with that propounded by the Productivity Commission in its report into Australia's gambling industries. A total prohibition on Internet gambling is neither feasible nor desirable, and the cooperation of the states and territories is required to implement a national regulatory framework. The states and territories have indicated that they are more than happy to go along this route. We believe that a legal and regulated industry is the best harm minimisation policy.

This bill will not work. I have spoken to many people in the Territory, and here in Canberra, who have been lobbying about this bill and who are either involved in online gambling or involved in any way with the Internet. They have all said that this legislation is fundamentally flawed. It won't work. It will send Australian gamblers, as Senator Harradine said, to offshore, unregulated sites and, eventually maybe—possibly—to overseas regulated sites.

The Internet Industry Association has released an independent report from the Gartner consulting group into the government's online gambling bill. That report concludes that it is not technically feasible to stop Australians using offshore or local Internet casinos. In releasing the report, the Chief Executive of the Internet Industry Association, Mr Peter Coroneos, said:

The legislation is technically inept and has no real prospects of protecting those whom it claims to protect. From a technical viewpoint, the bill will damage industry participants who are forced to try to make it work while delivering no tangible benefit to end users.

He said that the Internet Industry Association believed that:

... it is so fundamentally flawed that no amount of amendment on the floor of the Senate can salvage it.

In the Internet Industry Association's news release of 15 June, the association states:

It is not an answer for government to say: `Well, the Internet is more accessible.' If that is so, why are they not banning phone betting? There is a phone in every home. They have the power to do this, but they choose not to.

Alan Pedley from WWWagering and Gaming Consultants has said, in relation to this bill and with regard to the Northern Territory:

The Northern Territory has currently healthy and very substantial future industries at stake.

He goes on to say that the proposed amendments will:

... remove safeguards to control problematic gaming; remove safeguards to prohibit under age gaming; remove safeguards to protect gamblers privacy and fairness; will cost the Territory ... important e-commerce employment ... will cost the Territory ... important e-commerce investment ... and will cost the Territory ... important export revenue.

Alan Pedley goes on to say that he was responsible for the administration of technology based gambling regulation during the period when the Northern Territory established itself as the world's best practice jurisdiction.

The Australian Casino Association believes that, if the federal government goes ahead with this legislation, it will ban Australians from accessing Australian Internet gambling sites, but it will still permit Australian Internet gambling sites to access overseas markets and it will allow Australians to access overseas sites. The association states:

While the Association welcomes the fact that the Government will not ban Australian Internet gambling sites, including casino sites ... the Association is disappointed that the Government still refuses to understand that the only way that it will meet its objectives of dealing with the issue of problem gambling is through regulation at a national level.

Putting it simply, a ban will just not work.

Why are Australians being refused the opportunity to access Australian regulated sites but they can still access overseas sites that are not subject to the same high regulatory standards as are Australian regulated sites?

Even though this legislation is being referred to as a ban on online gambling, it is really not a ban as such. Under this so-called ban, Australians will continue to have access to almost every gambling site on the Internet. The only change is that Australians will be banned from using their own sites. Some 99.9 per cent of the 1,400 or so gambling sites on the Internet are based offshore. Access to those sites, under this bill, will not change. The only effect the bill will have is to force Australians to gamble offshore on those sites. The only sites Australians will not be able to access are the best regulated sites known internationally, and those that offer the world's best in harm minimisation.

On 7 July last year, Senator Richard Alston, the minister responsible for this legislation, announced that the government would conduct a study into the feasibility and consequences of banning Internet gambling. This inquiry was undertaken by the National Office for the Information Economy, which released its report in March of this year. I want to highlight two of the recommendations in the report. The report stated:

There are several technical methods that could potentially be used to implement a ban on interactive gambling based on Internet content control.

However, the report stated that `all of these methods can potentially degrade general Internet performance' and `none would be 100 per cent effective in preventing Australians' access to interactive gambling services'. The report also stated:

Economic modelling commissioned for the study indicates that a ban may have modest or small economic benefits for Australia in terms of restricting access to a harmful activity and possible aggregate benefits for State and Territory taxation revenue.

The report concluded:

The determined and skilled users can evade all of the technology options identified as being suitable for supporting a ban on interactive gambling.

The report also concluded:

Given the availability of these evasion options, a ban on interactive gambling will not be 100% effective.

Australia's regulated online gambling sites provide something that is not provided by the unregulated sites that Australian gamblers may be forced to use: protection from being ripped off on the Internet. A ban will drive Australian online gamblers to unregulated and potentially dubious sites that do not necessarily provide education, harm minimisation, betting limits or consumer protection. The unregulated sites cannot guarantee personal security or provide the safeguards that the Australian online operators currently practise.

In March this year, Senator Alston said the ban would be effective because people would not take the risk of gambling on an unregulated site offshore. However, a number of other countries are looking at approving Internet gaming, such as South Africa and several countries in Europe, including the UK. In the US, the Nevada state legislature has passed legislation that means that land based operators in Nevada will now focus on developing Internet casino sites. It means that consumers looking for regulated sites will soon find them offshore and will go there. Contrary to what the government is suggesting, this bill will do nothing to reduce problem gambling. It does nothing to control or limit problem gambling in the online environment, nor does it overcome any of the problems associated with interactive gambling. The evidence suggests that problem gambling in Australia is almost exclusively associated with land based gaming revenues.

The Australian Casino Association says that the legislation ignores the evidence. The Productivity Commission's report into Australia's gambling industries, which was released in November 1999, showed the expenditure shares for problem gamblers, and they were: gaming machines netted 42.3 per cent; wagering netted 33.1 per cent; scratchies netted 19.1 per cent; casino table games netted 10.7 per cent; lotteries netted 5.7 per cent; and other non-raffle games, of the type we are talking about, netted 25 per cent. Importantly, the association says that one-third of gaming machines are now in hotels and six per cent are in casinos. Given these findings, why are Internet casino operators being singled out for special attention under this bill, particularly when it is these operators which have sought and established the highest standards of player protection in the world?

The proposed amendments will still allow people to place bets on races, sporting contests and even casino games on the Internet. Regulation can be effective. As I have said, Labor supports the federal coordination of consistent state and territory based regulatory regimes. Effective regulation of interactive gambling is the only practical way of minimising social and criminal harm. The online gambling industry is currently subject to a high degree of regulation which is oversighted by state and territory governments. On a number of occasions, I have visited Lasseters Casino and its online gambling operations in Alice Springs. From what I have seen, under the strict regulatory framework, Australian licensed online gambling industries have already adopted stringent codes of practice that prohibit credit gaming. They allow members to preset betting limits and provide personal identification numbers to ensure that family members cannot access the gaming sites. They ensure the privacy and security of participants, and they issue winnings via non-negotiable cheques, not credit cards.

In today's papers we have a number of articles that criticise the government in relation to this legislation. The Australian today has an article entitled `Howard's net gambling ban is born to lose'. It says:

A sensible approach would have recognised that Internet gambling poses big social challenges and that these can best be met by co-operative regulation. Blanket bans on the Internet create more problems than they solve. Online technology offers much potential to identify and protect those at risk from gambling.

A Sydney Morning Herald article today says this bill is `a ban in name only'. It says:

Not only does it fail to stop Australians using them—

that is, faulty operations offshore—

but the money they spend on offshore casinos will not be subject to Australian taxes.

So it is revenue that this country loses.

In the final minutes of my speech, let me turn to the impact of the bill on the Northern Territory and what has been happening in the Northern Territory, particularly in the last week or so. Australia's only Internet casino at this stage is the site of Lasseters in Alice Springs. Last year it turned over $100 million. Lasseters have already said that, if the ban comes into play, they will be looking at relocating to Vanuatu, meaning the loss of 45 jobs from Alice Springs. I have already identified in my speech what I believe to be a significant loss for the Territory, which is of course a loss in intellectual property—through technology and the use of the computer and e-commerce—which is generated by developing these sites and keeping them regulated.

I want to turn to the events of this week which have seen the Northern Territory media focus on the efforts of my colleague Senator Grant Tambling. Labor's concerns about this legislation are shared by the Territory government. The Country Liberal Party up there knows that this ban is ill considered and would have a very negative impact on the Territory. Jobs would be lost, and technological expertise would be lost as a result of this ill-conceived and ineffective legislation. For once, I have to say reluctantly that it is probably something upon which I would agree with my Territory Country Liberal Party counterpart, SenatorGrant Tambling, who has been advised by his party to oppose this legislation and the effect that it will have on Territorians. I will provide for the Senate a copy of an article that was in Tuesday's paper, where the CLP tells Senator Tambling to toe the gaming line.

In fact, it has been a source of nothing but discussion on the radio this week. The Chief Minister on Tuesday in an interview on ABC radio said about Senator Tambling:

He knows absolutely clear the government's—

that is, the Northern Territory government's—

position. Unequivocally we think this legislation is nonsense. We think it's a populist politics at the least, and we believe it will have no effect on gaming or gambling.

He goes on to say that he believes:

It's an issue that he stands on wearing the badge of the CLP.

That is, Senator Tambling. It continues:

The CLP government has a firm position, the CLP as a Party through its management committee who spoke to him and gave him a unanimous point of view the other night has a very strong position.

I am led to believe that in fact Senator Tambling was preselected on the undertaking that he would be advised by and stand by the results of the central council who oppose this legislation outright. Susan Cavanagh, the president of the CLP in the Northern Territory, went on to say in an interview on Monday on ABC radio:

We had a full management committee meeting last week and unanimously with the exception of Grant obviously didn't agree, but the rest of management committee to a person told Grant that he had to cross the floor irrespective of whether the legislation was amended or not.

Senator Tambling, perhaps I can just put your name on the seat next to me. I say to you, Senator Tambling: come on over; there's a spare seat here next to me with your name on it already.


Senator Harradine —I rise on a point of order, Mr Acting Deputy President. The action of Senator Crossin is not within the standing orders, as I understand it.


The ACTING DEPUTY PRESIDENT (Senator McKiernan)—I would be prepared to take further advice on your point of order, Senator Harradine.



The ACTING DEPUTY PRESID-ENT —Order! I would be prepared to take further advice from you, Senator Harradine, on your point of order, as to where the senator's comments are in conflict with the standing orders.


Senator Harradine —I was not referring to her comments, although I would have thought that the courtesy in that regard would be to notify the person to whom she is referring. I was referring to her actions.


The ACTING DEPUTY PRESID-ENT —I am going to rule that there is no point of order. I am not sure whether Senator Crossin has indeed informed Senator Tambling of what her actions were going to be, but usually the matter is done privately between senators. It is a practice that I invariably follow myself when I am engaged in such as that. But I am ruling that there is no point of order.


Senator Harradine —On a further point of order, is it therefore permissible for any senator to come in here and put a banner up, for example, over their seat?


The ACTING DEPUTY PRESID-ENT —You are now asking me a question, Senator Harradine, and I do not believe that I am in a position to answer the question. It is a question that should be properly directed to the President, I believe, and I will ensure that your question is directed to the President.


Senator Heffernan —I rise on a point of order, Mr Acting Deputy President. We are not into advertising in this chamber. If people have a habit of—


The ACTING DEPUTY PRESID-ENT —What is your point of order, Senator Heffernan?


Senator Heffernan —Could I seek leave to make a statement?


The ACTING DEPUTY PRESID-ENT —Not during the course of a senator's contribution, no.


Senator Heffernan —I will go around and take it down myself, if you want me to.


The ACTING DEPUTY PRESID-ENT —Senator Heffernan, I shall not be challenged in the chair.


Senator Heffernan —I am not challenging you.


The ACTING DEPUTY PRESID-ENT —Order! I will not tolerate behaviour like that, Senator Heffernan, from you or from any other senator in this place. A point of order has been raised. I have considered that point of order; I have made a ruling on it. A further point of order was raised in the form of a question which I believe should properly go to the President. I have given an undertaking that I will ensure that the question is directed to the President. If you want to follow the matter further, I suggest that you do so directly to the President.

Senator Crossin would be aware why the points of order have been raised. Senator Crossin is in control of matters whereby she can choose to remove the piece of paper that seems to have offended some people, or she can choose to leave it there. In regard to Senator Harradine's question, if it was a banner carried in the chamber, I would of course immediately rule that a banner be pulled down. But I have in the past in my time in this chamber noticed that people have used pieces of paper to illustrate points through the course of debates.


Senator CROSSIN —I have made my point, and I am happy to remove Senator Tambling's name from the seat.


Senator Harris —Mr Acting Deputy President, I rise on a point of order to support Senator Harradine's question.


The ACTING DEPUTY PRESID-ENT —I have already ruled on that matter, and I do not think I will engage in further dialogue on that matter. I do appreciate the action that Senator Crossin has undertaken just now.


Senator CROSSIN —In doing so, I would like to remind my colleague that, when we do in fact take a vote on this bill next week—reluctantly as I might on behalf of the Northern Territory Chief Minister and the president of the Country Liberal Party in the Northern Territory—perhaps I might invite Senator Tambling to come across and sit next to me in a seat that we will no doubt leave vacant here. He knows it has already had his name on it. He is more than welcome to cross the floor and support the Territory next week when this legislation is voted upon. He knows full well that the subject of discussion on ABC radio this week has been that the Chief Minister and the party president have indicated that they will move that the Country Liberal Party in the Northern Territory reconsider his Senate preselection. Senator Tambling is in a very serious situation this week, I believe. He can throw off that shirt and show us the Superman cloak and fly over here and sit next to us next week and redeem his soul and his position.


Senator Stott Despoja —There's an image!


Senator CROSSIN —There is an image, Senator Stott Despoja. It is probably not an image that many would be able to envisage. I hasten to add that I would not like to think that my colleague's parliamentary privilege or right to vote under his office were being threatened. If he knows full well that that is what he ought to do, he should come across the floor. I believe he has no option but to oppose the legislation.

In conclusion, this bill prevents Australian Internet gambling operators from providing services to customers in Australia, but it does not prevent operators from providing the same service to overseas residents. As a senator for the Northern Territory, I am concerned about the impact this ban will have on the Territory's economy. It will cost the Territory jobs, investment and technological expertise. No-one really considers that this ban will achieve its stated objectives. It will do nothing to reduce the real problems related to gambling in Australia. It will simply force online gamblers offshore to the 1,400 or so unregulated gambling sites. (Time expired)