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Monday, 20 March 2017
Page: 1447

Senator XENOPHON (South Australia) (18:25): I support this bill, the Interactive Gambling Amendment Bill 2016, but I believe it ought to go much further because the issue of online gambling has become increasingly prevalent in Australia. It is impacting on many more people. We have seen an exponential increase in online gambling, in particular in sports betting. As my colleague Senator Kakoschke-Moore indicated, the 2015 O'Farrell review found that the number of active online wagering accounts grew from 200,000 to 800,000 between 2010 and 2014—that is for legal online accounts for legal sports betting agencies. That indicates to me that that there is a significant issue, and the bigger the boom in online gambling the bigger the bust for individuals who are caught up in it and who suffer from gambling addiction.

This bill will go some small way in dealing with the issues—it acknowledges the impact of in-play betting—as imperfect as it is, but there needs to be consideration of why this bill needs to go further. It needs to go further because it is not a case in Australia of enough is enough; it is a case of enough is much. We in this nation lose more in gambling per capita than any other nation in the world. It is a significant social problem, and it is being made worse by the biggest growth area—that is, sports betting.

In 2015, I was part of the launch of Financial Counselling Australia's report Duds, mugs and the A-list. That report looked at the impact of sports betting, particularly on young men around the country. It was published by an organisation that knows better than most what it means to be affected by gambling addiction, because Financial Counselling Australia represents financial counsellors who assist consumers in financial difficulty. They see, on the front line, at the coal face, the impact of gambling addiction. They have been seeing more and more people in recent years in relation to the effects of sports betting, and in-play betting was a significant driver in gambling addiction. In-play betting had a significant impact on young men chasing their losses, because they could gamble in play. It is a more addictive form of gambling. It is more pernicious and leads to greater problems.

That is why we need to support this bill, but I believe the way that this bill has been drafted by the government allows for a number of loopholes to allow some organisations to circumvent that. Reference was made by Senator Di Natale in respect of that. We must oppose that circumvention by strengthening the bill.

Financial Counselling Australia in its landmark report Duds, mugs and the A-list: the impact of uncontrolled sports betting said that urgent action is needed:

Betting on the pokies is relatively small fry in comparison - you can’t put $250,000 into slot machines in one sitting, but you can do that with sports betting with the click of a mouse. If this is the future of gambling, it is indeed frightening. Urgent action is needed.

As bad as things are with poker machines they can get much, much worse with online gambling. This is the new frontier for gambling expansion. We are already the worst in the world for per-capita gambling losses and, dare I say, gambling addiction per capita. This bill at least opens up the debate in relation to these issues.

I will address shortly, perhaps after the dinner break, a number of the measures in the bill. The bill needs to go further, but it is important that it be put into context about the seriousness of the problem we now fact in relation to this.

Sitting suspended from 18:30 to 19:30

Senator XENOPHON: The issue of online gambling is one of critical importance. More and more Australians are falling prey to gambling addiction because of online gambling and because of sports betting. There is nothing like the pernicious advertising of sports betting; it is in your face at sporting games and during sporting broadcasts. That is why it is important that we also reform the issue of online gambling advertising for sports betting advertising. It does seem incongruous, it does seem like a loophole and it does seem unacceptable that there is one exemption to the situation where, in the ordinary course of events, the current ACMA rules say you cannot have gambling advertising during a G-rated time. There is one exemption to that and that exemption relates to sports broadcasts.

If you are broadcasting a game, you can advertise gambling products during that game. I would have thought that is the one particular event watched by families and watched by young children that ought to be the subject of a ban not an exemption of a ban during G-rated times. It is very disturbing that eight-, 10- and 12-year-olds—according to the many parents I speak to with young children—tell their parents about the odds of a game. It is very concerning that gambling behaviour is normalised amongst children in that way. I do not want the kids of today to become the gambling addicts of tomorrow. This bill at least opens up a debate and at least tries to restrict the issue of in-play betting. As imperfect as this bill is, at least it means that we are actually beginning to grapple with this problem.

This is an issue that goes back many years. Back in 2001 I was a member of the Parliament of South Australian and I was here lobbying members of this chamber to have the interactive gambling bill passed by the Senate. It was touch and go. I remember seeing: the late Senator Brian Harradine; the One Nation senator, Senator Len Harris; the then communications minister, Senator Richard Alston; and the many others that I spoke to in the course of the week that I was in Canberra. I was doing my bit, along with supporting the Reverend Tim Costello, to ensure that the bill was passed. It was certainly an improvement on what we had before, which was not much at all.

But, whilst that bill was passed 16 years ago, it may as well have been passed 160 years ago, because so much has happened in the online gambling space since that time. This bill, at least, is an update of sorts, but I think it is interesting to reflect that back in December 2011 the Joint Select Committee on Gambling Reform during the period of the Gillard government prepared its second report on interactive and online gambling and gambling advertising. Back then, it was clear that overseas gambling websites were a real problem that needed to be addressed.

I referred in my additional comments to that report to one particular case of a constituent that had serious problems with, a site hosted in Singapore but licensed in Gibraltar. It has an Australian flag in the background and lists of Australian winners and it takes bets in Australian currency. This individual, and of course I will do nothing to identify him—my colleague Senator Kakoschke-Moore worked on this particular case, advocating for him as a constituent—initially appeared to win thousands of dollars. He tried to withdraw it, but he could not withdraw it. He got free credit, $250, on condition that he play certain games, which he did not wish to play. Within about two months, he was up $90,000. He seemed to win the money very easily with the casino games he was playing, but then he started to lose. At one point he lost $50,000 in a day. He was given free gifts: an iPod; a laptop; an iPhone 4, back then; a free trip to anywhere in the world plus $5,000 spending money. He was a VIP customer. The website then made $90,000 of unauthorised transactions from his credit cards. He made official complaints to three banks which have now reversed the transaction, but his total still stood at $120,000.

This case illustrates that the potential for harm with overseas sites is great, and the regulatory framework in some of these countries is grossly inadequate. Try writing to the regulator in Gibraltar, and good luck to you. I have, and you are lucky to get a response in any form of timeliness. I think that it indicates that we ought to be able to tackle these overseas sites. That is why I will be moving an amendment in relation to that.

We have heard from a Canadian based company called Netsweeper, which says that you can block these sites. You can take action in respect of these sites. They say there is a way to do so. I will refer to that in the context of this amendment when I move it, but there are arguments that should be counted. There is an argument that an offshore, unlicensed, online gambling company can simply change their domain, the URL, to avoid blocking from Australia, and so accept Australian customers.

Netsweeper is one of many on the market that are dealing with these issues The Netsweeper policy server and technology crawls through the internet daily for online gambling keywords. If an unlicensed company attempts to change its URL to avoid blocking, then Netsweeper will simply crawl, locate and categorise the new URL and therefore block it. The argument given is one that I think Senator Leyonhjelm referred to when he actually advised people what to do, to use a VPN to avoid website blocking. What Netsweeper, and I believe others, would say is that the KYC documentation of online gambling firms states that any customer who attempts to make a deposit with an Australian credit card, e-wallet or bank wire service must be registered with an Australian IP address or the deposit will be voided. Furthermore, if a customer attempts to withdraw funds, then a copy of the player's passport and a utility bill must be provided. If this documentation does not correspond with the Australian IP, then the customer's account will be suspended and the funds will not be dispersed. The online gambling industry has numerous security measures in place to avoid fraud and bonus abuse, often focusing on ensuring country identity. So you can deal with that argument.

The other argument is that blocking gambling websites will inadvertently also block gambling websites that may be properly licensed in Australia or that may have no relationship to gambling at all. The websites of all gambling companies that are properly licenced in Australia would be added to a whitelist of allowed sites with a deployed Netsweeper filtering system—or, indeed, other filtering systems—and using artificial intelligence engines to ensure that non-gambling websites are not blocked, with a final human review element used if required. So we can attempt to do this. When you consider the level of harm caused by online gambling, particularly from these unlawful sites, it is worth giving it a go.

During the joint select committee inquiry back in 2011, evidence was given by the Australian Bankers Association. I remember asking questions of then CEO Steven Munchenberg, the outgoing head of the ABA, who essentially said, 'Yes, we can cooperate in relation to this in terms of the big banks to block those sites.' They were already blocking other sites for various purposes, such as terrorist related purposes. It can be done if there is political will to do so. Considering that hundreds of millions of dollars are being lost to these unlawful sites, that is something we should attempt to do with alacrity. We need to tackle that.

It is also worth referring to the issue of domestic online sports betting websites. Back in 2011 the University of Sydney Gambling Treatment Clinic—the GTC—gave evidence saying that only five per cent of their clients in the 2006-07 financial year were reporting problem gamblers with sports betting. Problem gamblers with sports betting represented 15 per cent to 20 per cent in 2010-11. That was five years ago. I suggest that figure is now much higher. There has been an exponential increase in the growth of sports betting. There are now greater opportunities to gamble—every mobile phone can be turned into a betting terminal—and there is now the ability to cause much more harm, much more quickly. That is why this bill is welcomed, but it needs to go much further.

It is also worth reflecting on the research of Associate Professor Samantha Thomas and Dr Charles Livingstone, who have done terrific work in relation to online betting. Associate Professor Thomas did work on this a number of years ago. She found that young men in particular felt ostracised and felt isolated from their peer group if they did not gamble, such was the pressure to be part of a gambling culture. That is something that is very concerning and it is something that can drive levels of gambling addiction. Associate Professor Thomas has also done work on the number of young children who can recognise a sports betting operator, and the figures are staggering. Something like half of the young children she spoke to could recognise at least one sports betting agency—or an even greater amount. I do not have the figures in front of me, but it is a very significant number of young people who recognise it. We are talking about children.

Associate Professor Thomas has also made the point that schemes like Mad Bookie offer sponsorship to community sports clubs, which I think is quite pernicious. They offer clubs cashback if members sign up and bet on their website, and clubs are promised a 25 per cent cash rebate from members' losses each month. That raises very serious ethical issues—that is, to draw in a local club, a community club, into these sorts of schemes and arrangements. She says that schemes like Mad Bookie promote risk taking because there is perceived reward, even with gambling losses. Associate Professor Thomas said that the concern is that we will have a generation of kids who will are naturally transitioning to betting because it is in that club environment that kids are exposed to. Associate Professor Thomas said, 'Given our research, and considering how much kids are absorbing, having gambling sponsorship at a community sports club would not be consistent with a health promotion environment for kids.' She says that sports betting is being normalised for young children. She says: 'Kids tell us that they see gambling ads everywhere; they cannot escape them. You can't watch a game of footy or go to a sporting event without seeing them. Signage can appear to be quite harmless, but when you talk to kids, it is those kinds of things they see regularly and it becomes a natural part of their environment.' That is something that is very disturbing.

In fact, it was a 2016 study co-authored by Associate Professor Thomas that found that 75 per cent of children aged eight to 16 years believed wagering was a normal or common part of sport, and could name at least one gambling brand. One-quarter of the children could recall four or more betting brands, and three in four children could recall at least one. Many could quote specific promotional offers and could talk in terms of cashback or refund promotions and bonus bets. This was in an article in QWeekend not so long ago.

I just would reflect on another issue based on a discussion that I had with Senator Hanson and her colleagues earlier this evening. They indicated that they will be seeking to move another amendment on those online betting services that offer you the chance to bet on the outcome of those megalotteries overseas. is a prime example of that, but there are others. This is an important issue, and that sort of betting ought to be prohibited. I understand that Senator Hanson and her colleagues are looking at moving an amendment in relation to that. I absolutely commend her for doing so, if that is what she will be doing in expressing those concerns. I share those concerns. It is absolutely important that we grapple with this because this bill should be the beginning of a series of legislative measures to deal with the impact of sports betting and the impact it is having on young people in particular around the country. I know from the work I have done with my colleague Senator Kakoschke-Moore that our current regulatory frameworks are pathetic. Our current regulatory frameworks are woefully inadequate.

The Northern Territory regulator, in dealing with online betting, have let down so many people. They do not appear to be a regulator with any degree of rigour. They are not a regulator that can be respected. They are a regulator that have ignored serious issues in terms of problem gambling behaviour and breaches of codes, and have been completely or largely ineffective. That is why a national response, in the absence of a strong state or territory based response, is important. That is why I see this bill as a first step to many other steps that must be taken.

Too many young people and too many members of the community are being bitten by the gambling bug because of online gambling. Too many young men in particular are missing out on a deposit for a first home, buying their first car or planning that overseas trip because they have blown it on online gambling. It causes huge scars for them emotionally, as well as the financial scars it causes. That is why this legislation should be seen as the beginning of the debate and not the end of the debate for the reforms that we so sorely need in terms of online gambling in this country.