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Environment and Communications Legislation Committee
07/03/2017

CONROY, The Hon. Stephen, Executive Director, Responsible Wagering Australia

CHAIR: I now welcome Mr Stephen Conroy from Responsible Wagering Australia. Information on parliamentary privilege and the protection of witnesses and evidence has been provided to you. I invite you to make a brief opening statement, and the committee will then ask you some questions.

Mr Conroy : Thank you very much and thank you for the opportunity to present. I would like to thank the committee for the opportunity to appear to discuss the Interactive Gambling Amendment (Sports Betting Reform) Bill 2015. I would also like to acknowledge Senator Xenophon's longstanding commitment to reducing the harm caused by problem gambling. His commitment to this cause is admirable, and I look forward to working with him and with politicians of all political persuasions to improve the standards within the wagering sector.

Given Responsible Wagering Australia is a relatively new organisation, I thought it might be useful to the committee if I took a few moments to explain our role, membership and views on some of the key issues canvassed in Senator Xenophon's bill. Responsible Wagering Australia, or RWA, was launched late last year as an independent representative body for the Australian online wagering industry. Our members include bet365, Betfair, CrownBet, Sportsbet and Unibet. RWA has an independent board, which includes former Tasmanian senator Richard Colbeck as chair, and we are in the process of recruiting additional board members, with a focus on candidates with regulatory and academic backgrounds.

RWA's objective is to ensure that Australia has the best conducted, socially responsible wagering industry in the world, and to that end members of RWA are required to uphold the highest standards of integrity and probity. Our members will be bound by an industry-leading, publicly available code of conduct, which includes commitments to meet global best practice in the responsible provision of gambling and harm minimisation. This includes, for example, commitments to support further government regulation that reduces the level of gambling advertising, requires operators to offer a broader range of time-out, self-exclusion options, prohibits sign-up offers on a national basis, ensures customers have access to information and account statements, and to advocate for regulatory reform to prohibit the offering of credit betting facilities. I understand that as part of that debate there is discussion around what are referred to as high-value or VIP customers, and we welcome that discussion.

Our code of conduct also enshrines the commitment of our members to enhancing integrity in sport, including working with governments, sports bodies, law enforcement and industry to improve identification of fraudulent betting activity and to help stamp out the integrity risks posed by illegal offshore betting. Importantly, our code of conduct is enforceable, with breaches punishable by sanctions. This includes monetary penalties and, ultimately, potential exclusion. A copy of our code of conduct will be available on our website shortly, as the website is going live this morning. With the agreement of the committee I would seek to, as it goes live, table that during the course of the morning, or possibly afternoon, depending on exactly when it goes bing.

Noting RWA was established after the submissions to this inquiry closed, I also propose to submit to the committee a longer written statement that outlines RWA's position on the major elements of the Interactive Gambling Amendment (Sports Betting Reform) Bill 2015. I trust the committee will be pleasantly surprised with the number of measures in the bill that RWA supports in principle, even if we may have reservations about certain implementation details.

While time is short, there are two points I would like to highlight this morning. The first is that we acknowledge that there is legitimate public concern about the level of wagering advertising, and we support government action to reduce the volume of wagering advertising. To that end, we call on the government to initiate a consultation process with the wagering industry, community groups, sporting organisations and broadcasters to devise a plan that will achieve meaningful reductions in wagering advertising. The second point I want to highlight is that, as a general principle, we believe that the regulatory environment for wagering should be technology neutral. We absolutely acknowledge that appropriate harm-minimisation mechanisms must be in place, but we also believe that that must be true for retail over-the-counter operators. The Senate currently has before it legislation that would, in essence, enable online in-play sports betting within TABs, pubs and clubs without any consideration of additional harm-minimisation measures. I want to acknowledge, as I mentioned earlier, Senator Xenophon's advocacy on this issue and urge government and opposition senators to carefully consider the potential impacts of the change before the parliament at the moment. In the interests of time, I will conclude my remarks. I look forward to your questions.

CHAIR: Thank you very much, Mr Conroy. I want to get into the issue of in-play betting. The companies that you represent are obviously quite concerned about in-play betting being unfair—that TABs and pubs can have in-play betting and that, potentially, offshore providers can have in-play betting, and yet there is a push to disallow the companies that you represent with Responsible Wagering Australia. Can you talk me through that argument.

Mr Conroy : At the moment, if you and the committee were to follow me down to Young and Jackson, a very famous Melbourne pub on the corner of Flinders Street, we could access live in-play sports betting and live in-play other types of betting. If you met anybody involved in the harm-minimisation processes in that pub, I would pay you $10. You can stand there and play for as long as you want in large groups. You can have alcohol in your hand while you do it. While I do not drink, as many of you would know, I have stood in a group and done this exact thing, and at no stage have any of the people with me been approached by anybody in the premises to do with harm minimisation. I think the O'Farrell report highlighted that there is a very mixed story around the country in terms of the harm-minimisation processes around in-play betting today.

We currently have one sector that is allowed to do in-play betting, with patchy, if at all, harm-minimisation processes, and we then, of course, have—if you take the approach that we are just going to ban it and pretend we fixed the problem—people who are consistently going overseas. The estimates of the flow of Australian funds and the number of Australians involved have been varied. O'Farrell did some work on this. I have seen estimates of up to 500,000 Australians betting on offshore sites. By definition, offshore sites comply with none of our laws. Live betting happens today. My members are excluded from it, and we support the O'Farrell recommendation that there should be no change to that until proper harm-minimisation processes are put in place. What we have seen is that the government's new bill in fact does not do that. It says it wants to ensure there is no new live betting but then is allowing the existing operators—the TABs, pubs and clubs—to roll out iPhones and iPads which will be used in a way that has been of concern to people in the sector. The concern has been that you can just repetitively press your iPad or iPhone and keep making bets without any supervision, oversight or harm-minimisation procedures. Our concern is that that is not actually the intent of the bill. We were quite surprised. We teased out the interpretation at some Senate committee hearings late last year. The officials admitted, 'Yes, this will be allowed.' Tablets will be allowed in pubs, clubs and TABs as part of this new legislation. We think the proper harm minimisation procedures are not around that at this stage, and we think it allows the existing TAB-Tatts conglomerate—which is possibly about to become one of Australia's biggest monopolies—to move without adequate supervision into this area using new devices like tablets and iPhones. So we have a genuine concern that the harm minimisation procedures which our members are committed to are not reflected in the practices around the country. The O'Farrell report highlighted that and makes it quite clear that it is very patchy.

Even if you were to say, 'Okay, we're going to close down live betting in Australia, even for TABs, pubs and clubs,' you would still have the problem that Australians are going offshore today. If we want to put the best world-leading harm minimisation practices in place then those offshore operators, who are not licensed in Australia, will ignore any and all of our legislation, and it will be money for jam for them. You will be driving Australians offshore if you take the approach that you do not support live in-play betting, because Australians are doing it. We believe there should be technology neutrality, there should be absolutely the world's best leading harm minimisation procedures around in-play betting.

CHAIR: Let me get this right: what you are saying is that they only way to level the playing field is to allow for in-play betting; that if we disallowed in-play betting, even if we did it across all forms of gambling within Australia, it still would not be a level playing field.

Mr Conroy : What will happen is that the offshore operators—the sharks, the spivs, the people who will just happily take everyone's money in any circumstance—will be the beneficiaries. If you want to take the position that there should not be any and you would recommend that, all you would be doing is driving Australians offshore. There would be Australians who would suffer much worse consequences because of that because there is no harm minimisation; there is a loss of taxation revenue; and a loss of support for the various sporting codes and their practices. You would have a circumstance where you would actually be making the problem worse, even though it looked like you were doing something that made it better.

CHAIR: With the regulatory framework that exists at the moment, obviously, it is currently state-based; do you agree, or does Responsible Wagering Australia agree, that a more effective solution is one that is crafted in consultation with the states and with each state government, but from a federal level?

Mr Conroy : We welcome the initiatives that are underway at the moment—the discussions that are taking place. We support, in principle, the idea of the national regulator who would oversee this. There is a number of issues where we would want to have a genuine industry dialogue to ensure that the way things were implemented worked in the way they were intended but, in principle, we welcome the discussions, we welcome the announcement by COAG and all of the governments and, obviously, we are keen to participate on a whole range of the clauses that have been mentioned in the press releases and in the discussions.

CHAIR: On the issue of self-exclusion, the companies that you represent ostensibly advertise self-exclusion on their websites. Is that correct?

Mr Conroy : Yes.

CHAIR: Do you know how prominent that advertising is?

Mr Conroy : We would believe that, as part of a national framework, there needs to be greater prominence across the whole sector—not just my members, not just the online companies that are not members, but across all of the sector. We would like to see an affirmative decision made. I have always had concerns where you have to opt out, where it is, 'Tick this box to say "I don't want to be included".' I think that, nowadays, if you log on to a golf membership site there are fields that you must fill in before you can progress to the next page. I think Australians should be in a position where they absolutely affirmatively make a decision before they can move on to the other pages. I think that, in terms of making it prominent, if you cannot go past the page until a decision is made, that makes it pretty prominent. We think that those are the sorts of initiatives that are very worthwhile.

We have seen some reporting, and there was an industry conference recently where there were some discussions about the style of the national self-exclusion register, if I can use that phrase. We are concerned that some of the thinking did not go as far as we would have hoped. My members are very keen for a national system where people notify and then they cannot sign up across any other company if they are on that register. A sort of email-type process has been discussed and, to be fair, it is just a discussion at this stage. We think there is more and there can be a stronger position—Senator Xenophon has articulated some of that—but we are supportive of the general direction.

CHAIR: Let me be clear in my final question: obviously, Responsible Wagering Australia supports the intent of this bill—

Mr Conroy : Yes.

CHAIR: but it does not support it passing—its content?

Mr Conroy : We think the general principles here are very worthy and we support many of them. We absolutely support the government's bill that is in the parliament at the moment. It does not go quite far enough in one particular area, but we welcome 99.9 per cent of that bill. Senator Xenophon has raised some issues and I understand he intends to bring amendments forward, possibly similar to some of the issues in his bill. Subject to the implementation and how it is intended to be implemented, while we have some concerns, we think there are many issues in this bill that are very worthy and deserve support.

CHAIR: Terrific. Thank you, Mr Conroy—I cannot get used to that.

Senator KAKOSCHKE-MOORE: Mr Conroy, I want to go to the issue of when disputes arise between, perhaps, your members and their customers. In my experience dealing with constituents who have had disputes, I have found the responses from many of these operators to be, frankly, quite appalling. They will either ignore the complaint, delay or give ridiculous excuses about why they are not going to cooperate, and, while this is all happening, constituents are at risk of bankruptcy and some have lost their homes. What role do you see Responsible Wagering Australia playing in improving the way in which your members interact with customers when disputes arise?

Mr Conroy : I have become familiar over the last few months with a number of examples. I think that the industry wants to lift its game in this area. I think the companies that I represent want to play a more proactive role and, while I am not in a position where I could ever comment on individual cases—as I am sure you would understand—I would be happy to facilitate discussions to try and help achieve outcomes. I am not an ombudsman—obviously I am representing the companies, so it is an independent board—but certainly I think that where cases come to light where there are concerns, the sector wants to take an improved role in resolving those issues.

Senator KAKOSCHKE-MOORE: A lot of the motivation for this bill stemmed from a deep dissatisfaction with the way current regulations are drafted at the state based level and then enforced. I am curious whether you are able to provide the committee, from your members, information about the number of interactions they have had with state based regulators where the regulators have investigated your members for potential breach of the code, and any penalties that were applied.

Mr Conroy : I am happy to ask the members if they would like to provide that information. Some of it may be commercial-in-confidence. There could be a range of issues, but I am happy to ask them if there is any information they can provide.

Senator XENOPHON: Why would it be commercial-in-confidence if they have had to deal with a complaint from the regulator?

Mr Conroy : I am just being cautious, Senator Xenophon. I am indicating that I am happy to raise the matter with the members to see if there is any information they can provide to you. But I am just being cautious.

Senator XENOPHON: Now you are cautious. You were not cautious in the Senate!

Senator KAKOSCHKE-MOORE: There has been some discussion this morning about the use of algorithms to identify patterns that might demonstrate that somebody has a gambling problem. Can you tell me if any of your members utilise algorithms in their businesses?

Mr Conroy : I would have to ask them individually to give you a comprehensive answer to that.

Senator KAKOSCHKE-MOORE: Could you?

Mr Conroy : I am aware of some work that is being done in the UK to use algorithms to identify problem gamblers. My understanding so far is that they are not good enough that you would say that this is the silver bullet to fix this problem. But I am aware that work is being done internationally and our members are obviously conscious of that. On the algorithm question, I am happy to seek some information from the members and put a response to you on that.

Senator KAKOSCHKE-MOORE: If you would, that would be great, thank you. The code you mentioned this morning that is going live at some point today, how does that code discuss approaches to potential problem gamblers? Does that feature in the code at all?

Mr Conroy : We understand, as I mentioned earlier, that there is a discussion around credit betting. We would like to see credit betting ended, with a reasonable phasing-in period—perhaps 12 months. I also understand, as part of that—I do not want this to be a salami-sliced answer—that there were discussions around, as I think I mentioned, a VIP card. We would welcome that discussion, to see if there were an agreement that could be reached. In terms of credit, it is an area our members are very concerned with.

Senator KAKOSCHKE-MOORE: But if you operate a venue in South Australia and you have poker machines there, the responsible gambling code of practice requires you to have mechanisms in place to identify potential problem gamblers and how to make approaches. Does this code do that for the—

Mr Conroy : Our members actually have. In the past, perhaps, it has not been as rigorous as it is today, and some of the work that yourselves and others have done in this area has helped inform the members. Part of my getting to know the sector has been to go into each individual company, sit down with them and talk about how they work their harm-minimisation practices: looking at when the flags go off—if someone's betting pattern suddenly changes, what do you do then? Phone calls are made, questions are asked and attempts made to ascertain financial situation are all part of that process.

Our members have been doing that for some time. It has not always being perfect in the past—I do not think anyone would argue with that—but our members are striving to lift their game in this area specifically. We are engaged in discussions about what we can do to keep improving so that we can identify customers, have those discussions and try to offer them, which our members currently do, what is referred to in the sector as a 'time out', whether it is a seven-day time out, or a month time out or a 12-month self-exclusion. All of our member companies have processes like that in place today, and that is part of being a member of RWA; you have to have those practices.

Senator KAKOSCHKE-MOORE: But the code itself that is being launched today does not go into harm minimisation?

Mr Conroy : We do not specify individually, 'At this stage you must do this, this and this'. I have been satisfying myself as I have been going around that they are rigorous and robust. Are they perfect? No. Privately, I might say, 'Look, what about this; what about that?' in discussion with the members, but I think it would be helpful, again, if I gather some information. We have only been on the books for three and little bit of months. I am gathering a lot of information, because these are the sorts of questions and information that I think will inform the debate: what is the average bet of the average Australia? What are your harm minimisation procedures? Gives us a summary so that we can show that we want to be a leading harm-minimisation group of companies. Again, I am happy to gather information for you that gives you an outline of what the procedures are for each company.

Senator KAKOSCHKE-MOORE: What is the name of the code of conduct that is being released—

Mr Conroy : It is the 'code of conduct'.

Senator KAKOSCHKE-MOORE: Just the 'code of conduct'?

Mr Conroy : You will be able to click on the website. There is a tab that says 'code of contact'. Hopefully, very soon it will be live and you will be able to click on it and see it.

Senator KAKOSCHKE-MOORE: If the name implied responsible gambling code of conduct or—

Mr Conroy : It is on the Responsible Wagering Australia website and there is a tab that says 'code of conduct.'

Senator KAKOSCHKE-MOORE: Yes, but it is a code of conduct about responsible wagering that does not go to harm minimisation?

Mr Conroy : As I said, each individual company has significant—I think you will be surprised. It is an excellent question and I am happy to put it forward to the committee for your consideration, once I have asked them to provide that in a consolidated form, so that you can see it. I genuinely think you will be surprised at the processes that each company is enforcing rigorously.

Senator KAKOSCHKE-MOORE: Thank you.

Mr Conroy : You may say, 'Hey, you can do more; you can do different,' but I think you will surprised at what they currently do.

Senator KAKOSCHKE-MOORE: Just one final question, in relation to the support you expressed earlier for banning credit betting. Is that banning credit being offered by operators? How do you define credit?

Mr Conroy : A line of credit is probably the simplest way to do it. People often say, 'Look, here's $10,000, here's $50,000,' and in the VIP-type circumstances, 'Here's hundreds of thousands of dollars.' We are all familiar with the casino-betting issues at the moment. As I said, subject to the similar physical land-based issues—the issues around VIPs and people who you would consider as, 'Well, they've got enough wealth, they've got enough ability; it's up to them how they want to behave'—we would want to see lines of credit phased out subject to that discussion around VIPs. It could be that there is no agreement, but in general the members have the view that that is a responsible way to behave.

Senator XENOPHON: Mr Conroy, does the code of conduct have any sanctions for breaches of that code of conduct?

Mr Conroy : You came in just as I had gone past reading that section.

Senator XENOPHON: Does it involve a dispute resolution mechanism for people who have lost money as a result of a breach of the code of conduct?

Mr Conroy : We are not an ombudsman—

Senator XENOPHON: No, you are not an ombudsman, but what sanctions are there for a person who has lost money as a result of a breach of the code of conduct?

Mr Conroy : There are monetary penalties, and the ultimate sanction is to be expelled.

Senator XENOPHON: That is the ultimate sanction—so they would no longer be in Responsible Wagering Australia.

Mr Conroy : Yes, but there are monetary penalties as well.

Senator XENOPHON: That is cold comfort to someone who has lost their home as a result of conduct that has been a breach of your code of conduct, is it not?

Mr Conroy : As with previous questions from the senator around how we handle individual customer issues, RWA has no role as an ombudsman in giving direction. I have offered to help where I can, and the members accept that past practice is not—

Senator XENOPHON: I appreciate that and I appreciate your endeavours in this regard, but the fact is it appears to be the case that the code of conduct provides no dispute resolution mechanism or pathway for an aggrieved person.

Mr Conroy : It is not intended to be an ombudsman-style role. It has not been set up, the Constitution has not been established in a way, that allows it to play a role between individual disputes and the member company.

Senator XENOPHON: So if an individual has lost money as a result of a breach of the code of conduct, what occurs then? What is the remedy? Who do they go to other than going to a state- or territory-based regulator?

Mr Conroy : The national regulator that has been discussed could be one place for it to be inserted. I stress again that the RWA itself has not been established with a view to having an ombudsman-style role between customers and members. As you say, there are state regulators that people can approach, and a national regulator might become part of that discussion.

Senator XENOPHON: Does the code of conduct lead to legal liability on the part of the operators if a person has a grievance? In other words, does it lead to a potential cause of action in terms of civil law, tort law or contract law? If the code of conduct is breached, does it actually give a right of remedy through the courts, through the legal system, for those aggrieved patrons? If it does not, I query its effectiveness.

Mr Conroy : You have me at a disadvantage. I know you are a lawyer; I am not.

Senator XENOPHON: Do not hold it against me!

Mr Conroy : I have always held it against you! I am not a lawyer, so I would have to defer—

Senator XENOPHON: Could you take that on notice?

Mr Conroy : I am happy to take that on notice.

Senator XENOPHON: Very quickly, I need to go to the issue that the Financial Review reported recently. Bryce Corbett described your organisation as:

… a little bit like having your local chapter of Alcoholics Anonymous brought to you by Jim Beam.

I thought that was a bit unkind, but he does make the point that William Hill, run by Tom Waterhouse here, is planning to boost ad spend from 26 to 28 per cent of net revenue, to about $58 million. What is the position of Responsible Wagering Australia when it comes to advertising betting during games that children are watching during what are clearly G-rated times? And of course there is an exemption under ACMA at the moment.

Mr Conroy : I did note that article with amusement. Having had much experience with reporting in the media, like you, Senator Xenophon, I do not believe everything I read. William Hill are not members of RWA at this point in time. RWA's position, as I articulated earlier in my discussions, is that we believe the community wants to see a reduction, and our members support a reduction in advertising—

Senator XENOPHON: Sure, they support a reduction, but what about advertising during G-rated times, where you are bombarded? Parents come up to me in the street. My colleague Senator Kakoschke-Moore has the same experience, where people say, 'We're sick of our 10 and 12 year olds being bombarded with gambling ads when we're trying to watch a footy game on TV.'

Mr Conroy : I think they are very legitimate concerns. Since I have taken on the new role, one of the first and obvious questions that people raise with me is the level of advertising. That is why our members recognise that this is a problem and want to reduce it. Because of ACCC competition issues we cannot take a position individually or collectively, because there are competition issues around this, but we are strongly advocating that the government regulate to reduce the amount of gambling advertising.

Senator XENOPHON: And during G-rated times?

Mr Conroy : That is on the table as part of that discussion.

Senator XENOPHON: And what is the position of your association about sports-betting advertising during G-rated times?

Mr Conroy : We are involved in the discussion and we are advocating a reduction in total—

Senator XENOPHON: You are not answering the question.

Mr Conroy : No—

Senator XENOPHON: If you were on the other side of the table, you would be getting very frustrated and angry by now!

Mr Conroy : We are involved in discussions at the moment with the sector and with the government, and I do not want to—

Senator XENOPHON: So, you cannot answer the question. Do you have a position about sports betting advertising during G-rated times?

Mr Conroy : We have a very clear position.

Senator XENOPHON: Well, what is it?

Mr Conroy : We support a reduction in the amount of advertising on television across the board.

Senator XENOPHON: That is not answering the question. Across the board?

Mr Conroy : Across the board includes that period as well.

Senator XENOPHON: Which means there still could be some advertising during G-rated times.

Mr Conroy : I do not want to pre-empt where these discussions are going to finish—

Senator XENOPHON: All right—

Mr Conroy : but I think we are going to see an outcome that the community generally supports.

Senator XENOPHON: My final question, and Senator Kakoschke-Moore is very familiar with this, is that we have dealt with constituents who have lost everything through sports betting, and one of the triggers that drove addictive gambling behaviour was that they were roped in by the credits—not a line of credit, but they were roped in by, 'Here's $500, here's $1,000—keep betting.' What is the position of Responsible Wagering Australia in relation to that?

Mr Conroy : Our position on inducements is that we want to see a ban on inducements to entice new members. Where there is a pre-existing relationship between the company and somebody who is a signed-up member, obviously, marketing is part of any business—

Senator XENOPHON: Do you support mandatory precommitment?

Mr Conroy : We support voluntary precommitment and, as I said earlier, we support an affirmative choice being made so that people can nominate a threshold and can nominate whether they would like to take that up or not—

Senator XENOPHON: So what is wrong with having—

Mr Conroy : The individuals make the choice.

Senator XENOPHON: Okay. But why not, before anyone signs up to a sports-betting account—or if they renew it, have a grandfathering period for within 12 months—just let the individual say, 'I want either unlimited betting or I actually want a limit'? Give them a choice as to whether they want to be unlimited or limited.

Mr Conroy : We are offering them that choice. As they go through to sign-up they will make an affirmative decision: mandatory or voluntary, 'Do you want to be part of this system?'

Senator XENOPHON: But you can always change it, can't you? You can always switch to another—

Mr Conroy : Freedom of choice is still available in this country for people to make their own decisions. But—

Senator XENOPHON: But the effectiveness of it is limited.

Mr Conroy : No, I disagree with you. I think that the question, and the tenor of the question earlier, was that sometimes you struggle to find where you can adopt. What I am saying is that it needs to be part of an up-front process. Most of our members have up-front processes. But, as a national uniform standard, a person should have to make an affirmative decision: yes, I am in or no, I am not in. That way, it is their choice. But it is not hidden in the back—you have to go through five pages: I think that is a legitimate criticism of the past. I think that the position of our members is to say, 'We want to see an affirmative decision made by an informed customer.'

Senator XENOPHON: Thank you. I cannot speak for the others, but on some days I do miss you in chamber!

Senator DASTYARI: Citizen Conroy, I have a few questions—

Senator WHISH-WILSON: Comrade Conroy!

Senator DASTYARI: Comrade Conroy! Just before we start with questions, it is great to see you here. A few of us have been waiting a lifetime to have this opportunity, so I just want to savour the moment.

Mr Conroy : The privilege extends both ways!

Senator DASTYARI: I just want to touch on the situation regarding William Hill that you mentioned, and which Senator Xenophon touched on. It appears that the type of advertising, the in-your-face form of advertising, used by companies—and I think that William Hill was picked out just by the sheer nature of how it was marketing aggressively—has led to a community backlash. Part of the frustration and anger of a lot of people was not just legitimate concerns about problem gambling but the idea that it was becoming difficult to enjoy sport through the sheer in-your-face nature of nonstop repetitive advertising for gambling. I wonder if you could just touch on how you get the balance right between what is obviously a source of revenue for the television stations to be able to provide sport and ensuring that it does not become something that is so intrusive and offensive that it makes the enjoyment of sport suffer as a result of it being too in-your-face.

Mr Conroy : Like all of you at the table, I am sure, I have experienced going to the football in person, with large billboards and the scoreboards containing the live betting odds. When I was, in a previous life, in charge of some of this area—which is well over three years ago, heading towards four years—I was in a position where I took a decision to ban live bet odds touting during matches. At the same time a number of sports and, importantly, grounds—the MCG is the one that sticks out for me—decided there would be no more live betting odds on the scoreboard. We announced, in cooperation with state governments, that they would find ways to reduce the amount of live betting advertising outside grounds. So I think there is absolutely a legitimate concern that built up a few years ago. Action was taken by the government of the day, but I think it has now reached that stage again where there is a genuine community concern and parents are worried that children equate the odds with the contest, which is why we support and welcome the discussions that are taking place today and into the near future around reducing the amount of advertising on television across the board in this area. I think that there is community disquiet, I think my members recognise that, and I think I could quote a couple of CEOs of members who have publicly articulated that they want to see a reduction in advertising. So I think the members have recognised that it is building up a head of steam. It is becoming a problem in the community.

Senator DASTYARI: And it becomes an arms race.

Mr Conroy : There is that. Part of the reason that we advocate that the government take a step, as I mentioned, is firstly that there is a competition issue if we were to advocate that our members will do this but secondly that, if our members stopped advertising, the companies who are not members would simply step in and fill the void. So, to try to ensure that it is done fairly and properly, we support the government reducing and moving in this direction. I think all parties seem to have taken up the bit on this in the last month or two. So we would welcome that. We accept the community concern, and we are very keen to be involved in those discussions, and we are part of that broad process at the moment.

Senator CHISHOLM: Mr Conroy, I will not check if your website hold-up is based on the NBN problems.

Mr Conroy : I assure you that the copper based system is just flying!

Senator CHISHOLM: I was interested in the offshore issue that you talked about. I suppose I just want you to elaborate on what you see the risk is if changes made in Australia drive people offshore and what are the key differences between the companies operating offshore and those in Australia.

Mr Conroy : The essential difference is that the international companies do not have a licence, and the sorts of companies we are talking about are based in all sorts of surprising tax havens and the like. The fundamental bottom line is that they have no—zero—harm minimisation processes. It is not that they have them and they do not enforce them; they do not believe in them. They do not advocate them. So any Australian who goes to one of these sites can be taken to the cleaners, and they have no redress. There is no point in calling Senator Kakoschke-Moore or you if you are on an overseas website, because you have zero redress, and you can lose your house and everything, and they will just move on to the next Australian customer.

The processes that we have in place, as I said, in the past have not always been perfect, but, when you see the information that I will gather from the members on what the actual processes are, I think you will be surprised at the step-up that has taken place in the last few years to try to make sure people do not get themselves into trouble. That is not to say it can be perfect. All systems have flaws, and Senator Kakoschke-Moore has raised cases with me in the past, and I am sure she will be raising cases with me in the future. But I think you will be surprised when you see the strength. And if there is a national system put in place, I think if we can codify that that would be a big step forward. So we will be in this debate. My members want to be responsible and they want to put in place processes that are world-best harm minimisation. So you have a choice: you can have world-best harm minimisation or zero. So if you put in place a system that drives Australians offshore for live betting, then that is what will happen to them. Or you can drive them down—as I said, at lunchtime we can all go down to Young & Jackson and engage in some live betting. I do want to stress again the point I made earlier: live betting is taking place today in sport. Down the corner at Young & Jackson, in every TAB, every pub, every club, it is happening today. It does not have, as O'Farrell found, the requisite harm minimisation processes around them. I think you would all be quite shocked if you went through an examination. South Australia is better than most because it has been more active on this issue, but the rest of the states do not have the sorts of things we are talking about enshrined. I think we are in a situation where, if your choice is between zero and world's best, I would take world's best any day.

Senator CHISHOLM: In terms of the companies that you represent, through their app can you deposit money into your account using your credit card?

Mr Conroy : Most online transactions, in any sector, are via credit cards. We also have debit card facilities. I have seen recently some discussions around the use of credit cards. All banks have responsible lending policies. Banks have a fiduciary obligation to ensure that they are not lending to people who cannot afford to pay it back. So there is a self-imposed credit limit by a bank when it comes to a credit card. There is a set of circumstances where people might not be telling if they have four credit cards. I accept that that can happen. But each bank has a fiduciary duty to ensure that it is not lending irresponsibly to people who cannot pay that money back.

I have had meetings with people who are concerned about this issue. They have raised with me that they are seeing an increase in the number of clients that are credit card stressed, and the credit card stress is related to gambling. I have undertaken to meet with some of those financial counsellor groups to get a better understanding of how that is happening when, clearly, banks have a fiduciary responsibility to ensure that irresponsible lending is not taking place.

Senator CHISHOLM: So you see it more as an issue from a bank point of view than you do from the companies?

Mr Conroy : The thing about money is it is fungible. So you could say only debit cards and then you could transfer money from your credit card to your debit card. How can you tell that it is not, ultimately, the loan from a bank? How to you determine a debit card is purely cash rather than money you might have just transferred. So there are genuine difficulties about how you try and work your way through this. As I have said, I have undertaken to sit down with the financial counsellors from some of the organisations that I have been talking to to get a better understanding, to see what is happening and to see if we can work with them on this issue.

Senator CHISHOLM: In terms of the advertising—and I will focus on the TV advertising—there has been media speculation that there will be consolidation in the industry over the course of the next couple of years. That is not always gospel, but that is the case. Do you think that the amount of money spent on advertising is trying to drive market share to put them in a better position for potential mergers or acquisitions? Or—crystal balling—if there was consolidation, do you think that the amounts spent on advertising would decrease?

Mr Conroy : There is obviously—I think someone earlier mentioned—an arms race for market share. I cannot speculate. I see in the newspapers—and I do caution; as I said to Senator Xenophon, I do not always believe everything I read in the newspapers—there is one merger that we know is happening right now, and that is proposed between Tatts and Tabcorp, which would create up to an $11 billion monopoly in the marketplace. For our members, obviously, it is very competitive. It is not as profitable as people think it is because of that competition. There is always speculation that some of my member companies and non-member companies, and some of the non-member companies, may be in talks.

I am not privy to any of those discussions. I cannot comment on the motivation that drives some of that discussion or some of the leaks that you see in the newspapers.

Senator CHISHOLM: On the in-play betting, is the concern from your group essentially that it is not creating a level playing field and that it is potentially favouring one company over others in terms of the way the legislation is being interpreted?

Mr Conroy : There is no question that, if you can go into a TAB, a club or a pub, you can sit there and take your iPhone out and open the TAB app and you can place a live in-play bet and you are sitting next to Senator Dastyari—who is in the Parkes pub dressed as Elvis—and he wants to access Sportsbet, but cannot access the same set of products. So there is clear bias in favour of the TABs and Tatts operations. You can access them sitting in a pub but the person sitting next to you cannot use Sportsbet, bet365 or any of our other members' apps.

I have strongly argued that technology is march strong and is now being taken advantage of by the incumbent physical companies to move massively. If you read their annual report and you look at the press that they have done, you see that they are boasting that their future is in digital. They are literally saying, 'We're going digital. Our future is in digital.' It is in their annual report and its profit and loss statements. They are making it very clear that they are going to aggressively pursue this market. They are allowed to bet on one set of products and my member companies are not. I have spent many years grappling with these issues. It just seems that, in today's world, you should try to be as technology neutral as you can.

Senator CHISHOLM: I am more familiar with tax, being a Queenslander. Is that an overhang from them basically owning the state-based TABs?

Mr Conroy : Yes.

Senator CHISHOLM: So they own the bricks and mortar for those agencies that were in pubs—the monopoly that they used to have—and still have a bit of an overhang from a regulatory point of view?

Mr Conroy : This market evolved pretty much after the regulations were written. The definition of the internet has been of much merriment over the years in Senate estimates in the past. New technologies have come along and are accelerating the deployment of tablets to allow them to participate in the digital betting market. Yes, I would have to agree with your premise that this is an overhang and you have now what could ultimately be an $11 billion gorilla in the marketplace being advantaged at the expense of challenger companies coming into the marketplace.

Senator WHISH-WILSON: Mr Conroy, your argument today is essentially on the way this law is going to implemented and that consultation et cetera is predicated on if it is not done the right way it will drive potential online gambling users overseas. Tabcorp have given us quite an extensive submission. I am not sure if you have had a chance to read it. They have outlined a number of things in there that they believe could work in stopping the number of Australians using illegal sites overseas, including restrictions on financial institutions processing transactions to and from illegal wagering to providers. They have talked about the Singaporean approach, where they jail people if they are caught. They are not suggesting that, but they do talk about blacklists that have been set up by the Singaporean government, so that those websites just cannot be accessed at all from Singapore.

They have also talked about other mechanisms for repeat offenders who have been caught—using IP addresses, it is not that hard to work out who is using these overseas sites—and infraction notices being issued for repeat offenders. They talk about a number of things that could be used to stop these illegal operators from accessing the Australian market. Have you given any thought to those considerations?

Mr Conroy : Subject to the practicality of the implementation of those, we are generally supportive of any measure that can stop people accessing overseas unlicensed bookmakers. They have, as I said, no harm minimisation processes. So we would support any practical measure that helps stop putting Australians at risk on those international websites.

Senator WHISH-WILSON: Do you accept the bulk of the evidence the committee has heard about self-reporting and self-exclusions: that the people who generally do are only a very small percentage of problem gamblers?

Mr Conroy : As I said, we are only relatively new as an organisation. I have been conducting some surveys of our members about a whole range of issues. There is much public comment about this, and I always try to work on a facts based approach. I hope that I will be able to perhaps put in a supplementary submission to you after those surveys have been completed by the members. While we do not cover the entire sector, I hope we can paint a picture of what the average customer looks like, as opposed to the speculation, which would help us inform the discussions around the level of problem gambling as well.

One of the new things that the RWA will be doing is conducting its own research—independent outside people who come in and conduct research into this area—because our members, if they want to be seen be responsible, need to be seen to be conducting independent research and then acting on the basis of independent research. As I mentioned earlier—apologies to keep going—we are looking to bring onto the board people with a background in this area so that they can help drive research into this problem gambling area.

Senator WHISH-WILSON: Is there anything on websites currently—and maybe it is something you could consider, even if just on a voluntary basis—where it is simple for people to actually determine whether they are problem gamblers and whether they should be considering self-exclusion? Do you offer any services at all to people? Do you promote them?

Mr Conroy : As I said, if the flags go up—which is the sort of language that is used inside one of the companies when the betting pattern suddenly dramatically changes—our members call and try to have a conversation with them about their financial position: 'Hey, is everything okay?' I could get some of the information—

Senator WHISH-WILSON: You actually proactively do that?

Mr Conroy : They proactively call when there is a change in the betting pattern. This is to try to head things off, because the sorts of examples that Senator Kakoschke-Moore talks about are a bane for everybody. The individual is obviously massively impacted, but companies themselves—

Senator WHISH-WILSON: They are at risk.

Mr Conroy : need to be behaving responsibly, otherwise they can be justifiably criticised. So our members actually make those calls. I think you would be surprised at how far the sector has already come and how far it now wants to go in this space.

Senator WHISH-WILSON: So you are saying that it is symbiotic: that problem gambling is a risk for the companies, therefore that is something they do not necessarily want to see?

Mr Conroy : Our members want to be absolutely responsible so that they can minimise harm for the individual gambler. We are putting in place processes. The RWA wants to drive the debate. Evidence based material comes forward as part of our research, and we will be sharing that. We then expect our member companies to examine all of the issues that come through our own research. There is also other research, but I am familiar with the discussion that some of the research is not as—

Senator WHISH-WILSON: I think we have learned today that the research is not that in-depth, but we will look at the primary sources of what we have got available. But if you are doing your own research it would be very interesting at some stage, Mr Conroy, if we could find out exactly how many of those phone calls are made, and whether you detect problem gambling issues and how those issues may be solved.

Mr Conroy : I will happily talk to the members and, as I said, come back with some of that information around what their processes are. I think there will be some very useful information to lay out for the committee.

Senator WHISH-WILSON: You have acknowledged today to the committee that you accept that advertising needs to be reduced and there is a causation between increased advertising and increased betting. Presumably with that goes problem gambling or problem betting. Obviously, there is this argument that if restrictions are too tight or these things are banned then people will go offshore. Are offshore gaming operators not able to advertise in Australia?

Mr Conroy : The key part of a licence is that you can legally advertise.

Senator WHISH-WILSON: That's right.

Mr Conroy : The unlicensed companies just spam or use whatever methods for their online advertising. At the moment, as you would know, there are no restrictions on online advertising in any sphere, whether it is gambling or anything whatsoever. They are targeting people. They target them through other sites to drive people onto their sites. I know you would be very familiar with the fact that there are all sorts of methods used by these companies to try and drag people onto their sites. There have been soft sites, where you do not spend real money. You can gamble with fake money, but then they always try to suck you through into the real money sites.

Senator WHISH-WILSON: The evidence we heard today—and I was going to ask the same question that Senator Xenophon asked you—is that the problem seems to be fairly acute around sports events; it is the advertising at the events themselves. You mentioned the billboard as one example. The one I find most annoying is when advertising is flashing up around the edges of the game and you are trying to watch the footy, yet your eyes are drawn to the flashing.

Mr Conroy : There are mixed views. I think the G has put them in and Adelaide has put them in—

Senator WHISH-WILSON: Adelaide has them, yes.

Mr Conroy : I have heard complaints about Adelaide in particular. But there are mixed views. Some people look at it and think, 'Hey, it just adds to the atmosphere; they're moving, flashing lights. I am watching Collingwood win the next premiership, so I am focused on that.'

Senator WHISH-WILSON: You will be watching for a while!

Mr Conroy : But I think you saw last year's tennis, you saw that William Hill was a major sponsor at last year's tennis. The centre court advertising was not on show this year, if you looked at what happened last year. So I think sports are recognising that there is a limit to the type and style of advertising in the grounds. I could point to other companies that advertise less intrusively but just as effectively rather than the wham-in-your-face style advertising that you might see in Adelaide or at the tennis previously.

Senator WHISH-WILSON: Just as a matter of interest in relation to your previous response about William Hill, could you explain why they are not part of your association market share?

Mr Conroy : That is a private discussion. I would not want to indicate without their permission why they are not members currently.

Senator WHISH-WILSON: Can we draw from that they are not prepared to be responsible waging companies?

Mr Conroy : I think that would be an unkind thing of you, and I know you are a kind man, Senator Whish-Wilson.

Senator WHISH-WILSON: Okay.

CHAIR: Thank you very much, Mr Conroy, for your testimony here today. You are free to go.