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Interactive Gambling Amendment (Banning Social Casinos and Other Measures) Bill 2020

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2019-2020

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

 

 

 

 

 

Interactive Gambling Amendment (Banning Social Casinos and Other Measures) Bill 2020

 

 

 

EXPLANATORY MEMORANDUM

and

STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS

 

 

 

 

 

 

 

Circulated by authority of

Andrew Wilkie MP



Interactive Gambling Amendment (Banning Social Casinos and Other Measures) Bill 2020

 

OUTLINE

 

The Interactive Gambling Amendment (Banning Social Casinos and Other Measures) Bill 2020 creates a criminal offence and civil liability for any person who provides social casino services to Australian customers. Social casinos services are games of chance, or mixed chance and skill, which are played on applications or online and for which the customer gives monetary payment to play the game but cannot cash out their virtual chips for money. Currently social casino games are classed as entertainment so are not subject to any gambling regulations.

 

The bill also gives the Australian Communications and Media Authority (ACMA) the power to apply for Federal Court injunctions against carriage service providers to block domain names, URLS and IP addresses of online locations which provide prohibited interactive gambling services and prohibited social casino services to Australian customers. The injunction may also require an online search engine provider to take reasonable steps to remove a search result which refers users to the online location of the prohibited service.



The recent COVID-19 restrictions have led to greater numbers of people accessing online gambling services including social casinos. Online gambling carries similar risks as traditional gambling services, including addiction and subsequent mental and physical health implications. Online gambling services also carry heightened risks due to ease of access and use of mobile devices. The increasing popularity of social casinos in particular is problematic because such sites are attractive to new gamblers and children, many of whom go on to more orthodox gambling.

 

The bill targets provision of sites, operating as a disincentive for providers rather than penalising the user of the prohibited site or service.



FINANCIAL IMPACT

 

The bill will have no financial impact.

 

NOTES ON CLAUSES

 

Clause 1: Short Title

 

This clause is a formal provision and specifies the short title of the Bill as the Interactive Gambling Amendment (Banning Social Casinos and Other Measures) Act 2020 .



Clause 2: Commencement

 

This clause provides for the commencement of the Act on the day after it receives Royal Assent.

Clause 3: Schedules

 

This clause establishes that, as the intent of the Bill is to be realised through amendments to another Act, the Schedules of this Bill will amend that Act accordingly.

 

Schedule 1

 

Interactive Gambling Act 2001

 

Item 1: Section 4

1.     Item 1 inserts two new terms into the definition section of the Interactive Gambling Act 2001 (the Act). Firstly, the term illegal social casino service means a prohibited social casino service which is provided to an Australian customer contrary to the civil liability provision in subsection 15AB(3). Secondly, the term prohibited social casino service means a service for the conduct of a game of chance or mixed chance and skill, which is played for virtual currency on an interactive platform, and for which the customer gives monetary payment to play the game. The term interactive platform includes websites, downloaded applications and social media platforms.



Item 2: Section 8

2.     Item 2 inserts “or prohibited social casino service” after the term “gambling service”.

 

Item 3: Part 2 (heading)

3.     After “Designated interactive gambling services”, item 3 inserts “and prohibited social casino services”.

 

Item 4: After section 15AA

4.     Item 4 inserts section 15AB which makes it illegal to provide social casino services to customers who are physically present in Australia.

5.     Subsection (1) creates an offence for social casino services to be intentionally provided to Australian customers. The maximum penalty is 5,000 penalty units.

6.     Subsection (3) creates a civil penalty for provision of a prohibited social casino service to Australian customer. The maximum penalty is 7,500 penalty units.

7.     Subsections (2) and (4) provide that for each day the service is provided to an Australian customer a separate contravention is committed.

8.     Per subsection (5) the offence and contravention clauses do not apply if the provider of the service did not know, or could not with reasonable diligence have ascertained that an Australian-customer link existed at the time of provision. In the case of a criminal prosecution the defendant bears an evidential burden in relation to whether they did not know or could not have reasonably known the service had an Australian-customer link. Placing an evidential burden on the defendant is consistent with the Criminal Code Act 1995 (section 13.3).

9.     Per subsection (6) for the purposes of determining if this ‘link’ existed, the Court must take into consideration:

a.     Whether prospective customers were informed that Australian law prohibits provision of social casinos;

b.     Whether customers entered into a contract which expressly state the customer should not be in Australia while using the service;

c.     Whether the provider required customers to provide personal details which indicated the customer was not physically present in Australia;

d.     Network data which indicates the customer was in Australia;

e.     Any other relevant matters.

10. Subsection (7) determines that the offence applies whether or not the provision of the service occurred in Australia as established by the Criminal Code Act 1995 .



Item 5: After paragraph 64A(b)

11. Item 5 gives the ACMA the power to issue a formal warning if a person contravenes the civil offence in section 15AB(3).



Item 6: After paragraphs 64C(b) and 64D(b)

12. Item 6 includes the civil offence in section 15AB(3) as a provision which is subject to an infringement notice under part 5 of the Regulatory Powers Act, and makes section 15AB(3) enforceable under part 7 of the Regulatory Powers Act.

 

Item 7: After section 64D

13. Item 7 inserts a new section 64E which deals with injunctions relating to online locations which facilitate the provision of prohibited online gambling services or prohibited social casino services. This will make it more difficult for Australian internet users to find and use websites which offer these services.

14. Subsection (1) specifies that ACMA may apply, on behalf of the Commonwealth, to the Federal Court to grant an injunction that requires a carriage service provider to take steps that the Court considers reasonable to disable access to an online location that contravenes, or facilitates a contravention of:

a.     Section 15 (providing prohibited interactive gambling services to customers in Australia);

b.     Section 15AA (providing unlicensed regulated interactive gambling services to customers in Australia);

c.     Section 15AB (providing social casino services to customers in Australia);

d.     Section 15A (an Australian-based service providing prohibited interactive gambling services to customers in designated countries).

15. Per subsection (2) the application may also request the injunction require an online search engine provider to take reasonable steps to not provide a search result which refers users to the online location of the prohibited service. Online search engines enable users to discover the existence of online locations that may be the subject of an injunction. In some cases, search results can disclose alternate pathways to these online locations, which would undermine the effectiveness of injunctions granted under section 64E(1).

16. Subsection (3) gives the Court power to grant the injunction in terms the Court considers appropriate. Per subsection (4) this may include requiring the carriage service provider or online search engine to take reasonable steps to block domain names, URLS and IP addresses which provide access to the online location. It might also include requiring the carriage service provider or online search engine to block domain names, URLS and IP addresses which have started to provide access to the online location after the injunction is made, subject to conditions.

17. Subsection (5) specifies that the parties to an action under section 64E(1) are ACMA and the carriage service provider, as well as the online search engine provider and person operating the online location in some circumstances. Subsection (6) clarifies that ACMA must notify the carriage service provider, the person operating the online location, and in some cases, the online search engine provider.

18. Subsection (7) sets out what the Court may take into account when determining whether the grant the injunction.

19. Subsection (8) allows the Court to limit, rescind or vary an injunction. Subsection (9) states that parties to the injunction may make an application for the Court to do so.

20. Subsection (11) gives the Minister power to, by legislative instrument, declare that a particular online search engine provider or class of search engine providers may be exempt from an application under subsection (1) or subsection (8). This instrument is subject to the Parliamentary disallowance process. The disallowance process provides Parliamentary oversight and scrutiny over any legislative instrument made by the Minister.

21. Subsection (12) specifies that a carriage service provider or, if applicable, an online search engine provider is not liable for any costs in relation to the proceedings unless the provider enters an appearance and takes part in the proceedings. This will ensure that carriage service providers and online search engine providers will not incur unreasonable costs in preventing the provision of prohibited online gambling services or prohibited social casino services.



Item 8: After section 69A

22. Item 8 inserts a new section 69B which allows the Minister to make regulations about the unenforceability of agreements relating to illegal social casino services.

23. Subsection (1) provides that the regulations may state that an agreement has no effect to the extent to which it provides for payment of money for the supply of an illegal social casino service. In addition, civil proceedings cannot lie against a person to recover money alleged to have been paid in connection with an illegal social casino service.

24. Subsection (2) states that the Minister must take all reasonable steps to ensure that regulations are made which enact subsection (1) within six months of commencement of the section.

25. Subsection (4) clarifies that for the purposes of this section an agreement means both those made orally and in writing.



STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS

 

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

 

Interactive Gambling Amendment (Banning Social Casinos and Other Measures) Bill 2020

 

This bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 .

 

Overview of the bill

 

The purpose of the bill is to restrict provision of prohibited interactive gambling services and prohibited social casino services to Australian customers, and to give ACMA the power to seek injunctions which block websites that carry this content.

 

Human rights implications

 

The bill creates new criminal and civil liability under section 15AB for providing a prohibited social casino service to an Australian customer. This new offence engages but does not limit the presumption of innocence under Article 14(2) of the International Covenant on Civil and Political Rights (ICCPR), the right to be presumed innocent until proved guilty according to law.

 

Proposed subsection 15AB(5) contains an exception to criminal and civil liability where a person did not know, and could not, with reasonable diligence, have ascertained that the service they were providing had an Australian-customer link. The note to this subsection provides that in the case of a criminal case on the basis of 15AB(1), the defendant bears an evidential burden in relation to the matters in subsection (5), i.e. whether the defendant didn’t know, or could not with reasonable diligence have ascertained, that the customer was physically present in Australia. If the defendant discharges this evidential burden by raising evidence that his or her conduct falls within the exception, the prosecution must disprove the matter beyond reasonable doubt. The evidential burden imposed on the defendant is of a low threshold which only requires adducing or pointing to evidence which suggests a reasonable possibility the defendant did not know of the Australian-customer link. Placing the evidential burden on the defendant in this case is appropriate as the matter required to be adduced is a matter peculiarly within the knowledge of the defendant. The bill does not otherwise alter the process that would apply to the investigation or prosecution of the criminal penalty proposed to be inserted by section 15AB. This measure does not otherwise engage the rights in Article 14 of the ICCPR.

 

The bill engages the right to freedom of expression as contained in article 19 of the International Covenant on Civil and Political Rights. Article 19 states that individuals shall have ‘freedom of expression; this right shall include freedom to seek, receive and impart information and ideas of all kinds’. Under article 19(3) the right to freedom of expression may be subject to limitations which, inter alia, may include for the protection of public health. Limitations must be prescribed by law, pursue a legitimate objective, be rationally connected to the achievement of that objective and a proportionate means of doing so.

 

The bill would enable the Federal Court to order internet carriage service providers and online search engine providers to block access to websites which facilitate prohibited online gambling services or prohibited social casino services. The effect of the order would be to prevent users located in Australia from easily accessing specific websites, or from receiving search results from an internet search engine, that provide a pathway to certain online locations that offer or advertise the relevant site. While this would restrict the ability of the prohibited website to ‘impart information’, the power to grant an injunction is subject to a number of safeguards, such as the range of factors listed under section 64D(7).This includes an explicit public interest test, other possible remedies, and the proportionality of the response in the circumstances. The limitation therefore is pursuing a legitimate public health objective, is rationally connected to that objective and expressly allows for a proportionality test.



Conclusion

 

The Bill is compatible with human rights. To the extent that it may limit human rights, those limitations are reasonable, necessary and proportionate.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Andrew Wilkie MP