Speech - Financial Counselling Australia Conference - Adelaide
**Check against delivery**
• His Excellency the Honourable Hieu Van Le, Governor of South Australia
• Carmel Franklin, Chair Financial Counselling Australia
• Fiona Guthrie, CEO of Financial Counselling Australia
• Delia Rickard, Deputy Chair of the ACCC
• Peter Kell, Deputy Chair of ASIC
• Commonwealth Ombudsman, Colin Neave
• State and Territory Financial Counselling association presidents
• Financial counsellors from all over Australia
It is a pleasure to deliver the official opening address of the Financial Counselling Australia Conference.
It looks like you have a great programme over the coming two days of keynote speakers and exhibitors to showcase the work you do and share ideas about how you can continue to support your clients who come to you with financial problems.
You are on the front line in supporting vulnerable people and people who come to you at their lowest ebb.
Financial difficulties are one of the great levellers in our society, because anyone from any walk of life can find themselves in need of your support and assistance.
Some of your work is proactive in giving people the guidance they need to avoid financial pitfalls. But much of it is also in helping people after they find themselves in trouble.
As a Member of Parliament, I also meet people at the sharp end of financial trouble, so I understand how raw and tangible your work can be. It’s not hypothetical – rather it’s dealing with real people and real impacts on everyday lives.
Your counsellors provide free, confidential and independent information, advocacy and support to help people facing immediate issues in relation to their finances and help people manage their issues in the medium to longer term.
The Turnbull Government is committed to the work you do, that’s why we have funded Financial Counselling Australia $1 million over two years to help you manage your 1800 helpline, develop and maintain your online information for counsellors, capability workers and consumers, as well as supporting this conference.
Today I want to talk to you about an issue that is important to you and the work you perform – gambling – its prevalence, its growth and its problems.
Many of you or your teams specialise in gambling counselling and too often you see tragic cases where people lose it all due to gambling addiction.
Online wagering reforms
In the last couple of weeks, the Turnbull Government has announced a significant package to combat problem gambling in Australia.
Our package of changes concern the online gambling environment, where in my view, the problems of the future will arise.
Before going in to some of the issues, let me give you some context.
In 2006, the iPhone didn’t exist. Today smart phones are in everyone’s hand and give instant access to a global online environment.
Everyone knows the changes that this and the broader digital revolution has already brought. It is happening in almost every industry - think books, media, retail, higher education, financial services, you name it - and this is just the beginning. The pace of change is just getting faster.
The gambling industry is no different. Digital technologies are disrupting the traditional gambling industry and massively expanding the reach into every living room, every minute of every day.
Today, Australians spend $1.4 billion on online wagering and that is growing by 15 percent per annum - by far the fastest growing gambling segment.
I cannot see this trend towards online gambling stopping, just as I cannot see the trend in other industries stopping. The convenience and ease of use that the online environment provides is too great.
As you know, the Prime Minister is constantly discussing these broad economic trends and how we can both manage them and seize the opportunities they present. In many industries, there are challenges, but also enormous opportunities.
In the gambling industry, however, our challenge is different. It is how we manage the growth and create a regulatory framework that is up-to-date and that protects consumers and our sports, and as much as possible, keeps money in Australia.
The O'Farrell Review into Illegal Offshore Wagering was set up to look at these issues. The primary task was to examine ways to protect Australians from illegal offshore operators, but the Review also made broader recommendations.
Offshore providers of course provide another dimension to the digital revolution. In the physical environment, you cannot gamble overseas, unless you leave our shores; in the digital environment, the providers come to your living room, whether they be based in Adelaide or Gibraltar.
Barry O'Farrell’s Review suggested that between $64 and $400 million each year was gambled on illegal offshore providers, some of whom have links to crime syndicates.
This presents a whole set of problems as well. If you gamble on these illegal offshore providers, you don't have the legal and consumer protections as you do on Australian licensed sites. Sports corruption is also a greater risk, because we have no visibility over the bets made offshore; and of course, money leaves Australia.
Mr O'Farrell made 19 recommendations to deal with this, and we adopted 18 and noted the final one.
Our reforms, based on his recommendations, fell into three categories:
First, changing the law to make it clear that it is illegal for unlicensed overseas gambling companies to offer gambling products to Australians. The regulator would also be empowered to have stronger enforcement mechanisms.
Second, introducing other disruption measures to curb illegal offshore gambling activities. This includes creating new civil penalties for agents and affiliates who facilitate gambling on illegal sites; placing directors of recalcitrant companies onto the movement alert list to disrupt their travel; and exploring ISP and payment blocking.
These two sets of measures were aimed at stopping money going offshore. While they won’t solve every issue, they will make a significant impact based on overseas experience.
The third category of reforms, however, is the most important to the work that you do, and is arguably the most important to Australians as a whole: the development of a set of powerful national consumer protections.
Whether a person buys their shoes online or at a shop has no impact on their well-being. But the same cannot be said of the gambling environment.
The research shows that in the online world, the proportion of problem gamblers is three times as high as other forms of gambling. Some research cited in the O'Farrell Review found that up to 41 percent of online gamblers are at risk of becoming problem gamblers.
In the physical places, there are at least some people around who can point out and assist if you are getting into trouble. But in the online world, you can literally gamble your house away without leaving home.
Online wagering companies have the ability to target individual gamblers with offers and inducements to bet. They can offer lines of credit to help you continue to gamble when you have run out of money. They know when you have not bet for a while and can entice you back.
You deal with many of them.
I actually became first involved in gambling policy when I was a first term opposition backbencher because of a constituent of mine who got into serious trouble with online gambling.
I suspect my constituent is the person profiled in your report from last year: Duds, Mugs and the A-List: the Impact of Uncontrolled Sports betting.
He was an unemployed man living with his widowed mother in a modest house in my electorate. But was a gambler.
He had blown the little money he had, but was given a line of credit to continue by Sportsbet. Initially it was $5,000, then $10,000, then $20,000, then $40,000, and then $80,000. He lost it all over the course of the weekend. He couldn't pay it back, so Sportsbet took him to court to bankrupt him, and then they were going back to court to seize his and his widowed mother's house.
That's when he came to see me.
I committed at the time that I would (a) try to save his home and (b) to ban the gambling companies offering lines of credit.
We succeeded in the first, and it has taken me a few years to achieve the second, but banning lines of credit is a key plank of our national consumer protection framework that we announced a couple of weeks ago.
There is simply too much of a conflict of interest for a gambling company to be both a betting provider and bank offering credit. We are going further than what Mr O'Farrell recommended and we will work with the states and territories to prohibit it altogether.
Our national consumer protections consist of several other elements.
In addition to prohibiting lines of credit, we will establish a national self-exclusion register. Many gambling providers allow self-exclusion, but they are not joined up with each other. The problems arise because most people have more than one gambling app on their phone. They may exclude themselves from one app in order to cool down, but then jump onto another. Our aim is to have a self-exclusion register which links all the providers: self-exclude on one, and you self-exclude on all.
We will also insist that voluntary pre-commitments be offered to people on a regular basis. Again, this is aimed at setting limits to help people control their gambling.
We will require activity statements of an individual's gambling spend to be sent regularly to the customer. It is well known that many people continue to gamble because they don't know how much they have lost, and then get themselves into trouble. This is designed to keep them (or perhaps their family member) informed in a very transparent way precisely how much they have been losing.
We are also going to ensure that there is greater national consistency in the offering of inducements and we will do this through a clear responsible-gambling lens.
Standard messaging, better research, and better trained staff are also part of it.
Together, these changes represent the biggest package of responsible gambling reforms that a federal government has ever introduced.
Thank you for the detailed submissions that you have made and in particular, the ongoing engagement of Lauren Levin, the FCA’s Director of Policy.
We have already started working with the states and territories, industry and other stakeholders, to implement these measures. We will be seeking your ongoing advice as we do so.
Let me quickly address the issue of in-play betting. This is betting which occurs after the game has started and can occur on all manner of events, such as who will win the next quarter of footy, or who might kick the next goal. Conceivably, it can include micro-bets such as whether someone will serve a double-fault on the next point.
We presently prohibit online in-play betting but there was quite a push from the gambling providers and, indeed, some of the sports codes, to allow licensed Australian providers to offer these bets. Part of their rationale was that it will keep more bets in Australia if the Australian providers can offer them.
We have made our position very clear: we do not intend to further expand the online betting market in Australia by legalising online in-play betting. We think there are enough gambling problems and sports integrity problems already without being able to gamble on every moment of every game of every sport.
Thank you again for the opportunity to address your conference.
We look forward to continuing to engage Financial Counselling Australia, the states, the wagering sector, researchers and the community to progress these measures.
We appreciate the work you have done to date and thank you for your engagement in the O’Farrell Review process.
As you can see from our response Financial Counselling Australia have had a strong influence in informing the Government’s actions.
All the best for the rest of the conference.