Transcripts

Press Conference - Melbourne

28-April-2016

Topics: Government response to Illegal Offshore Wagering review

E&OE…

MINISTER TUDGE:

Today we are releasing the Barry O’Farrell Inquiry into Illegal Offshore Gambling and the Government’s response to it.

As you know, this Inquiry was established by Scott Morrison when he was then Social Services Minister last September. It was to look overall at the online gambling market but to particularly look at ways that we can reduce the amount of money which is being spent on the illegal offshore gambling companies.

The Government has accepted 18 of the 19 recommendations in full or in principle and we have noted the 19th.

The expansion of the online gambling environment is a relatively new phenomenon. Ten years ago, the iPhone didn’t exist. Today, Australians spend $1.4 billion on online wagering and that is growing by 15 per cent per year.

Most people use their phone to gamble because they like the convenience of it; they do so responsibly and they enjoy a punt.

But we also know from the O’Farrell Inquiry that the rate of problem gambling in the online environment is three times higher than it is elsewhere.

This problem is exacerbated by the amount of money which is being spent on illegal offshore gambling sites. Clearly if bets are being made on illegal offshore gambling sites, people do not have the same legal protections or consumer protections.

Furthermore it means that money is being spent offshore and not on Australian companies. There are also issues in relation to sports integrity.

Barry O’Farrell suggests that between $65 million and $400 million each year is spent on these illegal offshore gambling sites.

At the moment, our regulations to address these consumer protections and to address the issues associated with illegal offshore gambling are weak and they are inconsistent across the nation.

There is something like sixty pieces of legislation which govern this space from nine different jurisdictions.

Today, based on the review’s recommendations, we are announcing that the Government will create a safer gambling environment for individuals and we will be cracking down on illegal offshore gambling providers.

We are doing this in three ways.

First, we are going to create a national consumer protection framework. That includes things like a national self-exclusion register; it includes a voluntary pre-commitment scheme; it includes the provision of regular information to go to gamblers so they know how much money is being spent; and it includes a prohibition on gambling companies offering lines of credit to individual Australians.

This will be the largest package ever introduced into Australia by an Australian Government to combat problem gambling.

The second and third measures are designed to limit the amount of money going to the illegal offshore gambling sites. We are going to strengthen the law and we are going to empower the regulator to ensure and make very clear that it is illegal for unlicensed overseas providers to accept bets from Australian residents.  

For companies who continue to flout the law, that are unlicensed and overseas, we will then be introducing some further disruptive measures targeted at them.

That will include placing directors of recalcitrant companies on our movement alert list to disrupt their travel should they try to enter Australia.

It will include creating a new offence for affiliates, for agents, for principals, who are facilitating bets on the illegal offshore gambling sites and we will also be examining the practicality of ISP and payment blocking.

Together –  this strengthening of the law, the empowering of the regulator, and these additional disruptive mechanisms – we  think will make a very significant impact on the amount of money which is going offshore to illegal offshore providers.

That has certainly been the experience in other nations who have done very similar measures and we expect it to be the experience here in Australia.

Let me make a comment in relation to the question on in-play online betting. The Government notes the review’s finding that the introduction of a strong national framework is required before considering any expansion of online gambling.

But I want to be very clear in terms of what our position is. The Government does not intend to further expand the online betting market by legalising online in-play betting. We think that there are enough problems in gambling already without creating the ability for someone to bet on every moment of every game in every sport across Australia, all from your living room.

And so, consequently, our position on that is clear, that we do not intend to further expand the online betting market by legalising online in-play betting.

Australians love to gamble and most people do so very responsibly, but we also believe that Australians expect there to be a strong, robust regulatory framework governing online environments and that’s exactly what we intend to introduce.

Happy to take any questions on this.

JOURNALIST:

There is a couple on in-play, Minister. So, there was some talk of forming a philosophical view of that after the election, but we can assume from this now that that is the Government’s final word and that’s the direction you are heading? And before that legislation goes through and you close that loophole, what do you expect those operators to do, will they continue to operate the click-to-call systems or will you call on them not to operate those?

MINISTER TUDGE:

Our position is very clear, it is in black and white in the statement which we are putting out today that we don’t intend to further expand the product offerings to the in-play environment.  Further to that though, we are going to close that loophole which presently some gambling providers are exploiting. And we think that they are certainly going against the intent of what the IGA says today, if not the actual law.

JOURNALIST:

Is there any way to fine those bookies that have been doing that? There are fine provisions in play.

MINISTER TUDGE:

Yeah, most of the offences in the Interactive Gambling Act are criminal offences. So, ACMA , for example, has notified the Federal Police in relation to this and then it is up to the Federal Police if they choose to prosecute.

Now, what we’re proposing in this package is for new civil offences to be introduced as well in order to enforce the Interactive Gambling Act going forward.  Obviously there are lower thresholds, a lower burden of proof for civil penalties compared to criminal penalties.

JOURNALIST:

Would you as Minister like to see the AFP come down hard on these businesses that have been flouting the law?

MINISTER TUDGE:

I’m very hesitant to comment on what the AFP should do. They are independent and they’ll make up their own mind. We are certainly of the view that they have been in breach of the intent of the law, if not the actual law.

JOURNALIST:

Can you explain the loopholes that you believe that certain organisations have been exploiting?

MINISTER TUDGE:

This is in relation to the click-to-play which is currently occurring. At present, it is illegal to offer online in-play betting and we believe that they are exploiting a loophole in the legislation and we are going to introduce legislation to close that loophole as quickly as possible.

JOURNALIST:

Minister, can you explain to us please, given that the double dissolution election has been put firmly on the agenda by your Prime Minister, how is it that you are going to get these legislative changes through the Parliament?

MINISTER TUDGE:

We will be introducing legislation as quickly as practicably possible.  Bearing in mind that we are likely to be dissolving the Parliament soon and having an election, but our commitment is to do so as quickly as possible, given those constraints.

JOURNALIST:

But you’ve got ten days now, you’ve got until the 11th of May at the outer limit, are you going to do it between now and the election?

MINISTER TUDGE:

Our commitment is to do so as quickly as possible.

JOURNALIST:

Has that legislation been drafted?

MINISTER TUDGE:

Our commitment is to introduce this legislation as quickly as possible to close this loophole.

JOURNALIST:

Is this a missed opportunity to look at gambling advertising? There is a lot of community anger about the amount of, say, gambling advertising during footy telecasts. Why haven’t you done anything to look at this?

MINISTER TUDGE:

It is a good question. This was not formally part of the terms of reference for the O’Farrell Inquiry.

The O’Farrell Inquiry was looking at that question of illegal offshore gambling and how we can prevent that from occurring and we think we have some very robust measures to stop that as well as a strong consumer protection framework in place.

I hear quite frequently from parents who are concerned about the amount of advertising which occurs. There is federal, there’s state and local regulations which are already in place presently.

What Barry O’Farrell recommended, which you can see in Recommendation 11 and 12, is that he believes there needs to be greater national consistency in relation to the advertising question and to consult with stakeholders in order to implement such consistency. That is precisely what we are proposing to do.

JOURNALIST:

What’s your view going to an election, will you take a policy to the Australian people about gambling advertising?

MINISTER TUDGE:

I’ve just outlined what our position is in response to this gambling review, it’s there in black and white there for you Richard.

JOURNALIST:

But going forward, what are you going to take to the election, are you going to crack down on gambling advertising?

MINISTER TUDGE:

Richard I’m not going to be foreshadowing any election commitments right now.

JOURNALIST:

Minister what do you think the sporting codes will say about this given that they stood to benefit if there was allowed to be more in-play online betting?

MINISTER TUDGE:

Well different sporting codes have different views in relation to the in-play question as you’d be aware. Some were strongly pushing for it and others were against it.

My overall view from a financial perspective is that when bets are made on the licensed Australian providers, those sporting codes tend to get a small clip of that bet, so they are financially rewarded for it. Clearly if a bet is made on an unlicensed illegal provider offshore, they do not get any financial benefit from it.

Our package here is squarely aimed at addressing the amount of money which is going on those illegal offshore providers, and we expect this package will bring back a lot of that money onto the licensed providers. Consequently the sporting codes which are connected to those gambling companies will be financial beneficiaries.

JOURNALIST:

What about other jurisdictions like Norfolk Island and the Northern Territory, not your portfolio, but your Government moved against Norfolk Island and prevented them issuing fresh licences, would you do the same thing in the Northern Territory?

MINISTER TUDGE:

Well this comes up in terms of the national framework which we’re proposing. At the moment, as you’d be aware, this is largely governed by the states and territories in relation to the licensing and many of the consumer protection regimes. What we’re proposing here is that this national framework would be implemented via consultation with the states and territories and we’ll discuss with them about the most appropriate means for implementing this.

Now we’ll put on the table for example that we could consider implementing it via the mechanism which was used to develop the national match fixing code for sports, which was a largely cooperative effort, but we’ll also place on the table to discuss with the states and territories, the possibility and desirability of introducing national legislation.

JOURNALIST:

Have you started talking with the banks about the disruption and blocking customers from sending money overseas?

MINISTER TUDGE:

I’ve had some discussions with the banks in relation to this. You’ll see that both the recommendation and the response is to have further engagement with banks to assess the practicalities as to how this could be done and whether it would be effective.

Now, this is done in many jurisdictions abroad, and from what I’ve seen it’s been quite effective, but we want to have that discussion to see whether or not it can work here in Australia and what the impact and cost would be.

JOURNALIST:

(inaudible) What were the banks’ response to that?

MINISTER TUDGE:

They’re always constructive conversations that I have with the banks.

JOURNALIST:

Are uniform tax rates across the states and territories on the agenda at all, as part of the national framework?

MINISTER TUDGE:

This isn’t part of our response here. Our response is quite clear in terms of what we’re proposing to discuss with the states and territories.

JOURNALIST:

Was there any thought of making it illegal for the consumers to actually bet overseas?

MINISTER TUDGE:

No.

JOURNALIST:

Just going back to your response about legislation, and that you might go the legislative route in terms of regulating the national framework, would that mean you could then strip jurisdictions of the right to issue licences, if you push it to the maximum extent?

MINISTER TUDGE:

What we’re proposing here is around the national consumer protection framework that clearly they’re the ones that have most of the jurisdiction in that space presently. Now, we want to discuss with the states and territories the best way about implementing that framework. That best way may be similar to what we did with the national match fixing code, which was largely a cooperative effort with the states harmonising their laws.  But we’ll also place on the table with them, to discuss the appropriateness and the desirability of having a national approach to it.

JOURNALIST:

You’ve said you’re going to make it illegal for organisations to accept bets from Australians.  Considering you’ve already identified this activity is illegal, how exactly do you enforce?  What is the difference?

MINISTER TUDGE:

So this will be clarifying the Interactive Gambling Act and we’ve received feedback from throughout the Barry O’Farrell inquiry that the law was ambiguous as to whether or not it was illegal for an overseas provider to accept a bet from an Australian resident.

We’re proposing here that we’d make that very, very clear and we’d empower the regulator, which is the ACMA, to issue notices to those companies to inform them about what the Australian law is. 

Other countries already do this and companies which are in responsible jurisdictions will take heed of what the Australian law is and consequently block any bets coming from Australian residents.  In the same way for example in that a Sportsbet of the world today will block a bet which is coming from a French resident, because France has such laws in place.

JOURNALIST:

Talking about market of half a billion or $600 million, how much of that gambling activity would you envisage be stopped by these companies?

MINISTER TUDGE:

The combination of measures which we’re proposing we hope will have a demonstrable impact.

Even today it’s difficult to get an assessment of how much money is being spent offshore.  Barry O’Farrell says that on the low end of the spectrum it’s in the vicinity of $65 million per annum and declining, at the high end of the spectrum it’s $400 million and increasing.  There’s no good evidence to date.

Now one of the recommendations which I haven’t mentioned is the need for further research to be done into this question and more generally into the online gambling environment.  We’ll certainly be taking them up on that.

The experience in some other jurisdictions is that when they’ve introduced a suite of measures to crack down on illegal offshore gambling providers, it has had a very significant impact.  France for example went from having 75 per cent of the dollars which were spent on illegal offshore providers to 20 per cent of the dollars being spent on illegal offshore providers.

JOURNALIST:

You must have an idea though immediately with the introduction of these measures to what extent organisations will toe the line.  To what extent the percentage of organisations thumb their noses at it?

MINISTER TUDGE:

Our expectation is that organisations in responsible jurisdictions will adhere to the Australian law once they’re alerted to it and once our law is clarified.

JOURNALIST:

And what percentage will (inaudible)…

MINISTER TUDGE:

In addition, this is why we’ve got two parts to this.  One is clarifying the law and empowering ACMA, the other is introducing these other disruptive mechanisms for those companies which are recalcitrant.  All of those other additional measures are squarely aimed at them if they’re not obeying the Australian law.

JOURNALIST:

What percentage of the market is recalcitrant?

MINISTER TUDGE:

At the moment we haven’t got a good read on how much money is being spent offshore presently.  As I said, Barry O’Farrell looked into this question and he said it’s between $65 million and $400 million, now $65 million is only five per cent of all of the online wagering dollars which is spent by Australians and that would be at the low end of the scale compared to almost every other country.  $400 million is around 20 to 25 per cent of the gambling dollars which are spent on illegal offshore providers.

I suppose overall our expectation is that this will have a significant impact on reducing the amount of money which is being spent on those illegal offshore providers.

JOURNALIST:

Do you expect the companies that are offering click-to-call like William Hill and the others, would you expect them to cease doing that today or is fine to wait for the legislation to pass?

MINISTER TUDGE:

I would hope that they would cease doing this today because we have clearly indicated that we believe they are operating against certainly the intent of the law, if not the actual law.  But we will be introducing into the Parliament as quickly as possible a clarification to the Act to ensure that the loophole is closed.

JOURNALIST:

Will you call them and ask them specifically to stop doing this?

MINISTER TUDGE:

Richard, I think that they’ll very clearly see what the statement says today.  I have regular conversations with them and they know my views.

JOURNALIST:

And racing will be off?  You know how there’s a separate carve out for racing for in-play bets, that will be taken out as well?

MINISTER TUDGE:

What we are doing today, we are not expanding the current betting market offerings we are leaving it presently as it is, but we are closing that loophole.

JOURNALIST:

So you can still ring up on the phone and do it? (inaudible)

MINISTER TUDGE:

We’re closing the loophole and we’re making the decision that we have no intent to expand the gambling offerings.

(ENDS)

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