Recently in Australia, the reform of the regulatory environment concerning online gambling has been started. The proposed amendments to the basic federal law on gambling (Interactive Gambling Act – IGA) are at the final stage of consideration by the Australian parliament and are likely to be adopted at the next parliamentary session.
The purpose of the bill on amending the IGA (hereinafter – the Bill) is the combat with illegal offshore gambling and provision of additional enforcement powers to the federal regulator – the Australian Communications and Media Authority (ACMA).
1. Requirement for licensing in Australia
The draft law defines the concepts “regulated interactive gambling services” and “prohibited interactive gambling services”. The main difference between these two categories of services is that it is not allowed to provide prohibited interactive gambling services to the individuals in Australia, while regulated online gambling services may be provided, but only by the operators licensed by the Australian regulator and authorized to provide data services in accordance with the terms of their license.
Previously, the certain services classified according to the Bill were excluded from the category of banned (except for “in-game” and instant online lotteries). Now these “exceptions” are attributed to the regulated interactive gaming services that are provided by a licensed operator in Australia.
The bill amends also the Section 15 of the IGA, which provides for criminal and civil liability (fines) for providing the prohibited online gambling service by the operator to the customers in Australia. Therefore, only the operators providing the regulated services in accordance with the license do not bear such a responsibility. At the same time, the fines are very serious: the penalty for legal entities is 4.5 million USD for a criminal offense and 6,75 million USD for a civil offense (for each day of violation).
It should also be noted that the license for regulated services will extend to the services for the Australians outside Australia.
2. Tools of constraints ACMA
The bill grants the ACMA more powers to enforce the compliance with the IGA. These powers include:
a more severe regime of civil fines (the ACMA will have a number of enforcement tools at its disposal, including the right to issue official warnings and notices of violations, to impose civil sanctions and seek injunctions);
creating the process that allows you to file complaints in the ACMA about the provision and promotion of any unlicensed or prohibited online interactive gambling services, as well as the procedure that allows the ACMA to investigate these complaints.
In addition, the Bill requires the ACMA to create a register of legitimate or “admitted” interactive gambling services. This register will be available to the public on the ACMA website. Accordingly, the register will not include those online game operators who cannot obtain an Australian license to provide services to the Australian customers.
In accordance with the Bill, the ACMA will be able to disclose the information regarding prohibited or regulated interactive gambling services:
the Department of Immigration and Border Protection which may file the names of the officials of organizations that violate the IGA in the “list of travel warnings” in order to restrict their movement to or from Australia;
foreign regulators which licensed the operator violating the IGA by providing the interactive gaming services to the individuals located in Australia in order to increase global awareness of the IGA and encourage foreign regulatory bodies to assist law enforcement agencies.
3. Prohibition on credits for players
The government also proposed an amendment to ban the provision of lending rates to the Australian consumers, but with some exceptions.
The gambling service providers are exempt from the ban on lending with the annual turnover of rates at least 30 million Australian dollars. If the supplier belongs to a corporate group, the annual worldwide turnover in online rates of the entire corporate group (including holding and subsidiaries) is taken into account. This means that most part of Australian providers of gambling services will not be subject to exemption and they will be prohibited from lending to the customers.
Any company that violates this prohibition will be considered to have committed a crime, for which a fine of $ 90,000 or a civil penalty of $ 135,000 is foreseen.
On February 8, 2017, the bill was adopted by the House of Representatives and submitted to the Senate. In the near future, the Senate may adopt, reject or amend the Bill. However, it is unlikely that this version of the bill will be the subject of considerable debate or further changes in the Senate, since it was adopted by the Chamber without any opposition and with the support of the two leading parties.
If the bill is passed by both chambers of the Parliament, most of the IGA amendments will enter into force 28 days later, and the ban on lending to the Australian consumers will be in six months after the Royal approval of the adopted changes. The companies will have 6 months at their disposal to ensure the termination of the proposals on credit rates for the consumers.
While the discussion on the way to regulate online gambling in Australia is in process, the gambling companies are working in uncertainty. The gambling operators licensed by offshore countries should rethink their business strategy. Basically, such licenses have an unlimited scope, however, after the approval of this Bill, the access to the Australian players without obtaining a local license will be blocked. We remind you that similar rules are already in force in the UK.