Understanding Australia's Interactive Gambling Act

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Australia is home to the world’s highest rate of gambling among its adult population, as over 80% of Aussie adults engage in gambling of some kind according to the BBC. Gambling is so ingrained in the fabric of Australian life that 4% of the population plays slot machines (which they call poker machines or pokies) at LEAST once a week. With that in mind, legislators have taken steps to regulate gambling in the country, including in the digital space.

Passed nearly 15 years ago, Australia’s Interactive Gambling Act of 2001 (IGA) was passed with an eye towards curbing perceived negative effects of online gambling in the country.

A Two-Fold Approach

To achieve that goal, the act took a two-fold approach, aimed squarely (and solely) at the operators themselves. First, it makes it illegal for operators to offer “real-money” interactive online gambling to Australian residents, and also makes it illegal for gaming operators to advertise such services to citizens. However, it is NOT illegal for residents to access and use online gambling services, and it does allow Australia-based companies to offer gambling services to players outside the country as long as it isn’t in a “designated country,” which is a country that has requested to be named as such and has corresponding legislation within their country.

The onus is on the operators to avoid running afoul of the act, and failure to do so can result in a maximum fine of $220,000 per day for individual employees or $1.1 million per day for the company as a whole. The IGA specifies that operators will be clear of wrongdoing even if Australian citizens sign up and play, so long as the operator was unaware, with due diligence, that they were offering their games to Aussie residents.

Defining "Reasonable Diligence"

To avoid shenanigans with the above section, the act also defines “reasonable diligence” thusly:

As long as operators meet those conditions, they should not be charged with an offence even if Australians register and play on their site.

Exceptions to the Law

There are exceptions to the law that allows for very specific types of online gambling taking place in the land down under. The primary example is sports betting, which is allowed through licensed operators as long as the betting takes place PRIOR to the start of the event in question. This is because the law specifies that online gambling is illegal only if it is interactive, so pre-event betting is allowed but in-play betting is not. This also allows for online lotteries to be legal as long as they are not of the instant-win scratch card variety.

Advertising Clause

The advertising ban applies across all forms of media, not just digital ones. So an online casino is not allowed to advertise their real-money interactive gaming options even in print. Any Australian citizen that feels the Interactive Gambling Act is being broken can submit a formal complaint to the Australian Broadcasting Authority.

Evaluating IGA

Despite the existence of the Interactive Gambling Act, the official 2010 Productivity Report of the Australian Government found that the amount spent on online gaming in the country was in excess of $800 million at the time. A 2012 government review of the act, conducted over a decade after its inception, found that the IGA is both ineffectual and potentially harmful to Australian players, as it has caused a high level of Australian gamblers to use prohibited services for their online gambling needs, including many with subpar protections for players.

That same report listed around 2200 online gaming providers offering service to Aussie players, in direct contravention of the Interactive Gambling Act, and updated the amount being spent on those services to be close to $1 billion. The 2012 review also lists a number of suggestions to increase the effectiveness of the IGA to achieve its goal of protecting Australian citizens by allowing gaming providers to operate in the country if they cease offering high-risk games such as slots and only offer games such as poker, and also agree to a strong set of consumer protection measures. As of now, however, there hasn’t been any movement on these recommendations.

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