Commonwealth of Australia Explanatory Memoranda Commonwealth of Australia Explanatory Memoranda[Index] [Search] [Download] [Bill] [Help]
2016-2017-2018
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
INTERACTIVE GAMBLING AMENDMENT (LOTTERY BETTING) BILL 2018
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Communications
Senator the Honourable Mitch Fifield)
INTERACTIVE GAMBLING AMENDMENT (LOTTERY BETTING) BILL 2018
OUTLINE
The Interactive Gambling Amendment (Lottery Betting) Bill 2018 (the Bill) will amend the
Interactive Gambling Act 2001 (the IGA) to prohibit betting on the outcome, or a
contingency that may or may not happen in the course of the conduct, of a lottery (including a
keno draw).
Lottery betting services (also referred to as 'synthetic lotteries') allow customers to bet on the
outcome of a lottery draw without the need to purchase a ticket in the official lottery draw.
These services will match prizes for each tier including the jackpot that the official lottery
operator would have paid to a customer if they had won with an official lottery ticket through
that service. Unlike official lottery draws, ticket sales will not cover major payouts; instead
these are covered by insurance policies.
The Government is concerned that the provision of lottery and keno betting services in
Australia, and the potential expansion of these services in the near future, will cause adverse
impacts on States and Territories, small business and the community.
Every State and Territory in Australia receives taxation revenue from the sale of tickets in
official lottery draws. Over $1 billion in tax revenue is currently received by States and
Territories each year from the sale of official lottery tickets. This revenue contributes to
charitable causes and other services that benefit the community such as health and education
services. State governments have voiced their concerns that lottery and keno betting services
are siphoning tax revenue collections which will impact community services.
Newsagencies and other small businesses across Australia rely on the commissions from the
sales of official lottery tickets. Over $350 million is earnt by some 4000 newsagencies and
official lottery agents across Australia. These businesses rely on this commission to earn an
income and cover the costs of running a business. Lottery betting services entice customers
away from these businesses with the promise of substantially higher jackpot amounts
compared to those prizes that can be offered under the official lottery draw. In 2017,
newsagencies and official lottery agents staged a public campaign raising awareness of the
negative financial impacts of lottery betting services.
Lottery betting services also run contrary to the intent of the IGA which aims to limit the
provision of interactive gambling services.
Lottery draws are permitted under the IGA as there is a small number of draws conducted
each week with a considerable break between each draw. On the contrary, lottery betting
services allow consumers to bet on the outcome of up to 25 lottery draws being conducted
around the world on a weekly basis, with the promise of massive jackpots up to hundreds of
millions of dollars, which could lead to problem and at-risk gambling.
The amendments in this Bill will:
prohibit gambling service providers from providing to customers physically present in
Australia a service for the placing, making, receiving or acceptance of bets on the
outcome, or a contingency that may or may not happen in the course of the conduct, of
Australian and overseas lottery draws;
clarify that a keno-type lottery is considered an example of a lottery and therefore
included in the prohibition on lottery betting services; and
2
delay commencement of the prohibition for six months following Royal Assent of the Bill
to allow gambling operators and consumers to adjust their business and betting practices
respectively.
FINANCIAL IMPACT STATEMENT
The Bill is not expected to have any significant impact on Commonwealth expenditure or
revenue.
3
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Overview of the Bill
The Interactive Gambling Amendment (Lottery Betting) Bill 2018 (the Bill) will amend the
Interactive Gambling Act 2001 (the IGA) to prohibit betting on the outcome, or a
contingency that may or may not happen in the course of the conduct, of a lottery (including a
keno draw). This is intended to:
address concerns regarding the impacts of lottery betting and keno betting services on
state taxation revenues and small businesses in Australia; and
promote the intent of the IGA, which aims to minimise problem gambling by limiting
access to rapid-style interactive gambling services by Australians.
The IGA prohibits the provision of a prohibited interactive gambling service to customers
who are physically present in Australia.
Paragraph 5(3)(aa) of the IGA provides that an excluded wagering service is not a prohibited
interactive gambling service, with the effect that provision of such a service may be permitted
under the IGA (as long as the service is provided in accordance with a State or Territory
licence: see section 15AA).
Subsection 8A(5) of the IGA provides that a service is an excluded wagering service to the
extent that it: relates to betting on an event, a series of events or a contingency, other than an
event, series of events or a contingency covered by subsections 8A(1) or (3); is not an in-play
betting service; and, is not a service of the type covered by subparagraphs 8A(5)(c)(i)-(v), so
long as the conditions (if any) determined by the Minister under subsection (6) have been
satisfied. Subparagraph 8A(5)(c)(iii) currently has the effect that a service relating to betting
on the outcome of a scratch lottery or other instant lottery is not an excluded wagering
service.
Subsection 8AA(1) of the IGA also provides that a service is a telephone betting service for
the purposes of the Act where: the service is provided on the basis that dealings with
customers are wholly by way of voice calls made using a carriage service; and, the conditions
(if any) determined by the Minister under subsection (2) have been satisfied.
The Bill repeals subparagraph 8A(5)(c)(iii) of the IGA and substitutes two new
subparagraphs ((5)(c)(iii) and (5)(c)(iiia)) referring to: a service relating to betting on the
outcome of a lottery service; and, a service relating to betting on a contingency that may or
may not happen in the course of the conduct of a lottery. It also inserts new paragraphs
8AA(1)(aa) and (1)(ab), which would provide that a service is only a telephone betting
service to the event that it is not: a service for betting on the outcome of a lottery; and, the
service does not relate to betting on a contingency that may or may not happen in the course
of the conduct of a lottery.
A 'contingency that may or may not happen in the course of the conduct of a lottery' would
include, for example, the drawing of a particular number at a particular position, the first
three numbers drawn, or the drawing of a particular 'bonus' number.
4
The Bill also inserts a note to the definition of 'lottery' in section 4 of the IGA that would
provide that an example of a lottery is a keno-type lottery. Keno is already considered to be a
type of lottery for the purposes of the IGA, but this puts beyond doubt that the prohibition on
the provision of lottery betting services extends to the provision of a service for betting on the
outcome of keno.
The effect of the Bill is that to the extent that a service relates on betting on the outcome of
any lottery, or a contingency that may or may not happen in the course of the conduct of a
lottery, these services will be prohibited interactive gambling services under the IGA.
The Bill contains constitutional saving and transitional provisions to ensure that it will not
operate to effect an acquisition of property other than on just terms, and will not prevent
persons from recovering debts deferred or incurred prior to the commencement of the Bill.
The commencement of the Bill is delayed by six months from the day of Royal Assent to
allow sufficient time for industry to adjust its business practices.
Human rights implications
The Bill does not engage any of the applicable rights or freedoms.
Conclusion
The Bill is compatible with human rights as it does not raise any human rights issues.
5
REGULATION IMPACT STATEMENT
This Regulation Impact Statement (RIS) assesses the Government's proposed policy to
prohibit lottery betting services in Australia in response to industry, governments and
community concerns regarding the offering of these services in Australia. The RIS defines
why lottery betting is a problem in Australia, why government intervention is required, and
assesses the merits of three options to determine the preferred course of action:
Option 1: Maintain status quo - (no regulatory action).
Option 2: Prohibit betting on the outcome of lottery draws (complete ban - major
regulatory action).
Option 3: Prohibit betting on the outcome of Australia-based lottery draws only (partial
ban - minor regulatory action).
Background
The provision and advertising of interactive gambling services to persons in Australia is
regulated under the Interactive Gambling Act 2001 (Cth) (the IGA).
Interactive Gambling Act 2001
The IGA aims to minimise the scope for problem gambling among Australians by limiting
the provision of gambling services to Australians through interactive technologies such as the
internet. The main offence provision applies to the provision of prohibited interactive
gambling services or unlicensed regulated gambling services to persons in Australia.
Prohibited services under the IGA include online casino-style gaming services of chance or
mixed skill and chance, such as blackjack, roulette and poker, which are played for money or
anything else of value. Wagering and lotteries are permitted but an operator must hold an
appropriate licence with an Australian state or territory.
Contraventions can carry a maximum civil penalty of $1.5 million (7500 penalty units) per
day for individuals and $7.8 million per day for corporations. Criminal penalties may involve
a custodial punishment and can carry a maximum fine of $1.1 million (5000 penalty units)
per day for individuals and $5.2 million per day for corporations. These penalties apply to all
interactive gambling service providers, whether based in Australia or offshore, or whether
Australian or foreign owned.
The IGA also prohibits the broadcasting or publishing of prohibited and unlicensed regulated
interactive gambling service advertisements in Australia, including on the internet. Individual
broadcasters and publishers are responsible for ensuring their programming and advertising
comply with regulatory requirements.
The Australian Communications and Media Authority (ACMA) is responsible for
investigating complaints made under the IGA about the provision and advertising of
prohibited and unlicensed regulated interactive gambling services. The ACMA has the
powers to enforce penalties under the civil penalty regime, however complaints regarding
criminal offences can be referred to the Australian Federal Police (AFP) for further
investigation and criminal prosecution.
6
Betting on the outcome of a lottery draw
When wagering with lottery betting services (also called 'synthetic lotteries'), a customer
does not purchase a ticket in the official lottery draw. Instead the customer chooses numbers
through a third party, who will pay out winnings equivalent to those that the person would
have received through the official lottery provider, should they have won.
Lottery betting services will match prizes of each tier including the jackpot that the official
lottery operator would have paid to a customer if they had won with an official lottery ticket
through that service. These services will generally pay out on wins from sales revenue;
however, larger pay-outs may be covered by the operator's insurance policy. In some
instances, the lottery betting service operators may provide incentives which promise
customers higher jackpot amounts compared to those prizes offered under the official lottery
draw.
Current Commonwealth legislative framework
Parts 2 and 7A of the IGA set out prohibitions on, and civil and criminal penalties in relation
to, the provision and advertising of prohibited interactive gambling services in Australia.
Lottery betting services are, arguably, prime facie prohibited interactive gambling services
within the meaning of subsection 5(1) of the IGA.
Subsection 5(1) of the IGA provides that a gambling service that is provided to customers, in
the course of carrying on a business, using an internet carriage service, any other listed
carriage service, a broadcasting service, any other content service, or a datacasting service, is
a 'prohibited interactive gambling service'. The definition of 'gambling service' in section 4
of the IGA includes: a service for the placing, making, receiving or acceptance of bets; a
service for the conduct of a lottery or the supply of lottery tickets; and, a 'gambling service'
within the ordinary meaning of the term that is not otherwise covered by that definition.
However, subsection 5(3) of the IGA lists a number of services which are considered not to
be prohibited interactive gambling services for the purposes of the IGA. This includes
'excluded wagering services' and 'excluded lottery services'.
Subsection 8A(5) of the IGA provides that a service is an 'excluded wagering service' to the
extent that it: relates to the betting on the outcome of an event, a series of events, or a
contingency; is not an 'in-play betting service' (within the meaning of section 10B, which is
relevant to sporting events); and, is not a service of the type listed in paragraph 8A(5)(c).
Paragraph 8A(5)(c) includes a service for the conduct of, or relating to betting on the
outcome of, a scratch or other instant lottery, a service for the supply of lottery tickets, a
service for the conduct of a game (within the meaning of paragraph (e) of the definition of
'gambling service in section 4), and a service relating to the betting on the outcome of a game
of chance/mixed chance and skill.
Lottery betting services provided online, are likely to meet the requirements set out in
subsection 8A(5) to be considered an excluded wagering service, and are thereby permitted
under the IGA.
Section 8D of the IGA provides that a service for the conduct of a lottery or the supply of
lottery tickets that is not an electronic form of a scratch lottery or other instant lottery is an
7
'excluded lottery service'. The terms 'lottery' and 'ticket' are defined in section 4 of the IGA
to include an electronic lottery and an electronic ticket, but otherwise bear their ordinary
meaning. While this provision can be a point of concern, it is not clear that a lottery betting
service could itself be characterised as a service for the conduct of a lottery or supply of
lottery tickets.
State and Territory regulation
State and territory governments are responsible for the licensing and regulation of all legal
forms of gambling within their jurisdictions. Official lottery providers must pay applicable
taxes in every state and territory in which they operate. This guarantees that each jurisdiction
receives a benefit from lottery services being played by its residents.
Online gambling operators, including lottery betting providers, are not subjected to the same
taxation requirements. As long as an online gambling operator is licensed within Australia,
they are able to provide their services nationally subject to any state and territory laws. The
majority of online gambling companies in Australia, including lottery betting operators, are
licensed and regulated in the Northern Territory (NT).
Lottery betting is prohibited in South Australia (SA) due to 'betting on the outcome of a
lottery draw' not being registered as an approved betting contingency, pursuant to the
Authorised Betting Operations Act 2000 (SA) and the Approved Betting Contingencies
Notice 2016. This means that lottery betting operators like Lottoland are unable to provide
their services to South Australians.
On 30 November 2017, the NT Government removed 'betting on the outcome of an
Australian lottery' from the approved betting contingencies register.1 As a result, current NT
licensees are no longer able to accept bets on the outcome of an Australian-based lottery
draw.2
It has been reported that Victoria (VIC)3, New South Wales (NSW)4, Tasmania (TAS)5 and
Western Australia (WA) are currently considering introducing legislation to prohibit lottery
betting services being offered to persons in their respective jurisdictions.
1. The problem
The primary provider of lottery betting services in Australia is Lottoland Australia
Proprietary Limited (Lottoland), which is part of the Lottoland group with global
1
NT Government, Declared sporting events for bookmaking, https://nt.gov.au/industry/gambling/bookmaker-
licences-and-permits/declared-sporting-events-for-bookmaking
2
iGaming Business, Lottoland banned from selling bets on Australian lotteries, published 15/11/2017,
www.igamingbusiness.com/news/lottoland-banned-selling-bets-australian-lotteries
3
Herald Sun, Foreign Lottoland agency linked to tax revenue dip from local lotteries, published 9/07/2017,
www.heraldsun.com.au/news/victoria/foreign-lottoland-agency-linked-to-tax-revenue-dip-from-local-lotteries
4
The Australian, Lottoland may face restrictions in NSW, published 4/10/2017,
www.theaustralian.com.au/news/latest-news/lottoland-may-face-restrictions-in-nsw
5
News.com.au, 'Not welcome here': Lottery betting to be outlawed in Tasmania, published 11/10/2017,
www.news.com.au/finance/money/wealth/not-welcome-here-lottery-betting-to-be-outlawed-in-tasmania
8
headquarters located in Gibraltar. Customers participate through the Lottoland website at
www.lottoland.com.au. Bet3656, William Hill7 and Ladbrokes8 also offer online lottery
betting services as a minor part of their suite of products. Lottoland and these other lottery
betting providers are licensed and regulated in the NT. There may be other smaller providers
in the market.
In 2017, the NT Government advised the Department of Communication and the Arts (the
Department) that Lottoland is the only lottery betting operator licensed in its jurisdiction that
wholly provides lottery betting services. Since its Australian launch in 2016, Lottoland has
reportedly signed up more than 600,000 Australian users9 and estimates to have taken about a
one per cent share of Australia's $2 billion lotteries market10.
Lottoland's Gotta Go campaign
In September 2017 newsagents across Australia launched a campaign to close down
Lottoland. This campaign was conducted by a coalition of newsagent associations and
operators supported by the Tatts Group (which merged with Tabcorp on 22 December 2017).
Television commercials, billboards, in-store posters and parked trucks adorned with the
slogan "Lottoland's Gotta Go" were used to publicise the impact that Lottoland is having on
newsagents and community services11. The campaign made a number of claims against
lottery betting services which are outlined below.
Claim: Jeopardises $1 billion of State and Territory lottery tax revenue.
Campaigners have argued that official lotteries contribute significantly to state and territory
revenue with around $1.1 billion paid in lottery taxes in 2016-17. Unlike official lottery
providers, lottery betting service providers such as Lottoland are not required to pay lottery
taxes in every state and territory in which it operates. If customers move from official lottery
draws to lottery betting services, governments may lose these taxes that can be used to fund
schools, hospitals and roads.12
It has been separately reported in the media that lottery betting has attributed to the loss of
lottery tax revenue in states and territories. For example, recent media reports indicated that
the VIC Government has forecasted that more than $90 million will be wiped from their
budget over the next three years because of falling revenue from state-sanctioned lotteries.13
Meanwhile, the WA Government has reported that the state-regulated lottery operator
6
Bet365, www.bet365.com.au/#/AS/B6/
7
William Hill, www.williamhill.com.au/planet-lottery
8
Ladbrokes, www.ladbrokes.com.au/novelty/lotto
9
Herald Sun, Lottoland offers peace deal to halt campaign to see it banned, published 10 October 2017,
www.heraldsun.com.au/news/lottoland-offers-peace-deal-to-halt-campaign-to-see-it-banned
10
News.com.au, Newsagents push to ban industry-killer Lottoland, published 6/04/2017,
www.news.com.au/finance/business/other-industries/newsagents-push-to-ban-industrykiller-lottoland
11
News.com.au, Newsagents push to ban industry-killer Lottoland, published 6/04/2017,
www.news.com.au/finance/business/other-industries/newsagents-push-to-ban-industrykiller-lottoland
12
Lottoland's Gotta Go, reallotteries.com.au/
13
Herald Sun, Lottoland offers peace deal to halt campaign to see it banned, published 19/10/2017,
www.heraldsun.com.au/news/lottoland-offers-peace-deal-to-halt-campaign-to-see-it-banned/news-
story/a65d5e48afbd92de03495c876e5a86b7
9
Lotterywest, showed a significant drop in the number of Western Australians buying Lotto
tickets, with sales revenue down by more than $60 million last financial year.14
The reduction in lottery revenue could be a result of a number of factors. The 2016 annual
report by the Lotteries Commission of South Australia (LCSA) noted that sales activity for
various games is primarily driven by the frequency and amount of high value jackpots.
During the same year, LCSA identified that Oz Lotto's sales revenue increased by $11.1
million - Oz Lotto ran one $60 million jackpot and three $40 million jackpots in 2016
compared to one $40 million jackpot in 2015. Meanwhile, Powerball's sales revenue
increased by $501,000 - they ran two $70 million jackpots in 2016 compared to one $70
million jackpot in 2015.15
Furthermore, the loss of lottery tax revenue may be part of a larger problem where
jurisdictions other than the NT are seeing a reduction in overall gambling tax revenue due to
the growing prevalence of other gambling products, in particular online wagering services.
In 2014-15, it was reported that the total wagering expenditure was $937.6 million, however,
the NT government collected approximately $10 million in taxes which is less than 1.1 per
cent of the money gamblers lost.16 To address the loss of gambling tax revenue, the SA
Government introduced a 15 percent point-of-consumption tax on 1 July 2017.17 Other states
have indicated interest in introducing similar taxes. WA is reportedly working towards
introducing a similar tax to take effect in January 2019.18 In March 2018, NSW commenced a
public consultation process around a point of consumption tax for online betting.
The Department notes general feedback through consultation with selected state and territory
government authorities indicate that there is currently insufficient data to determine the actual
impact of lottery betting on state taxation revenue. However, it is agreed that any increase
towards lottery betting and away from traditional lottery sales would have a negative impact
on states and territories funding community and other government funded causes.
Claim: Could destroy Australian small businesses
Over 4,000 Australian small business lottery retailers rely on official lotteries for more than
50 per cent of their revenues. Losing customers to lottery betting services threatens to destroy
small and family run businesses. This potentially threatens approximately 15,796 jobs and
4,000 small businesses.19
14
ABC News, Lottoland calls on WA Government not to ban it in the state, updated 11/10/2017,
www.abc.net.au/news/2017-10-11/lottoland-calls-on-wa-government-not-to-ban-it/9039092
15
Report is downloadable from the SA Auditor-General's Department website at
www.audit.sa.gov.au/publications/annual-reports/2016-reports/annual-report-by-agency/lotteries-commission-
of-south-australia
16
The Conversation, South Australia's gambling tax highlights the regulatory mess of online betting,
theconversation.com/south-australias-gambling-tax-highlights-the-regulatory-mess-of-online-betting-72495
17
Revenue SA, Betting Operations Tax, www.revenuesa.sa.gov.au/taxes-and-duties/wagering-tax
18
The West Australian, Punting tax 'could backfire on racing industry': Racing and Wagering WA's Richard
Burt, thewest.com.au/politics/state-politics/punting-tax-could-backfire-on-racing-industry-racing-and-wagering-
was-richard-burt-ng-b88630520z
19
Lottoland's Gotta Go, reallotteries.com.au/
10
Just as there is limited data available to quantify the claims made about the impact of lottery
betting services on state tax revenue, the Department notes that similarly there is limited data
available to quantify the financial impact on small businesses. Consultation with
stakeholders shows that retailers often operate across various business sectors, examples
include independently owned grocery stores, pharmacies, petrol stations, and newsagencies.
Similar to the impact on state taxation revenue, it is likely that any increase towards lottery
betting and away from traditional lottery sales would have a negative impact on small
business revenue.
Claim: Mislead customers into thinking they are entering a lottery draw
The campaign claims that lottery betting service providers are misleading customers by
allowing them to think that they are buying tickets in official lotteries. Lottery betting
services such as Lottoland are not licensed lottery operators and as such, their customers are
not able to enter a lottery via Lottoland.
Instead, customers are able to place a bet against the outcome of a particular lottery. The
campaign claims that there is a Federal Court order preventing Lottoland from suggesting
that customers are participating in an official lottery. Lottoland does state on its website that
they are a bookmaker and not a lottery operator.
Through consultation with the NT Government in 2017, it was confirmed that initially, after
Lottoland's launch in Australia, there was confusion with the clarity of the message being
presented around the product offered. In response to these concerns, Lottoland placed an
explanation on their website that clarifies "What is Lotto Betting?"
Some state and territory governments continue to hold concerns around message clarity
through advertising of lottery betting providers.
Claim: Are not subject to the same regulatory regime applied to official lottery operators
Official lotteries are heavily regulated to protect customers. They are funded by the proceeds
of lottery sales. Lottery betting services are not subject to the same regulatory regime as
official lottery operators which guarantees that all prizes are paid out to winners.20
To date the Department has not been made aware of, or received any complaints, from
consumers who have indicated that winnings have not been paid out by a lottery betting
service provider including Lottoland.
The Department notes that lottery betting providers are regulated as bookmakers or wagering
operators. As licensing and regulation of all legal forms of gambling is the responsibility of
state and territory regulators, it would be up to the relevant state or territory gambling
regulator to enforce the appropriate requirements on their licensees. This includes assessment
of a licence applicant's potential economic contribution to the jurisdiction and integrity of the
applicant's wagering system.
20
Lottoland's Gotta Go, reallotteries.com.au/
11
However, the Department agrees that the difference in regulatory requirements between
wagering and lottery operators may place lottery betting service providers at an unfair
competitive advantage.
Lottery betting services can provide incentives to attract customers, which would not be
plausible with official lottery operators. For example, Lottoland offers a service called
'Number Shield'. By paying a small premium, customers can guarantee that they will win the
full jackpot figure even if there is another Division 1 winner. Official lottery operators would
not be able to offer such a service, and instead would divide the prize according to the
number of winners.
The combination of wagering incentives and offering of higher jackpots at greater frequency
(by allowing customers to bet on international lotteries) would arguably encourage customers
to engage with lottery betting services, and away from official lottery draws.
Further, there are concerns around the operational costs. Lottery betting services rely on
official lottery draws to conduct their betting practices. This means that operational costs for
lottery betting services are minimal - instead, official lottery operators are responsible for the
costs associated with conducting a lottery draw.
AHA and Clubs Australia's response to Kenoland
In January 2018, Lottoland launched a new service called 'Kenoland' which allows
customers to bet on the outcome of overseas Keno draws. This expansion of lottery betting
services has concerned the Australian Hotels Association (AHA) and Clubs Australia whose
members sell Keno lottery tickets in clubs and hotels.
Media reports on the Australian Hotel Association (AHA) and Clubs Australia's response to
Kenoland have echoed similar concerns raised by the Lottoland's Gotta Go campaign. The
Shout quoted AHA's CEO, Stephen Ferguson, stating that in Australia:
Keno is licensed, regulated and taxed by the State and Territory governments. Keno is
sold in hotels across Australia. In comparison to gambling on overseas lotteries such
as offered by Kenoland, the Keno offered in Australian hotels: pays taxes in
Australian states and territories; is wholly regulated within Australia; is offered only
within a supervised retail environment; and helps hotels support over 50,000
community groups at the grass roots level.21
Standing Committee on Petitions referrals
As of 5 March 2018, the Standing Committee on Petitions has referred 66 petitions with a
total of 14,775 signatures to the Minister for Communications for response. The petitioners
have called for the Interactive Gambling Act 2001 to be amended to prohibit lottery betting in
Australia. Petitioners have also raised concerns about the impacts of lottery betting services
on state and territory taxation revenue and the impact on small business newsagencies.
21
The Shout, AHA pushes for Interactive Gambling Act reform, published 21/02/2018,
www.theshout.com.au/australian-hotelier/aha-pushes-interactive-gambling-act-reform/
12
The Department has also received ministerial correspondence items calling for a similar ban.
Impact of NT ban on betting Australian lottery draws
On 30 November 2017, the NT Government implemented a prohibition on the 'betting on the
outcome of an Australian lottery'. As a result, current NT licensees are no longer able to
accept bets on the outcome of an Australian-based lottery draw.22
Feedback from industry and state and territory government stakeholders has suggested that
while this prohibition is welcomed, it does not sufficiently address the concerns associated
with lottery betting services.
2. The need for government action
Despite the limited availability of data at this point in time, the Government is concerned that
the provision of lottery and keno betting services in Australia, and the potential expansion of
these services in the near future, will have adverse impacts on states and territories, small
business and the community. Furthermore, the Government believes that lottery betting
services are contrary to the intent of the IGA.
Intent of the Interactive Gambling Act
The intent of the IGA is to minimise the scope of problem gambling in Australia. Lottery
draws are permitted under the IGA as there has traditionally only been a small number of
draws conducted each week - some seven draws conducted across a week, typically with a
day's break in between. On the contrary, lottery betting services allow consumers to bet on
the outcome of up to 25 lottery draws being conducted around the world each week, with the
promise of massive jackpots ranging up in the hundreds of millions, which could lead to
problem and at-risk gambling.
State versus Commonwealth regulation
The Tasmanian Government announced in October 2017 that it would take steps towards
banning lottery outcome wagering23. Media reports have indicated that VIC24, NSW25 and
WA are currently considering laws to prohibit lottery betting services being offered to
persons in their respective jurisdictions.
There is an option for the Commonwealth Government to not intervene and allow state and
territory governments to amend or introduce legislation in their jurisdictions. This
Department views that state level prohibitions can be beneficial from the stance that it would
also cover land-based gambling (whilst the IGA only covers online gambling). South
22
iGaming Business, Lottoland banned from selling bets on Australian lotteries, published 15/11/2017,
www.igamingbusiness.com/news/lottoland-banned-selling-bets-australian-lotteries
23
News.com.au, 'Not welcome here': Lottery betting to be outlawed in Tasmania, published 11/10/2017,
www.news.com.au/finance/money/wealth/not-welcome-here-lottery-betting-to-be-outlawed-in-tasmania
24
Herald Sun, Foreign Lottoland agency linked to tax revenue dip from local lotteries, published 9/07/2017,
www.heraldsun.com.au/news/victoria/foreign-lottoland-agency-linked-to-tax-revenue-dip-from-local-lotteries
25
The Australian, Lottoland may face restrictions in NSW, published 4/10/2017,
www.theaustralian.com.au/news/latest-news/lottoland-may-face-restrictions-in-nsw
13
Australia (SA) does not permit lottery betting services and it appears that this has been
effective in stopping these services being provided to SA residents.
The Commonwealth holds responsibility over online gambling matters and is best placed to
implement a national position in relation to lottery betting services in Australia. This would
be consistent with the National Consumer Protection Framework (consistent harm
minimisation measures across all states and territories) and the new credit betting prohibition
in the IGA that that came into effect on 17 February 2018. The ACMA would be responsible
for compliance and can respond to any complaints about lottery betting services being
provided by either Australian or international operators.
Constraints and barriers
Lottery betting service providers may restructure their business models so that they can
continue providing their services in Australia.
Subsection 5(3) provides that a 'telephone betting service' is not a prohibited interactive
gambling service. Section 8AA provides that a gambling service provided on the basis that
dealings with a customer are wholly or by way of voice calls using a carriage service are
telephone betting services. However, if the service allows for any particular kinds of
information to be provided by a customer otherwise than by voice call (including selection of
bet types, nomination of bet amounts, confirmation of bets etc.), such a service will not be a
telephone betting service (subsection 8AA(8)).
The Department believes that it is quite unlikely that provision of these types of services as a
telephone betting service would be a viable business model, but will further consult with
stakeholders to determine whether amendments to provisions beyond subsection 8A(5) may
be warranted in the future. The Department also recognises the IGA is limited to the
provision of interactive or online services. Lottery betting services may still be provided at
land-based venues or in face-to-face interactions.
3. Policy options and impact analysis
Option 1: Maintain status-quo
Description
Leave the existing regulatory framework unchanged. Gambling operators would continue to
provide lottery betting services to every Australian state and territory except South Australia.
State and territory governments may introduce legislation to prohibit lottery betting services
being provided in their jurisdictions.
14
Analysis
Benefits Shortcomings
Benefit to Lottoland and Revenue attracted to lottery betting providers, and
other operators as they away from traditional lottery draws, would
would continue to offer negatively impact taxation revenue collections and
lottery betting services in small business retailers.
Australia (subject to new or
existing state laws). States and territories may proceed with introducing
new laws to prohibit lottery betting in their
Benefit to Northern Territory jurisdictions. This would, however, result in further
Government who will inconsistencies in online gambling regulation
continue to receive licensing nationally.
and tax revenue from lottery
betting providers. Contrary to the intent of the IGA to limit online
gambling products that can lead to problem
Customers would be able to gambling.
continue to bet on the
Lottery betting services would continue to use the
outcome of overseas lottery
draws. lottery draws administered by official providers
potentially without payment of fees or commissions
for use of that service.
Negative impacts on lottery industry and small businesses
General consensus from stakeholders is that any sales revenue that is taken by lottery betting
services, and away from traditional lottery services, will have a negative impact on the lottery
industry, state and territory government taxation collections, and small businesses retailers
that rely on lottery ticket sales.
The Department notes that due to limited data, it is not possible to exactly quantify this
impacts in financial terms. However, from advice received by the official lottery provider in
Australia (Tabcorp), for every $1 lottery ticket sold:
55 to 73% is allocated to the jackpot pool to pay customer winnings;
13 to 28% is allocated to state taxes to support regulatory oversight and government
services;
3 to 18% is allocated to operational costs, capital investment and profit; and
7 to 9% is paid to agents for relevant sales costs and income requirements.
Lottery betting operators (under a wagering licence) are subject to different regulatory
requirements from lottery operators. As discussed under the Problem section in this RIS, the
difference in requirements combined with wagering incentives, and higher frequency of high
jackpots, may provide lottery betting services with an unfair competitive advantage.
15
Cross-jurisdictional concerns with enforcement
State and territory governments may introduce legislation in their jurisdictions to address
issues caused by the provision of lottery betting services in their jurisdiction. However, this
may result in further inconsistencies in online gambling regulation nationally and negatively
impact the enforceability of any prohibition against lottery betting.
Should an unlicensed overseas wagering operator offer prohibited lottery betting services,
state regulators would be faced with complications associated with determining who holds
investigative and enforcement responsibility. Without a prohibition at a Commonwealth
level, the ACMA would be limited in terms of what assistance it could provide in dealing
with international entities.
Intellectual property concerns
An additional concern raised is that lottery betting services rely on official lottery draws
internationally to conduct their betting practices. However, it is uncertain whether these
lottery betting services pay any fees for the benefits gained from using the lottery company's
intellectual property.
Industry representatives have raised concerns that if lottery betting services are not regulated
or prohibited, it would appear that the Commonwealth Government is complicit in the
infringement of intellectual property rights of domestic and international lottery operators.
Regulatory Costs
There would be no change to regulatory costs by maintaining the status quo.
Average annual regulatory costs by sector
Business Community Individuals Total change in
Organisations costs
($ million)
$0 $0 $0 $0
Option 2: Complete ban on lottery betting services
Description
Amend the IGA to prohibit interactive gambling operators from accepting bets on the
outcome of a lottery draw. This would include both Australian and international lottery
draws.
16
Analysis
Benefits Shortcomings
Protect taxation revenue Operators who solely provide lottery betting
collections of states and territories services will be severely affected and likely to
and income of small business cease operations in Australia. Other operators
newsagents and lottery agents. would need to change business practices.
Uphold the original intent of the Employees of lottery betting service operators
IGA to limit the availability of could be made redundant.
interactive online gambling
products. Broadcasters, sponsorship and advertiser
revenues may be impacted. Lottoland
IGA amendments would provide advertises extensively through digital,
consistent regulation across all outdoor, stadium and radio channels.
states and territories on lottery
betting services. Freedom of consumer choice will be
negatively impacted. Consumers would no
Commonwealth level intervention longer be able to access lottery betting
will enable the ACMA and services on overseas lottery draws.
Australian Federal Police (AFP) to
investigate and apply criminal and
civil penalties against offending
lottery betting providers, including
overseas operators.
This option would ensure that there is consistent regulation nationally for lottery betting
services and will address the concerns listed under Option 1, including:
Impacts on official lotteries, small business and state tax revenue;
Concerns with lottery betting service providers having an unfair competitive advantage
over lottery operators; and
Concerns that the lottery betting services will continue infringing on intellectual property
rights of lottery operators.
Impacts on current lottery betting service providers and associates
The Department notes that the Australian franchise of Lottoland (Lottoland Australia
Proprietary Limited) would likely close down under Option 2. The company has offices in
Darwin and Sydney and employs approximately 15 staff.26
26
Lottoland Corporate, www.lottolandcorporate.com/en-au/about-us/team
17
Other lottery betting providers William Hill, Bet365 and Ladbrokes would be less affected as
lottery betting is a minor component of their gambling suite of products.
Current sponsorship deals would be jeopardised. Lottoland has a reported three year million
dollar sponsorship agreement with the Manly Warringah football club in the National Rugby
League competition. Manly Warringah Stadium is currently called "Lottoland Stadium".
Lottoland also has a sponsorship arrangement with the Sydney Swans in the Australian
Football League.
Broadcasters and advertisers' revenues would be impacted. Lottoland advertises extensively
through digital, outdoor, TV and radio channels. This was evident during the recent
Australian Tennis Open with the widespread advertising of Kenoland.
It has been reported that Lottoland has some 600,000 Australian users in Australia. 27 A
complete ban would mean that these consumers would no longer be able to bet on the
outcome of international lotteries.
Impacts on NT revenue and other lottery betting related taxes
The NT Government would be impacted - licensed wagering operators pay tax under section
106 of the Racing and Betting Act (NT) which is currently capped at $575,000 per financial
year. Lottery betting companies also pay GST, company tax and payroll tax which would be
lost to the Federal Government.
Regulatory Costs
Average annual regulatory costs by sector
Business Community Individuals Total change in
Organisations costs
($ million)
$ 0.15 $0 $0 $ 0.15
Costs to the wagering industry
The Department expects that the cost of the regulatory burden to the business sector -
particularly for lottery betting and wagering operators - will be around $150,000. Operators
who provide lottery betting services may incur professional fees (which could include legal,
tax and accounting advice) to ensure they are compliant with the proposed prohibition.
The Department is aware of one operator that solely provides lottery betting services
(Lottoland) and three other wagering operators who provide lottery betting services as part of
a suite of services (William Hill, Ladbrokes and bet365). However, there could be other
players operating in the market.
27
Herald Sun, Lottoland offers peace deal to halt campaign to see it banned, published 10 October 2017,
www.heraldsun.com.au/news/lottoland-offers-peace-deal-to-halt-campaign-to-see-it-banned
18
Refund of registration and licensing fees
Lottoland is currently the only operator whose sole business is providing lottery betting
services. As such, they may be entitled to receiving refunds for registration and licensing fees
from the NT government on a pro-rata basis (subject to arrangements with the NT
government).
Lottoland was issued with a NT sports bookmaker's licence in December 2015 and launched
in Australia in January 2016. It is estimated that registration and licensing fees are
approximately $23,394.00. The breakdown is as follows: 28
Item Fee
Bookmaker permit - $132.00
application
Corporate bookmakers 20,000 revenue units, approximately
licence $23,000 for 2015/16 financial year
Police history name check $69
Police history finger print $193
check
Other providers offer lottery betting as part of a suite of betting services. As such, it is
unlikely that the prohibition will impact their gambling operator licences.
Option 3: Partial ban on lottery betting services
Description
Amend the IGA to prohibit interactive gambling operators from accepting bets on the
outcome of Australia-based lotteries. Interactive gambling operators will be able to continue
to accept bets on the outcome of overseas-based lottery draws.
28
Estimates from fees obtained from NT Government website at
https://nt.gov.au/industry/gambling/bookmaker-licences-and-permits/bookmaker-licence-fees
19
Analysis
Benefits Shortcomings
Benefits to lottery betting Revenue attracted to lottery betting providers, and
operators would could away from traditional lottery draws, would negatively
continue to offer lottery impact lottery operators, their retailers and small
betting services on businesses who rely on lottery ticket sales.
overseas lottery draws. Lottery betting services would continue to use the
NT government would lottery draws administered by official providers
continue to receive potentially without payment of fees or commissions
licensing and taxation for use of that service.
revenue. States and territories may proceed with introducing
Customers would continue new laws to prohibit lottery betting in their
to have access to betting on jurisdictions. This is may result in further
overseas lottery draws. inconsistencies in online gambling regulation
nationally.
This approach would align with the NT Government's partial ban of 30 November 2017
where gambling operators are unable to accept bets on the outcome of Australian lottery
draws. The ban would extend to all states and territories and would ensure that bets could not
be placed on Australian lotteries. However, this option would experience similar issues as
outlined under Option 1, namely:
Risks to official lottery, small business and state tax revenue;
Concerns with lottery betting service providers having an unfair competitive advantage
over lottery operators; and
Concerns that the lottery betting services will continue infringing on intellectual property
rights of lottery operators.
This option would provide some benefit to the official lottery industry and small businesses
since lottery betting services will not be able to rely on Australian lottery draws as part of
their betting practices. However, it cannot be said that Option 3 will provide a significant
benefit in securing revenue for official lottery draws and their retailers, and associated lottery
tax revenue for state and territory governments. As the Lotteries Commission of South
Australia 2016 annual report noted, sales activity of various games is primarily driven by the
frequency and amount of high value jackpots. 29 If lottery betting services can continue to
offer massive overseas jackpot amounts far exceeding Australian official lottery jackpots, the
gains to the local industry of a partial ban is limited. It was also reported that, prior to the NT
29
Report is downloadable from the SA Auditor-General's Department website at
www.audit.sa.gov.au/publications/annual-reports/2016-reports/annual-report-by-agency/lotteries-commission-
of-south-australia
20
ban on Australian based lotteries, 70% of Lottoland's customers wagered on international
lotteries which would indicate a partial ban would mostly likely be ineffective.
Regulatory Costs
Average annual regulatory costs by sector
Business Community Individuals Total change in
Organisations costs
($ million)
$0 $0 $0 $0
As this Option would replicate the prohibition the NT Government implemented from
30 November 2017 on its licensed operators, there would be no associated regulatory costs as
the providers of lottery betting services have discontinued betting services in relation to
Australian-based lotteries.
4. Preferred Option
Option 2: Complete ban on lottery betting services
The preferred option is to implement a complete prohibition on online gambling operators
from offering lottery betting services (betting on the outcome of a lottery draw) to customers
in Australia.
The prohibition of lottery betting services will directly impact certain wagering operators and
their customers. First, Lottoland, the only sole provider of lottery betting services in
Australia, would most likely cease business trading in Australia. This will mean that their
economic contributions through tax, employment, licensing and registration fees; and
advertising will be lost. Secondly, customers' freedom of choice on how and with whom they
gambling on a lottery draw will be impacted. However, customers will still be able to enter
official lotteries provided in Australia.
The abovementioned negative impacts are outweighed by the benefits to be gained by the
Australian community. As mentioned in this RIS, the benefits are as follows:
Protect state taxation revenue and small business commissions
Official lotteries pay a considerable amount of tax to each state or territory in which it
operators. According to information provided by the official lottery provider in Australia
(Tabcorp), for every $1 lottery ticket sold:
55 to 73% is allocated to the jackpot pool to pay customer winnings;
13 to 28% is allocated to state taxes to support regulatory oversight and government
services;
21
3 to 18% is allocated to operational costs, capital investment and profit; and
7 to 9% is paid to agents for relevant sales costs and income requirements
Up to the 28% of sales is provided to states and territories in taxation revenue that is used to
fund government and community services such as education, health and infrastructure.
Around $1.1 billion was paid in office state and territory lottery taxes in 2016-17.
Seven to nine per cent of sales is paid to small business lottery sellers including
newsagencies. Many of these 4000 small businesses rely on these commissions to run their
business. In comparison, lottery betting service operators pay considerable less tax to the
Commonwealth and NT governments and are not required to allocate any sales revenue to
sales agents.
General consensus from stakeholders is that any sales revenue that is taken by lottery betting
services, and away from traditional services, will have a negative impact on state taxation
collections, official retailers and small businesses that rely on lottery ticket sales.
Address unfair competitive advantage
The Department views that there are legitimate concerns that lottery betting services have an
unfair competitive advantage over official lottery draws. Lottery betting services are
regulated as wagering operators which are subject to different regulatory requirements from
lottery operators.
Australian official lotteries are built on guaranteed prize pools from ticket sales and are
required to comply with strict audit and consumer protection measures. They would not be
able to compete with lottery betting services that can advertised massive jackpots of
international draws which far exceed those offered by the official lottery providers in
Australia. Further, lottery betting services are able to offer wagering incentives such as
Lottoland's Number Shield and Double Jackpot.30
While wagering systems are assessed for integrity as part of the state and territory's licensing
processes, it is unclear how lottery betting services are required to demonstrate that they can
pay out large cash prizes. However, it is unlikely lottery betting services would be subject to
similar requirements as lotteries since they rely on insurance plans to ensure they will manage
to pay out large prizes in the event a customer wins. Stakeholders have also raised concerns
with the unclear terms and conditions of lottery betting services which appear to suggest that
customers will not receive the full advertised prize should they win.
Uphold the intent of the IGA
The intent of the IGA is to minimise the scope of problem gambling in Australia. Lottery
betting services allow consumers to bet on the outcome of up to 25 lottery draws being
conducted around the world each week, with the promise of massive jackpots ranging up in
the hundreds of millions, which could lead to problem and at-risk gambling.
30
Number Shield guarantees winners of Division 1 prizes will not have to split the Division 1 prize amount;
each winner will receive the Division 1 cash prize in full. Double Jackpot guarantees winners of Division 1
double the cash prize amount of the jackpot offered by the relevant lottery draw.
22
Allow for nationally consistent rules for online gambling
The Commonwealth holds responsibility over online gambling matters and is best placed to
implement a national position in relation to lottery betting services in Australia. This would
be consistent with the National Consumer Protection Framework (consistent harm
minimisation measures across all states and territories) and the new credit betting prohibition
in the IGA that that came into effect on 17 February 2018. The ACMA would be responsible
for compliance and can respond to any complaints about lottery betting services being
provided by either Australian or international operators.
For the above reasons, the Department believes that Option 2 - a complete ban on lottery
betting services (betting on the outcome of a lottery draw) will provide benefits to industry,
government, small business and the community. Limitations of preferred option
The key limitation of the preferred option is that the scope of the IGA is limited to interactive
or online gambling services. Lottery betting services may still be provided at land-based
venues or in face-to-face interactions, however, they will be subject to state and territory
regulation.
There is also a possible issue where lottery betting service providers may restructure their
business models so that they can continue providing their services in Australia.
As mentioned earlier, subsection 5(3) of the IGA provides that a 'telephone betting service' is
not a prohibited interactive gambling service. Section 8AA provides that a gambling service
provided on the basis that dealings with a customer are wholly or by way of voice calls using
a carriage service are telephone betting services. However, if the service allows for any
particular kinds of information to be provided by a customer otherwise than by voice call
(including selection of bet types, nomination of bet amounts, confirmation of bets etc.), such
a service will not be a telephone betting service (subsection 8AA(8)).
The Department believes that it is quite unlikely that provision of these types of services as a
telephone betting service would be a viable business model, but will further consult with
stakeholders to determine whether amendments to provisions beyond subsection 8A(5) may
be warranted.
International experience
Lottery betting services have been coming under increased scrutiny from European gambling
regulators, with lottery betting service operators being blacklisted in several countries
including Greece, Italy and Estonia. It has been reported that lottery betting services were
taking business from national lotteries - which is similar to Australia's situation.31
United Kingdom
31
Gambling Compliance, Secondary Lotteries on European Regulators' Radars, published 10 May 2016,
https://gamblingcompliance.com/premium-content/news_analysis/secondary-lotteries-european-
regulators%E2%80%99-radars
23
In the United Kingdom (UK), a partial ban approach has been adopted. Licensed gambling
operators can offer betting on non-UK based lotteries to customers in Great Britain. For
example, they can take bets on the Irish Lottery, the Health Lottery or other foreign state
lotteries.
Betting on the outcome of lotteries and other lottery themed gaming products must be
presented and advertised in a way that makes it clear that customers are not entering a lottery,
and allows customers to easily identify what product is being offered.32
Section 95 of the Gambling Act (UK) sets out a clear prohibition on offering bets on National
Lottery draws, however some operators have been offering bets on non-UK versions of
EuroMillions (e.g. bet on the outcome of the Spanish EuroMillions draw). EuroMillions is a
lottery run in partnership between a number of lottery operators in European countries and is,
technically, a separate game in each participating country despite being the same draw. The
UK Government has noted that such products are at odds with the intention and spirit of
section 95 of the Act.
In March 2017, the UK Government proposed to introduce a licence condition to prohibit
operators from offering bets on EuroMillions draws outside the UK and commenced a
consultation process.33 In response to this, Lottoland has recently called upon the UK
government to open a far-reaching review into allowing consumers to bet on non-UK
EuroMillions draws after claiming that a recent consultation found no evidence that its lottery
betting product has impacted ticket sales in the UK. Based on that, Lottoland is calling for a
review period lasting for a minimum of two years before any final regulatory or legislative
chances to lottery betting are made.34
5. Consultation
The Minister for Communications, Senator the Hon Mitch Fifield, wrote to the Hon Natasha
Fyles, Attorney General and Minister for Justice in the NT Government, seeking her response
to concerns raised in relation to Lottoland and lottery betting on 18 September 2017. After
an investigation conducted by the NT Government, as of 30 November 2017, NT licensed
sports bookmakers (including Lottoland) were prohibited from accepting bets on the outcome
of Australian-based lottery draws.
In February and March 2018, the Department consulted with selected stakeholders from state
and territory government and industry to provide their views on the existing regulation of
lottery betting in Australia, and the impacts of lottery betting in their jurisdiction or industry.
32
Gambling Commission (UK). Betting on lotteries, www.gamblingcommission.gov.uk/for-the-public/Safer-
gambling/Consumer-guides/Betting/Betting-on-lotteries.aspx
33
Prohibiting Third Party Betting on Non-UK Euromillions Draws,
www.gov.uk/government/consultations/prohibiting-third-party-betting-on-non-uk-euromillions-draws
34
Public Gaming International, The Damage to Brand Lottery Caused by Lottoland and Illegal "Secondary"
Lotteries: A Call to Action, published May/June 2017,
www.publicgaming.com/PUBLICGAMINGMAYJUNE2017/Webarticles/lottoland.pdf
24
This consultation identified that the majority of stakeholders would be supportive of the
preferred policy proposal.
Not all state government bodies were consulted on all issues. It should also be noted that
lottery betting providers were not consulted in relation to the options presented in this RIS,
and would not be supportive of the preferred option.
6. Implementation and evaluation
Subject to Government priorities and parliamentary sittings, it is expected that the Interactive
Gambling Amendment (Lottery Betting) Bill 2018 will be introduced in Parliament in the
2018 Autumn sitting programme.
Role of the ACMA
As the proposed prohibition would be made under the IGA, the ACMA would be responsible
for administering the new measures once enacted. The ACMA is currently responsible for
investigating complaints regarding the provision or advertising of prohibited interactive
gambling services or unlicensed regulated gambling services to customers based in Australia.
The ACMA is able to issue formal warning notices, infringement notices, and seek civil
penalties and injunction orders for contraventions of the IGA. It also administers a list of
licensed interactive wagering services and licensing authorities which acts as an education
tool for consumers.
Evaluation
Compliance information around the IGA, including the number of complaints received about
prohibited interactive gambling services and the enforcement actions undertaken by the
ACMA, will be included in the ACMA's Annual Report which is tabled in Parliament.
25
ABBREVIATIONS
The following abbreviations are used in this explanatory memorandum.
Bill Interactive Gambling Amendment (Lottery Betting) Bill 2018
IGA Interactive Gambling Act 2001
26
NOTES ON CLAUSES
The Interactive Gambling Amendment (Lottery Betting) Bill 2018 is for an Act to amend the
Interactive Gambling Act 2001 in order to prohibit the provision of interactive lottery betting
services to customers in Australia.
Clause 1--Short title
Clause 1 provides that the Bill, when enacted, may be cited as the Interactive Gambling
Amendment (Lottery Betting) Act 2017.
Clause 2--Commencement
Clause 2 provides for the commencement of the Bill.
Clauses 1 to 3, and anything else in the Bill not covered by the table in clause 2 will
commence on the day the Act receives the Royal Assent.
Schedule 1 to the Bill will commence on the day after the end of the period of six months
beginning on the day the Act receives the Royal Assent. This delayed commencement is
intended to provide time for affected service providers and customers to adjust to the new
prohibition.
Clause 3--Schedules
Clause 3 provides that legislation that is specified in a Schedule to the Bill is amended or
repealed as set out in the applicable items in that Schedule, and any other item in a Schedule
has effect according to its terms. There is one Schedule to the Bill, which makes amendments
to the Interactive Gambling Act 2001.
27
Schedule 1--Lottery Betting
Item 1--Section 4 (at the end of the definition of lottery)
Section 4 of the IGA provides that a lottery includes an electronic lottery.
Item 1 of Schedule 1 to the Bill would insert a note to the definition of lottery which provides
that an example of a lottery is a 'keno-type lottery'. This is intended to provide certainty that
'keno' is considered to be a type of lottery for the purposes of the IGA, and accordingly,
betting on the outcome of a keno draw, or a contingency that may or may not happen in the
course of the conduct of a keno draw, would be prohibited as a result of the amendments to be
made by items 2 and 3 of the Bill.
Item 2--After paragraph 8AA(1)(a)
Paragraph 5(3)(a) of the IGA provides that a telephone betting service is not a prohibited
interactive gambling service, with the effect that provision of such a service may be permitted
under the IGA (providing section 15AA is not contravened).
Subsection 8AA(1) of the IGA provides that a service is a telephone betting service for the
purposes of the Act where: the service is provided on the basis that dealings with customers
are wholly by way of voice calls made using a carriage service; and, the conditions (if any)
determined by the Minister under subsection (2) have been satisfied.
Item 2 of Schedule 1 to the Bill would insert new paragraphs 8AA(1)(aa) and (1)(ab) which
would provide that a service is only a telephone betting service where: the service does not
relate to betting on the outcome of a lottery; and, the service does not relate to betting on a
contingency that may or may not occur in the course of the conduct of a lottery.
A 'contingency that may or may not happen in the course of the conduct of a lottery' would
include, for example, the drawing of a particular number at a particular position, the first three
numbers drawn, or the drawing of a particular 'bonus' number. This will ensure that bets
cannot be accepted on the outcome, or any aspect, of a lottery draw.
This amendment is intended to ensure that lottery betting service providers cannot rely on the
class of excluded services in section 8AA as a basis for providing lottery betting services.
Item 3--Subparagraph 8A(5)(c)(iii)
Paragraph 5(3)(aa) of the IGA provides that an excluded wagering service is not a prohibited
interactive gambling service, with the effect that provision of such a service may be permitted
under the IGA (providing section 15AA is not contravened).
Subsection 8A(5) of the IGA provides that a service is an excluded wagering service to the
extent that it: relates to betting on an event, a series of events or a contingency, other than an
event, series of events or a contingency covered by subsections 8A(1) or (3); is not an in-play
betting service; and, is not a service of the type covered by subparagraphs 8A(5)(c)(i)-(v), so
long as the conditions (if any) determined by the Minister under subsection (6) have been
satisfied. Subparagraph 8A(5)(c)(iii) currently has the effect that a service relating to betting
28
on the outcome of a scratch lottery or other instant lottery is not an excluded wagering
service. The term lottery includes an electronic lottery (see section 4 of the IGA).
Item 3 of Schedule 1 to the Bill would repeal subparagraph 8A(5)(c)(iii) and substitute new
subparagraphs ((5)(c)(iii) and (5)(c)(iiia)) referring to: services relating to betting on the
outcome of a lottery; and, services relating to betting on a contingency that may or may not
happen in the course of the conduct of a lottery. A 'contingency that may or may not happen
in the course of the conduct of a lottery' would include, for example, the drawing of a
particular number at a particular position, the first three numbers drawn, or the drawing of a
particular 'bonus' number. This will ensure that bets cannot be accepted on the outcome, or
any aspect, of a lottery draw.
This amendment would have the effect that a service that relates to betting on: the outcome of
a scratch lottery or other instant lottery; the outcome of any other type of lottery (including
keno); or, a contingency that may or may not happen in the course of the conduct of any
lottery, would not be an excluded wagering service for the purposes of the IGA.
Accordingly, provision of a service for betting on the outcome of a lottery, or a contingency
that may or may not happen in the course of the conduct of a lottery, would be a prohibited
interactive gambling service for the purposes of section 5 of the IGA. Section 15 of the IGA
sets out criminal and civil penalty provisions for the provision of such services to customers
in Australia.
Item 4--Transitional--acquisition of property
Subitem 4(1) of Schedule 1 to the Bill is a constitutional saving provision that would provide
that new paragraphs 8AA(1)(aa) and (1)(ab), and subparagraphs 8A(5)(c)(iii) and (5)(c)(iiia),
have no effect to the extent (if any) to which their operation would result in an acquisition of
property (within the meaning of paragraph 51(xxxi) of the Constitution) from a person
otherwise than on just terms (within the meaning of that paragraph).
Subitem 4(2) of Schedule 1 to the Bill is a transitional provision that has the effect of ensuring
that providers of lottery betting services will not be prevented from recovering debts deferred
or incurred by customers prior to the commencement of the new prohibitions contained in
Schedule 1 to the Bill. Subitem 4(2) provides that new paragraphs 8AA(1)(aa) and (1)(ab),
and subparagraphs 8A(5)(c)(iii) and (5)(c)(iiia), do not prevent a person from recovering a
debt that was deferred or incurred before the commencement of item 4.
29