AUSTRALIA EFFECTIVELY BANS ONLINE GAMBLING

AUSTRALIA BANS ONLINE GAMBLING

On March 21, 2017, the Australian Senate cleared the Interactive Gambling Amendment Bill 2016, effectively eradicating online poker from the country’s entertainment landscape.

The bill was first introduced in November by Australia’s Minister for Human Services Alan Tudge chiefly as a method to shore up Australia’s sports betting laws. Sports betting – online and otherwise – has been allowed in the country, but there were harsh restrictions on “in-play” sports betting, where bets are placed on sports contests while those contests are being played. In-play sports betting was permitted, but only via telephone, not through online means.

With the advent of smart devices, offshore operators developed apps to allow players to place in-game sports bets. They were able to get away with this due to a loophole that owed its existence to the law’s vagaries. Smartphones qualify as phones, therefore in-play bets made with these devices are being placed with phones. Evidently, this is not the intent of the existing law, but operators still got away with it.

So, that particular loophole was tightened, but along with it, other variants of internet gambling were killed. The Interactive Gambling Amendment Bill 2016 prohibits all forms of online gambling that are not explicitly legal in Australia. Only sports betting is considered explicitly legal, thus poker is now illegal by a technicality.

It is now widely believed that it is now just a matter of time before most online poker operators depart the Australian market, an important one in the industry. Vera&John – a bingo site – was the very first operator to ditch Australia in anticipation of the bill in December 2016. 888poker followed suit shortly after in January.

Back in November 2016, Amaya CFO Daniel Sebag stated in an earnings call that PokerStars would probably get out of Dodge as well.

“In Australia, we currently offer poker and are reviewing the applicability of proposed legislation to player versus player games of skill,” he said. “At this time, it would appear likely that if the legislation passes, we would block players from Australia. As we do not offer casino sportsbook in Australia, it currently contributes to about 2.5% of our revenues and we estimate it could reduce our EBITDA margin by up to a 150 basis points.”

It is a tumultuous issue for operators. In some nations, online poker is represents a ‘grey area’ so they feel comfortable offering poker. In Australia, there will be no manner to acquire a license, since there does not exist a poker licensing regime, and those operators who offer poker without a license could face stiff penalties.