A National Consumer Protection Framework for Australian Online Licensed Wagering Operators: Proposed Changes to the Australian Regime


Following the Review of Illegal Offshore Wagering which concluded last year (O’Farrell Review)1 the Australian Government, in its response to the O’Farrell Review, recommended the adoption of a number of measures to:

  1. prohibit illegal offshore online wagering operators; and
  2. implement a national consumer protection framework (NCPF), to be met by licensed online wagering service providers.

Prohibition on illegal online gambling operators

The first element of the Government’s proposed course of action is in the process of being implemented. On 10 November 2016, the Interactive Gambling Amendment Bill 2016 (IGA Amendment Bill) was introduced into the House of Representatives, and seeks to amend the Interactive Gambling Act 2001 (Cth) (IGA Act). If passed, the IGA Amendment Bill will bring major change to the way online gambling is regulated in Australia through the introduction of additional enforcement measures and making it unlawful for wagering operators to provide online wagering services to persons present in Australia in the absence of having an Australian wagering licence.2

Uniform approach to consumer protection in Australia

The second action item identified by the Government will be the introduction of the NCPF. The objective of the NCPF will be to “empower individual gamblers to ensure that problem gambling is minimised,”3 and to put in place a nationally consistent policy framework for the regulation of online wagering.

Currently, the NCPF is in the consultation phase, and is yet to be formally agreed between the States and Territories. However, once adopted, any online wagering operator licensed in Australia will need to adjust their business practices so as to ensure that they are NCPF compliant.

Regulation of Consumer Protection in Australia

Australia does not currently have a nationally consistent consumer protection framework in place which relates specifically to online wagering. Currently, consumer protection in Australia is regulated differently in each State and Territory. While the obligations on wagering operators are onerous, the variation between jurisdictions is problematic for Australian licensed wagering operators conducting business on a national basis. For example, in some cases, it is necessary to prepare up to four different versions of a marketing communication to ensure compliance throughout Australia.

Proposed changes under the NCPF and what they mean for Wagering Operators

According to the Communiqué4 released on 25 November 2016, State and Federal Government Ministers have agreed that 11 harm minimisation measures are to be included in the NCPF.

We have previously set out a list of each proposed measure, and you can see that here.

Some of the key changes proposed to be introduced by the NCPF are:

  1. A national self-exclusion register for online wagering
    This register would facilitate the exclusion of a person from accessing the services of multiple online wagering operators through a single, centralised application process. It is intended that this will combat the ease with which consumers are able to circumnavigate current self-exclusion restrictions, simply through signing up with an alternate online wagering operator.
    The mechanics of exactly how the self-exclusion register will work are presently unclear. For example, it is not known whether the limits set for self-exclusion will relate to time or monetary expenditure (or both). Additionally, whether the power to exclude a person from participating in gambling activities could be exercised by third parties (such as family members) has not yet been determined.
  2. A voluntary, opt-out pre-commitment scheme for online wagering
    It would be mandatory for online wagering operators to offer each of their Australian based customers the opportunity to set pre-commitment limits to help control their wagering activities. Similar requirements are already imposed on online wagering operators who offer their services to South Australian customers under the Gambling Code of Practice Notice 2013.
    The implementation of a nationally consistent regime to limit the amount spent and amount lost by a customer is consistent with the approach taken by the UK Gambling Commission.
  3. Prohibition of lines of credit being offered by online wagering providers
    Despite the recommendation made by the O’Farrell Review that “operators should be required to apply additional consumer protections where ‘credit or deferred settlement is available”5, the Australian Government has indicated that it intends to impose an outright ban on online wagering operators making available any form of ‘credit betting’ or deferred settlement facilities to their customers.
  4. A reduction in the current 90 day verification period
    The current 90 day verification time period mandated under the Anti-Money Laundering and Counter-Terrorism Financing Rules Instrument 2007 (No. 1) is considered to be in excess of the period needed to verify a customer.
    There is also an additional anti-money laundering risk under the current 90 day verification process, as currently a customer may open an account, load it with (illicit) funds and then close that same account before expiry of the 90 day period.
    Accordingly, a reduction in the verification period is aimed at mitigating the risks associated with money laundering and terrorist financing, as well as preventing children under the age of 18 from opening a wagering account and participating in gambling activities.
    The O’Farrell Review recommended a reduction in the verification period to 45 days. This is still longer than the time periods allowed for licensees in the United Kingdom (72 hours), Gibraltar and Italy (who each allow only 30 days for verification).

What does this mean?

Many of the measures that are proposed to be introduced by the NCPF, for example, staff training and 45 day KYC verification are generally already required under the Northern Territory Racing Commission (NTRC) licence conditions, or otherwise under the NT Code of Practice for Responsible Online Gambling, with which all operators licensed in the NT are required to comply. (Most of Australia’s online wagering operators are licensed by the NTRC.)

It is difficult to speculate whether the introduction of these measures would achieve the objectives of the NCPF, given that there is little empirical data on the success of many of the proposed harm minimisation measures in the online gambling space.

Additionally, to what extent the NCPF will vary the current regime, particularly with respect to online advertising and the provision of inducements, is not clear.

An NCPF working group has been established and is likely to meet again early this year.

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1.For more information, please see our focus paper “Australia – Release of Report on Illegal Offshore Wagering – Another Missed Opportunity for Reform of Australia’s Prohibitions on Online Gambling?”, available here.
2. For further discussion on the effects of the IGA Amendment Bill click here.
3. See http://www.minister.communications.gov.au/mitch_fifield/news/consumer_protections_and_tougher_laws_to_combat_illegal_offshore_wagering#.WE5LzrJ96Uk.
4. The Communique outlining all 11 measures is available here.
5. See page 154 of the Review, available at: https://www.dss.gov.au/sites/default/files/documents/04_2016/review_of_illegal_offshore_wagering_18_december_2015.pdf.

Liability limited by a scheme approved under Professional Standards Legislation.
© ADDISONS. No part of this document may in any form or by any means be reproduced, stored in a retrieval system or transmitted without prior written consent. This document is for general information only and cannot be relied upon as legal advice.