Editorial

Monday, 19 April 2010 02:41 Last Updated on Monday, 19 April 2010 02:42

Australia, where online gambling is currently illegal may be moving towards legislation that would legalise and regulate the industry, in line with the current world trend.

There is no getting away from the fact that the benefits of legislating and regulating the online gambling industry far outweigh any social or moral disadvantages. This is purely due to the regulatory nature of legislation to control an industry that, if left unregulated would continue to thrive underground. History is littered with examples where unregulated underground black markets cause far more social, moral and financial headaches than regulated, legal and above board markets. This is a situation that politicians finally appear to be waking up to. Of course it is the financial benefits that seem to have attracted the attention of politicians. But if that is what it takes for them to sit up and take notice of what is going on around them, then it surely must be a good thing.

Many members of the legal profession, CEOs and senior members of large companies, media entrepreneurs, webmasters and financial analysts are in agreement with what many politicians are now realising, which is that legalisation and regulation is definitely the way forward. They are also well aware that when there is a commodity that people want that is driven underground by draconian rules and strict laws, it will flourish and thrive through criminal activity, organised gangs and money laundering operations. All the while, the illegal activities continue unabated by ineffective policing while the general public go about their business blissfully unaware of the damage being done to their society from the inside out until their comfortable bubble is burst when it directly affects a close friend, family member or loved one. Then it becomes all too painfully apparent that consumer protection has been lost from the lack of legal control.

It is this side of social, moral and consumer protection that legislation can address, by bringing everything out into the open. A legal and regulated industry can more effectively be policed by using the legal system with the power of the pen. This is vastly superior to using a big stick in the form of police raids and arrests where the criminals just move to a different place or more criminals appear to take the place of those that are taken out of the game by a spell in jail! 

According to KPMG, the corporate statistic gathering outfit, the creation of new laws that will officially allow gaming companies to provide online products and services to gamblers in Australia are virtually inevitable. This is mainly because of the potential tax benefit that will significantly swell the federal government's coffers, as well as the ability to control an industry that is far better off being controlled than not.

The Australian Productivity Commission can also cite the very sobering figure of $790 million spent by Australians on Internet gambling that was carried out via overseas based casino and poker websites in 2008. That year was a very big online gambling industry growth year, where the casino website portfolio was built up into double digits in order to keep pace with demand from both consumers and the B2B sector. A recommendation to liberalise and regulate online gambling has been made by the commission to the Australian government. It recommends that Australian companies be permitted to provide casino games and poker to local customers via the Internet. This will bring it into line with online sports betting, which is already lawful and regulated.

Naturally, all of the growing excitement about the prospect of a legal and regulated Australian online gambling industry has caught the attention and raised the hackles of moral activists and anti gambling campaigners who seem to have their own reasons for wanting to suppress and drive further underground a market that will simply not allow itself to be suppressed. Senator Nick Xenophon has voiced his concerns that the Australian government must resist the temptation of the extra tax revenue.

His opinion is that if the floodgates are opened to online gambling, a tidal wave will be created of new problem gamblers, which will include younger people. He says that governments should not allow themselves to cave in to the temptation facing them for regulating online gambling on the basis of getting more taxes. Interestingly, Xenophon opposes the creation of an Internet filter, while opining that policing offshore websites that offer gambling services is possible with sufficient political will.

Some insiders from the gambling industry in Australia believe that a government move toward the liberalisation of online gambling is unlikely to happen in an election year, with many more important issues to attend to. There are far larger issues that can swing an election, such as health reform, the problems of illegal immigrants and what to do about boat people, never mind the proposed Internet filter and its associated blacklist of websites. These and other issues are all adding up the odds of losing at the next election. In fact, one intrepid punter has bet $10,000 that Labour will lose!