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New National Consumer Protection Framework Sends Shocks through the Australian Gambling Sector

by Dame de Coeur - May 2, 2017

Australian Flag MapIn a no-doubt well-intentioned move in March, the Australian Senate passed the Interactive Gambling Amendment Bill – first mooted last year – with the sole intent of preventing illicit and unethical online gambling activities from occurring in Australian territory – mainly connected with unlicensed offshore companies. It is perhaps only now that the Australian gambling industry is fully realising the implications of the Bill, first conceived to aid the successful application of existing sports betting regulations in Australia, as several of the major trusted industry leaders have since pulled their brands from the Australian market. In a move that aimed to give greater consumer protection within the online gambling industry, the government failed to consider that it might do more harm than good, causing an exodus of reputable brands, allowing those operating illegally to pick up their market share. So far companies such as Vera & John, 32Red, 888Poker and William Hill have left the Australian market, with several other large operators looking likely to follow suit imminently.

The Australian Gambling Research Centre recently published a paper put together by Dr Sally Gainsbury, a Senior Lecturer in the Centre for Gambling Education & Research at Southern Cross University, noting that the participation of Australian citizens in the interactive gambling sector was rapidly rising due to the increased availability of mobile gambling on portable devices such as phones and tablets. Mention was also made of the fact that the number of Australian citizens partaking in online gambling has spiked since 2008 – with over 50% of those currently gambling online only starting to do so post 2008. Similarly, gambling spending in Australia is growing at a rate of 15% per annum. Such rises in participation and spending have naturally led to government scrutiny of the sector and its practices.

The Australian Human Services Minister, Alan Tudge, was tasked with addressing a range of issues surrounding Australia’s $20 billion online gambling sector on his appointment in February of 2016. He has undoubtedly treated the issues with the seriousness they deserve and an in-principle agreement has just been reached to reform the industry. Early indications suggest that some of the new regulations could be in place by July of this year, with the rest of the changes resulting from the 11-measure package – known as the National Consumer Protection Framework – scheduled to follow before the end of the year.

Many of the proposed measures look to be welcomed by players – such as the creation of a centrally held national register of players wishing to self-exclude (to be in place by September of this year) and a voluntary scheme that will allow players to establish their own predetermined spending limits. Another popular proposal is the application of a blanket ban on gambling operators linking to payday loans companies – or indeed offering lines of credit themselves. It will also become mandatory for operators to provide players with statements logging their gambling activities so that they can keep a closer eye on their spending habits linked to online gambling. Less popular may be the suggested move to allow financial institutions powers to block gambling related transactions as some players fear a move towards a US style veto on online gambling in the long run.

Most concerning of all is the very real possibility that the steps taken by the Australian government to protect online players may result in exactly the opposite happening. The newly spawned, National Consumer Protection Framework, is likely to state that only operators licensed in Australia are eligible to offer gambling services to citizens of the country. This leaves online poker players high and dry as Australia does not license online poker – fans of this particular game will have no choice but to place their hard earned cash in the hands of offshore operators under no obligation to abide by Australia’s laws – gambling related or otherwise – surely the very situation the new gambling legislation was designed to avoid.