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The Chips are Down and Out Down Under

by Glenn Baird - August 18, 2017

In less than a month’s time the door will close on Australia’s online poker community, as the country’s Senate has finally agreed to enact the 2016 Gambling Amendment Bill. The change to the law originally passed in 2001 means that it will now be illegal for operators to offer online poker to anyone living in Australia. The law will look to prosecute the operator and not the player and it has been suggested that any operators who try to offer unlicensed online poker could receive a fine of up to five million dollars.

When the original bill was passed in 2001 it was done so without the presence of a significant online poker community. The bill looked to outlaw online casino games operating in Australia but did not take into account the influence of companies based in other parts of the world. This meant that there was a huge influx of online poker companies from overseas. Of course, this problem could not have been predicted in 2001, hence the subsequent clamour from anti-gambling campaigners that finally led to last year’s amendment being given the green light.

The growth in poker’s online popularity can be significantly attributed to the influence of Joe Hachem and his 2005 win at the World Series of Poker. Since then Australians have embraced the game and exploited loopholes in the 2001 Interactive Gambling Act that allowed consumers to use offshore casinos.

Despite the exodus of online poker sites at the start of the year, the decision to enact the bill was by no means a foregone conclusion. Just last month, Senator Leyonhjelm, head of the Australian Online Poker Alliance argued that, “the only winners will be unregulated, untrustworthy offshore operations, and punters will have no protection if they get ripped off.”

Leyonhjelm is highlighting the key argument that most pro online poker campaigners have been shouting about since the bill was proposed last year. No one seems to believe that online poker will just disappear, but what players can be guaranteed to lose is a safe, regulated environment to play in.

Dr. Sally Gainsbury, a university professor, enlisted by the AOPA reiterated the opinion, stating:
“A lot of people will continue to play, and they will be forced to use sites that potentially have fewer consumer protection mechanisms and be exposed to risks related to developing gambling problems, as well as potentially being cheated or losing their funds.”

However, the argument levelled against Leyonhjelm was that online poker had never been formally legalised in Australia and that the bill passed in 2001 was drawn up at a time before online poker had been properly imagined within the country. As such, had the Senate been aware of the growth and impact of online poker in Australia they would have ensured that there were no loopholes for offshore casinos and poker rooms to exploit.

In a last ditch attempt to maintain regulated online poker within the country the Australian Online Poker Alliance was formed. The organisation was looking for support from anyone who wanted to see online poker remain in Australia. Their big argument was that, “the large public operators that are listed on the London and New York stock exchanges, which are licensed by regulators who impose strict customer protections, fraud and anti-money laundering measures, will be forced to withdraw from the market. The legislation will leave the risky, unregulated offshore operators as the only option for players, creating an unsafe poker environment.”

They added:

“As consenting adults, it should be our right to be able to play poker safely and securely with responsible and reputable companies.”

Online poker is hugely popular in Australia and it would be naive for Australian authorities to think that this new bill will see an end to those participating in online poker in the country. What it means now is that consumers will have no protection. It will also mean a loss of tax revenue and most importantly it means the end of a pastime, a hobby or even a living for thousands of poker players in Australia.

Senator Xenophon carefully argued that he did “not want to be seen to be encouraging an expansion of gambling, but there is an inconsistency in the approach of the government and opposition to sports betting, where you can bet thousands of dollars at a time per game or per sporting event—per horse race—compared to online poker, where there could be some very strict limits as to what could be bet. It is something that needs to be debated further.”

Whilst there would be an even bigger outcry if online sports betting was made illegal in Australia there does appear to be, as Xenophon pointed out, hypocrisy at play here. The reasons given to outlaw online gambling could easily be awarded to online sports betting. In fact, some would even go as far to say that online poker involves much more skill and much less luck than sports betting. That defining online poker as a game of chance, along with slot machines and roulette, is derisory and outright unfair.

However, those in favour of the ban would argue that poker is a casino game, just like blackjack and craps and as such should be treated in the same manner.

Australia is a country that spends more on gambling, per head, than any other country in the world, with over 80% of Australian adults engaged in in some form of gambling. With numbers that high it is hardly surprising that Australia has a large number of problem gamblers, the social cost of which is estimated to be at least $4.7 billion each year.

It’s clear that Australian authorities have to do something to help prevent the problem. But is making all online gambling and poker sites illegal really the best option? Will doing so actually prevent problem gamblers from using unregulated sites?

You could argue that it is the easiest option. That it is the most effective way for the government to distance themselves from the problem and wash their hands of the negative press that problem gambling brings.

A regulated industry with self-exclusion policies and betting limits would be a much more demanding, time-consuming solution, regardless of whether or not it is the most effective one.