Are Online Casinos Legal In Australia

Are Online Casinos Legal in Australia?

The internet boom brought with it drastic changes to the way we live and do business — one of the most affected and disrupted markets in the casino industry. The internet brought with it the idea that you can always play round the clock and still get the same type of entertainment in a casino while at the comfort of your living room. The development of HD video streams further improved the idea of live casinos, where you can an even more intense and realistic casino environment complete with live dealers.

Gamers jumped onto the idea, and in the past two decades, we have seen a boom in the online gaming world. A new online casino is launched with each dawn, with literally thousands of online platforms giving you access to casino games online.

Since the Interactive Gambling Act became law in Australia back in the year 2001 it has been illegal for any online casino or in fact any type of online gambling site to offer their services by way of advertisements in Australia. This piece of legislation of course hasn’t in any way stopped such sites and companies promoting their sites online, and as a casino game player based in Australia.

While this revolution was a great step forward for the igaming industry, it also brought with it a multitude of problem. The most frowned upon of these was the addiction issue due to the easy access of online betting platforms. For this and several other reasons, various governments have embarked on cleansing missions to regulate this industry that is still rapidly growing.

One of the most affected markets in these government regulations in Australia. Despite having a highly lucrative gambling market, the online betting industry has faced a number of hurdles that are proving hard to beat.

History of Online Casinos in Australia

Just as with the rest of the world, online betting and gaming saw tremendous growth in Australia. Traditionally, gambling was a favorite pastime for many Australians. Most studies ranked the country as having the highest rate of gambling worldwide, with nearly 80% of all adults engaging in some form of gambling, which could be anything from casino games to horse racing, sports betting and lotteries.

The introduction of online casinos towards the end of the ’90s further drew in more people. Over the past two decades, Australia has had one of the most vibrant online gaming industries. Mobile gaming has also been showing steady growth, with an estimated 50% of all online gaming activities taking place via mobile phones.

As it has been established over the years, gambling can be highly addictive. This has been a major issue in Australia, prompting the government to jump into action and try to curb the rate of addiction.

The Interactive Gambling Act (IGA)

The first of such measures was brought on board through the Interactive Gambling Act. Commonly referred to as the IGA, this was a bill tabled in the Australian parliament in 2001. The bill was passed into law in mid-2001 by the Australian parliament, setting the ground for stricter regulations on gambling, primarily online betting.

The main focus with the IGA was the fast-rising online casino industry. The bill termed it illegal to offer real-money interactive online betting services to Australian residents. In addition, all operators were prohibited from advertising their online gaming and betting services in Australia.

With this law, technically it was not illegal to access online and use an online betting service while in Australia. This left a gap that was capitalized by offshore companies. Since it was practically impossible to get Australian licenses, companies would register offshore in other countries and still offer their services to the Australian clientele. For this reason, online gaming and betting were still vibrant up until recently when an amendment was introduced to the old bill.

The 2016 Bill

The new amendment to the 2001 Interactive Gambling Act was introduced to parliament by MP Alan Tudge in 2016. In his proposed amendments, he recommended stricter laws that will clarify the government’s stand on offshore companies that were still in operation in Australia. A section of MPs aired their outright objection to the bill since it only aimed at regulating the online sector yet the land-based casinos were still flourishing. Despite the objection, the bill was subsequently passed in February 2017 and became known as the IGA Amendment Bill 2016.

The contents of this new amendment made it clear that it was outrightly illegal to conduct any form of real-money interactive gaming in Australia. The bill further brought in distinctive definitions for ‘regulated interactive gambling services’ and ‘prohibited interactive gambling services.’ These definitions are now used as the primary basis of regulating the form of online betting and gaming one can access in Australia.

Based on the definitions, the amendments made it clear that online casinos are illegal in the country. By extensions, any other form of interactive online betting services such as in-play betting, online bingo, and live lotteries were also made illegal. It is also illegal to advertise and promote such services directly targeting the Australian people. Further, any Australian-based companies are prohibited from offering interactive online gaming services to gamers in designated countries.

A country could request the Australian government to considered a ‘designated country’ if it has legal structures that also prohibit online gambling. In addition, the Australian government can report any offshore company to its home country government for action to be taken if found in contravention of these laws.

Through the enactment of the Interactive Gambling Act Bill 2016, it is now illegal for offshore companies to offer interactive online betting and gaming services to Australian residents. Further, the local ISPs are mandated with the task of putting in place the requisite filters to such traffic. This means that even accessing offshore online casino sites while in Australia is a problem, let along being illegal. Further, this act has been criminalized, and any offshore accounts are offering such markets to Australians could face criminal and civil penalties.

Play Online Casino In Australia

Are Online Casinos Legal In Australia

Is Poker Prohibited?

As it is the case with online casinos, the 2016 amendment bill covered online poker activities as well. Before the passing of the bill, their proposals to have poker reclassified as a game different from other online casino games. The argument here was that the poker is technically a game of skill. Unlike other online casino games that are based on luck, with poker, you can only win using good strategy.

But as it turned out, the Australian parliament would not hear any of this. As per the definitions in the bill, online poker falls under the prohibited interactive gambling services. This means that you will not find any online poker rooms in Australia or any sites legally offering such services. Of course, there are a number of sites and operators that find a way of dodging the barriers and still reach the Australian markets.

The risk of playing at such sites is that they are illegally offering their services to the markets. As such, the sites could be rogue as there are not regulations binding them. This means you can easily lose your deposits or they even refuse to pay your winnings, and there are no further actions you can take for follow up. In addition, you will be playing in such poker rooms illegally, which also puts you as an individual at risk of prosecution.

With recent developments, we have seen some MPs still try to push the reclassification of poker. If this proposal sails through, they might in the near future see a re-introduction of online poker rooms. In this proposal, the idea is to have sites that offer online poker services exclusively, and no other online casino or betting services, as it is the norm with most online casinos. Whether this proposal is adopted remains to be seen.

What about sports betting?

Interestingly, sports betting is still a vibrant market in Australia, amid all the regulatory measures put in place. There are numerous websites registered and licensed in Australia to offer sports betting services. In addition, a good number of offshore companies including leading brands also have a presence in this market. Sports betting is thriving here, with several in-store retail betting outlets being set up around the country.

It is, however, important to note that the sports betting markets in Australia are quite different from what you would have in some other relaxed jurisdictions. For instance, any form of interactive online activity in sports betting is prohibited. This is inclusive of in-play sports betting which is outrightly banned in Australia. Before the passing of the Interactive Gambling Act Amendment 2016, some sportsbook operators used to provide in play betting by using a clever trick referred to as ‘Click to Call.’ This is a technology that allowed gamers to place instant bets through an in-app function that simulated phone calls.

During the passage of the amendments bill, the legislators made it clear that this was illegal. Any operators offering such would be committing an offense in contravention to the amendments bill.

Other than that, you will find a good number of online sportsbooks giving you access to global sporting markets. Horse races are also quite popular in Australia, and a good number of online sports betting site offer betting markets on various horse races and tournaments. The betting options are similar to what you get with other offshore sites, with the exclusion of in-play betting.

Implications on the Online Gaming Market

While the regulations in the Australian online casinos was meant for the good of the masses, it dealt a major blow to the online gaming and betting industry. Many online casino operators started pulling out from the Australian market even months before the passing of the laws. Sensing the hostility of the legal environment, casino software providers such as NetEnt and Microgaming also started withdrawing their services from the Australian market.

This left such a huge gap in the online gaming market in the country. To some extent, one would say the plan worked out. However, as per the argument put forward by Senator Leyonhjelm during the debate on passing the amendments, the law does not improve on the gambling addiction issues.

By denying gamers access to online betting services, you simply drive them back to the land-based casinos. For instance, poker remains quite a popular betting activity in the country, more than two years after the passing of the bill. As Senator Leyonhjelm pointed out, Australia still has a very active poker community that is growing by the day. Land-based casinos and betting halls viewed these regulations as a lifeline that protects their business from the direct threat of online markets. Subsequently, the land-based operators have continued expanding their businesses with time.

In addition, the illegalization and blocking of sites fail to work in instances where gamers use virtual private networks. Provided you already have an account with an offshore site and a stable VPN connection, you can still bypass the barriers and play any online casino game. This is riskier as you could be exposing yourself to rogue casino operators.

Based on history, making online casinos and games illegal only serves to build the ‘black market’ where illegal operators thrive. Surveys conducted over the years showed the number one push-factor for most Australians to illegal offshore sites was access to in-play betting. The complete ban on this market and even attempts to block ‘Click-to-Call’ betting will only exacerbate the problem.

Payments Options for Australian Gamers

As part of the regulations on online gambling and betting, the government brought on board banks and financial service providers. The companies were mandated to come up with ways of blocking payments done to international offshore betting companies. This means that even if you can get access to an offshore online casino, you will have a challenge paying with some credit and debit cards such as Visa or MasterCard.

However, if you are playing on a legally registered site, then you should have no worries about the payment options. This is particularly so for sports betting as it is the only readily available online betting activity in the country. With most sports betting sites, you can pay and also make withdrawals using any major cards, e-wallets, online banking systems or even bank transfers. The availability of these options is determined by the company itself. If you encounter any challenges with using a credit or debit card, it is important you first liaise with your bank as they could be having blanket bans on payments to betting companies.

Interestingly, the Australian government does not charge any taxes on winning you make while betting online. The reason for this legally, gambling is not considered as an occupation but merely a pastime hobby. As such, any winnings are considered to be from sheer luck rather than labor. Instead, the government imposes taxes on the site operators, based on the revenue generated. The taxation rates tend to vary from one state to another.

What does the future hold for online gambling in Australia?

From the look of things, the government does not show any signs of backing down on their regulations. For any online casino operator hoping to capitalize on the Australian market, they will have to remodel and restructure their business propositions to align with the legal structures. For instance, if a company is seeking to offer sports betting purely, then this is an area that they can easily gain access into the Australian market.

In addition, debates are still ongoing in the aspect of credit betting. Presented to parliament after the passage of the 2016 amendments was a proposal to regulate the extent of credit betting. Technically, the idea in these proposal was to have a ban on credit betting. The only exemption to be considered was if the gambling service provider offering the credit betting service has an annual turnover of no more than AUD 30 million. By most company standards, this quite a low ceiling as most companies have a turnover exceeding the AUD 30 million figure. If the proposals are to be enacted, it would mean any company that breaks these regulations and offers credit betting would have committed and criminal and civil offense, which could attract hefty penalties.

Are Online Casinos Legal In Australia

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Conclusion

The only hope left for online casino operators is for the reclassification of online poker as a regulated online gambling activity rather than a prohibited one. A study was to be done to evaluate the Australians’ perception of online poker and also weigh the social and economic impacts of having online poker readily available. If the reports are favorable and the motion is passed, it could perhaps create room for online poker providers to rejoin the market.

In the meantime, gamers in Australia will have to make do with gaming in land-based casinos.

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