Government Commission: Internet Gambling in Australia Must be Opened to Competition

The national government’s Productivity Commission has just released its final report on land-based and Internet gambling in Australia, and the recommendation is for Australian state monopolies should no longer have exclusive right to wagering licenses.  

The Productivity Report recommends that “state governments not renew retail wagering licences when most of them expire between 2012 and 2016.” Tatts Group and Tabcorp are at present the only businesses with licenses to do business in Australia. Tatts, doing business as UniTAB, earns about AU$130 million (US $113.6 million) before taxes in Queensland, the Northern Territory and South Australia. Tabcorp holds the license in Victoria and New South Wales, making pre-tax income of AU$252 million (US $220.2 million) in 2009. 

Tabcorp was recently ruled against in New South Wales for its monopolistic practices against online bookmaker Sportsbet in what in being called a landmark decision for providers of online sportsbooks in Australia. Betfair Australia also has a case against Tabcorp in court right now.  

Meanwhile, the Victorian Commission for Gambling Regulation will soon be ruling on charges levied against VenueNet. By means of a VenueNet internet kiosk, South Melbourne pub The Rising Sun offered online access to old Tabcorp enemies Sportsbet, an Australia-based online bookmaker. The Victorian Commission is prosecuting VenueNet for possession of an unauthorized betting instrument and of assisting the pub run in running a betting house. 

The Productivity Commission estimated the global turnover on Internet gambling to be $16.6 billion and the industry employs 145,000 worldwide. 

As with many nations, Australian gambling laws are ill-defined and essentially impossible to enforce, with only government-approved providers Tatts and Tabcorp currently allowed to provide online poker and sports betting to Australians. Many Australians play at offshore casinos which are unregulated and untaxed, and estimates figure $790 million was spent at foreign-based online casinos and sportsbooks in 2008 and spend over $1 billion in 2010.