BUSINESS

A Look at iGaming in Australia

TAGs: Australia, Lorien Pilling

igaming-australia-online-gamblingWhen it comes to the largest iGaming target markets, the UK is generally recognised as the largest well-regulated country. There are then plenty of arguments to be had for promoting the benefits of riskier regions such as the US and large parts of Asia. Latin America and other areas of continental Europe are even starting to grab the attention of the iGaming industry as emerging markets.

But one area that remains relatively unmentioned is Australia. Strange, given that the country has a population of 22 million, many of which are regarded as having a high propensity to gamble.

In their ignorance, some may claim that the Australian iGaming market is yet to mature, a claim which is very much unfounded.

Lorien Pilling of Global Betting and Gambling Consultants (GBGC) explains that iGaming in Australia has been present for just as long as anywhere else. She says: “In some respects the Australian market is well established. Some of the first sportsbooks got their licenses back in the mid-90’s”.

“iGaming firms have long been targeting Australia as a market from their offshore bases. Poker and casino services are already popular on the gaming front, and, of course, a culture of sports betting is well-established too.”

Perhaps the most notable of the first sportsbooks to get involved in Oz is Centrebet who gained a license from Northern Territory in 1996. Centrebet therefore has a wealth of expertise in this market and Sportingbet’s takeover of the company in May can be viewed as a very shrewd move.

But Sportingbet isn’t the only major iGaming company to have recognised the potential down under. Pilling adds: “European-based firms are taking more interest in Australia, with a few deals going through in the last couple of years.”

Paddy Power got hold of its piece of the pie in 2009 by buying 51% of Sportsbet, an international company with a strong presence in Australia. The remaining 49% soon followed on the path to the Irish bookmakers in December 2010 – a clear indication that Paddy was pleased with what they saw in the land down under.

So the market obviously has potential and their very few internationally recognised iGaming companies operating in the country. Basically it seems like a sure thing – until the unfortunate subject of regulation is considered.

The Interactive Gambling Act was introduced in 2001 by the government (called the Commonwealth in Australia). It determines the provision of interactive gambling services to anyone in Australia as illegal and demands that internet service providers block offshore gaming sites. An interesting tell-tale system was also set up which allows consumers to report gambling sites deemed as illegal to a regulatory authority.

But thankfully, Australia’s current legislation isn’t all bad. Sports betting, including horse and greyhound racing, is fully regulated throughout the country with individual states able to add their own stipulations where they deem necessary.

Some have taken advantage of this and a state vs Federal situation similar to that of the US has appeared. In the case of Australia, the state’s are bound to have the backing of iGaming companies as rather than prohibiting iGaming outright, they prefer to regulate by using ‘enabling schemes’.

GBGC lists Queensland’s Interactive Gambling Act 1998 and Northern Territory’s Gaming Control Regulations 1998 as to examples of these schemes that have helped iGaming companies to operate in the state. Both had an emphasis on player protection and were set up with the enlightening idea that regulating will be more effective than prohibiting – if only more legislators would see it this way.

But if you were thinking that the Australian market is for sports betting only, you’re very much mistaken. GBGC assures us that casino games, poker and other igaming products are popular throughout the country, despite their illegality. Similarly to the US before Black Friday, no action has been brought against international operators targeting the country and hopefully this lack of action will remain.

Poker in particular is gaining in popularity thanks to the Asia Pacific Poker Tour hosting tournaments there and the success of WSOP Main Event winner Joe Hachem.

The recent popularity of iGaming in the country has been helped by the ease at which gambling companies are able to advertise. Sponsorship of broadcasts, sports teams and poker events is widespread – strange given the country’s stance on online gambling.

But this is a hypocrisy that has recently come to the attention of politicians who are worried that common gambling advertising will encourage children to gamble. This issue gained more exposure recently when the MCG Trust announced that their advertising contract with Betfair would not be renewed.

This came at around the same time that a review of Australia’s current interactive gambling act was ordered. The review may take a firmer stance on iGaming advertising. In light of this, Pilling of GBGC explains: “There will be strong concerns about responsible gambling and any licensing regime will likely have heavy emphasis on this area and protecting Australian players.”

But Pilling also notes that the review could fully open the door for iGaming in Australia. She adds: “If the authorities do introduce a domestic licensing regime and allow online gambling activities it would provide a further boost to the sector.

While there are risks in the market, iGaming in Austalia certainly shows no signs of decreasing in popularity. Pilling concludes: “The Australian economy has performed better than most in recent years and combined with a propensity to gamble and the possibility of new regulation, Australia is a key battle ground for operators.”

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