Jamie Nettleton and Samuel Gauci of Addisons take a look at how the gambling sector in Australia has been affected by Covid-19 and outline how the industry is reopening for business.This year has seen countries around the world considering how best to address the challenges posed by the novel coronavirus (Covid-19) and how to reduce the effect the pandemic has on their national economies.
Australia’s gambling operators, both online and land-based, have not been immune to these challenges and have had to adapt to changing trading conditions and be creative in adopting new measures that permit them to reopen their businesses.
The land-based market was directly affected by the health measures introduced to limit the spread of the virus. Casinos and other gambling venues where poker machines are available (clubs and pubs) had to close their doors towards the end of March to comply with government restrictions.
This measure inevitably had a large negative impact on these businesses and their employees, with a substantial number of employees being stood down.
The only land-based gambling product that remained available in Australia was lotteries, as tickets can be purchased from newsagents and these were permitted to remain open.
The Australian-licensed online sports bookmakers were also negatively affected. The suspension or cancellation of almost all sporting events, with only limited racing events continuing to be provided, caused these bookmakers to be materially affected.
This saw the industry providing novel gambling products and focusing on sporting events that were not key events prior to Covid-19, such as table tennis, the Moldovan football league and esports.
Ultimately, Covid-19 generally had a material adverse effect on the Australian licensed gambling market and the industry will take a number of years to recover from this pandemic and return to pre-Covid-19 operations. This effect has been exacerbated by the more recent lockdown in Victoria, which has led to all gambling venues to remaining closed.
Rise in illegal online gambling
As is the case is many other jurisdictions, in Australia many residents are attracted to the offerings of illegal online gambling providers, which are continuously finding innovative techniques to attract customers and make their services available.
Gambling is a form of entertainment and, especially during the self-isolation and lockdown periods brought about by Covid-19, many people turned to online gambling. Customers are not always aware that operators providing online casino games or sports betting services may not be legal in Australia and are therefore unaware of the risks associated with playing with illegal online gambling operators.
Data from AlphaBeta showed that there was a significant increase in online gambling by Australians during the period from March to July 2020. Considering Australian licensed sportsbooks were limited in the services that they could provide, it would appear that this increase occurred as a result of more people playing on illegal websites.
Furthermore, a Sydney Morning Herald report based on SEMrush data claimed that there was an increase in the number of online searches for terms such as “online pokies”, “online casino Australia real money”, and “Australian online casino reviews”, which suggests that an increasing number of Australians were playing on illegal online gambling sites.
The Australian Communications and Media Authority (ACMA), which is responsible for the enforcement of the Interactive Gambling Act 2001 (IGA) – the Federal law regulating the provision of online gambling in Australia – has increased its monitoring activities in respect of illegal websites and the use of its enforcement tools during this period.
A key enforcement tool ACMA began adopting from November 2019 is the blocking of illegal online gambling websites by internet service providers. ISP blocking is just one of the measures and powers available to the ACMA under the IGA, however, it appears to be one of the most timely and effective.
In May ACMA reported that it had blocked 35 illegal gambling websites since it commenced using the ISP blocking measure.
Gradual reopening
Up to the beginning of July, there had been a gradual reopening of gambling operations in Australia. In the land-based sector, thanks to the effective handling of the pandemic, casinos have started to open their doors again in most Australian states and territories, as have clubs and pubs that host poker machines.
New South Wales was the first state to permit these outlets to reopen and switch on their poker machines, with other states and territories following suit. The only exception is Victoria where, unfortunately, there has been a recent increase in Covid-19 cases and plans to reopen land-based gambling services have been further postponed.
Venues must comply with the social distancing requirements of the state or territory where they are located, therefore many venues are operating at reduced capacity. Measures adopted include a reduction in the number of people who are permitted in gambling areas, providing more space between poker machines and/or keeping a number of poker machines switched off.
Some regulators have permitted gambling venues to increase their approved gambling areas to allow them to have more poker machines operational and also remain compliant with health and social distancing requirements.
In the licensed online sports betting sector, operations are returning to normal with the restarting of sporting competitions both in Australia and internationally.
However, there has been quite a change in the timetables of competitions from what was originally planned for 2020. This will require operators to dedicate more resources to efficiently providing odds on sporting events in the shortened period the leagues and seasons have to be completed, as is the case with the AFL (Australian Football League) and the NRL (National Rugby League).
Social casino under fire again
On 10 June 2020, a Private Member’s Bill, the Interactive Gambling Amendment (Banning Social Casinos and Other Measures) Bill 2020 (the Bill), was tabled by Andrew Wilkie MP in the Australian Federal Parliament. This Bill proposes amendments to the IGA and seeks to ban online social casino games.
The Bill was presented as a result of the trends that have emerged during Covid-19. As explained in the explanatory memorandum that accompanies the Bill, there has been an increase in online gambling in Australia and also an increase in people playing online social casino games.
It is contended in the explanatory memorandum that online social casino games are particularly problematic because they attract new gamblers, including children.
The Bill defines an online social casino game service as comprising the following elements:
- a game played for virtual currency; and
- the game is a game of chance or of mixed chance and skill; and
- a customer of the service gives or agrees to give consideration to play; and
- a game is played on an interactive platform.
The Bill includes other details such as the proposed penalties for breaching these new provisions, granting powers to the ACMA, making the prohibition extraterritorial in its effects and establishing that regulations should be enacted.
A similar bill, tabled by then Senator Nick Xenophon (the Xenophon Bill), was considered by the Federal Parliament in 2013. Following the recommendations of a review report of the Joint Select Committee on Gambling Reforms, the Xenophon Bill was not passed.
In 2019, the Federal Government took a similar stance when it decided not to regulate video games and loot boxes because the Federal Government felt that there was not sufficient research into any gambling-related harm and that it could not develop a regulatory approach in the absence of such research.
Although we cannot determine the outcome of the current Bill, the Federal Government has a number of urgent and pressing matters to address. Furthermore, the position taken in respect of this issue previously indicates that the Federal Government is likely to adopt a similar approach again.
However, nothing relating to gambling-related issues can be predicted with certainty. The government’s position may be influenced by the recent report issued by the UK’s House of Lords Select Committee on the Social and Economic Impact of the Gambling Industry, which recommended changes to the regulation of games of chance and that loot boxes should be regulated as a game of chance.
Covid-19 has been challenging for the gambling industry globally and the situation has also been difficult in Australia, however, there are now some signs of a recovery and a return towards normal operations.
Jamie Nettleton is a partner at Addisons and head of its Gambling Law Group. He is the past President of the International Masters of Gaming Law (IMGL) and a senior fellow of the University of Melbourne, lecturing in gambling law.
Samuel Gauci is a solicitor admitted in Malta with a background in gambling law. His experience stems from roles with the Maltese regulator, the Malta Gaming Authority (MGA), and in private practice with a leading law firm in Malta and more recently with Addisons.
