Australia in the Midst of Major Gambling Overhaul

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Tuesday, July 5th, 2016 | Written by Shane Larson

Australia is in the midst of a major gaming reform, with the government vowing to crack down on many different types of gambling activities within the country of 23 million people. The Australian government has stated that it is motivated by a desire to fight gambling addiction and protect consumers from predatory or poorly managed sites, and as a result is currently instituting a series of regulations that could dramatically change the landscape of its gambling industry.

Now that the initial shock wave of the news has passed, companies are beginning to weigh their options and take action. Major international operator Ladbrokes is one of the companies leading the way, with the British-based betting company already discontinuing its in-play betting service. Meanwhile, the Australian gambling market is expected to come under more sustained pressure in the future if Senator Nick Xenophon’s (photo) party picks up the necessary amount of seats in Parliament.

Ladbrokes Nixes In-Play Betting

Until recently, Ladbrokes gave sports bettors the option to place bets on sporting events during the game using their smartphones. To place a bet, users just had to tap a button and place an automatic call to Ladbrokes. Under the new gambling regulations in place in Australia, this type of in-play betting is now illegal. In response to the government’s promise to crack down on operators that allow for in-play betting, Ladbrokes took the proactive step of discontinuing the service back in June. Ladbrokes is unlikely to suffer much due to the move, though, as it’s estimated that only 6 percent of their gross gambling revenue in Australia is generated by in-play bets.

Complying (But Not Without Protest)

Although the financial ramifications of ending in-play sports betting are unlikely to be very consequential for Ladbrokes, the company is still not content to just quietly discontinue the service. Representatives for Ladbrokes have been quite outspoken about the Australian government’s decision to make in-play betting illegal, with the company arguing that the government has made the move due to the influence of Australian land-based operators Tabcorp and Tatts Group.

These firms currently provide online sports betting services without in-play betting, and so Ladbrokes said it believes that they lobbied the government to put a stop to in-play sports betting in order to level the playing field against foreign licensed operators like Ladbrokes. In brief, Ladbrokes has called the new crackdown a show of favoritism toward Tabcorp and Tatts Group rather than something that is in the best interest of Australians.

Senator Xenophon has particularly focused on slot machines, known as pokies, during his crusade against the industry, and as Deutsche Bank’s sales desk commented recently:

“Pokies seem to be more on the agenda for Xenophon. This might even help wagering, as in, if less is bet on slots does that money go into wagering?”

The State of In-Play Betting in Australia

Ladbrokes may be the first sports book operator in Australia to discontinue their in-play betting service, but they will not be the last. Most foreign sports betting sites that provide services in Australia are licensed by the Northern Territory, which follows the directions of the Australian government regarding the ban on in-play betting. The government for the Northern Territory recently informed their four largest operators that they must stop providing live betting services on their websites and apps within 28 days or face penalties.

Overall, industry insiders do not believe that the ban on in-play betting in Australia will protect bettors. On the contrary, there seems to be a consensus that people who currently use in-play betting will simply seek out illegal offshore sites that will continue to provide the opportunity to bet mid-game.

Nick Xenophon’s Anti-Gambling Platform

The Australian gambling sector is expected to come under even more pressure in the future if the political party known as the Nick Xenophon Team (NXT) secures the necessary seats in the upcoming elections. According to ABC psephologist Antony Green, NXT has a “strong chance of winning lower house seats and three or four Senate seats” in Parliament, meaning the government might then need to canvass its support to push through policies.

NXT advocates a major overhaul of Australia’s gambling market, including limiting pokies to a maximum of $1 per spin, and a top loss rate of $120 per hour, versus its current level of $1200 an hour. Xenophon would also like to see illegal offshore gambling sites blocked from offering their services, and as he explains:

“Predatory gambling, costing the community up to $5 billion a year, is a massive issue where the major parties are beholden to the vested interests of the gambling lobby, shutting out the overwhelming community demand for real reform.”