Rich Hawkins and Tom Macken explain the new regulations governing online gambling in Victoria - the first state to implement Australia's new consumer protection framework.

On 26 November last year, the Federal, state and territory governments of Australia agreed to implement a raft of new consumer protection measures aimed at reducing the harm caused by online wagering, particularly wagering on sports. It was agreed that these measures, which are set out in the new National Consumer Protection Framework for Online Wagering (NCPF) would be implemented progressively in each state and territory over a period of 18 months.

Last week, Victoria became the first Australian state to introduce these new measures when the Victorian Minister for Gaming and Liquor Regulation exercised her power under Victoria’s Gambling Regulation Act 2003 to issue a harm minimisation directive to wagering service providers in Victoria. The Directive requires such providers to comply with a number of measures (based upon those contained in the NCPF) which are designed to empower online gambling customers to take more control of their gambling practices and to prohibit conduct that is likely to entice or encourage problematic gambling behaviour.

Summary of the measures

The measures contained in the Directive which came into effect on 26 May 2019 include:

• prohibitions on the offering of credit, vouchers or other rewards as an incentive to refer family or friends to open a betting account;
• prohibitions on the offering of complimentary or free bets unless the winnings can be withdrawn by the customer (i.e. operators are no longer allowed to hand out ‘free bets’ which require customers to continue to gamble with the winnings);
• prohibitions on the sending of direct marketing to customers unless the customer has opted-in to receive such direct material;
• a voluntary opt-out pre-commitment scheme to allow customers to set to their own gambling deposit limits when they open a betting account; and
• simplified and clearer account closure procedures for customers.

The other measures contained in the Directive which will come into effect on 26 May next year will require wagering service providers to:

• provide activity statements to customers to allow them to manage their own online wagering expenditure and behaviour;
• provide customers with their betting account history when requested to do so and at no cost;
• display consistent gambling messaging which highlights the risks and potential of harm of gambling to be used by operators in their advertising, direct marketing, websites and other direct communications to customers; and
• ensure that all relevant staff involved in the provision of wagering services complete responsible service of interactive wagering and betting training.

There are a number of other measures which are contained in the NCPF but have not been included in the Directive because they are already in operation. These include prohibitions on the provision of lines of credit to customers and restrictions on payday lending, which were introduced as part of the suite of changes brought about by the enactment by the Federal Government of the Interactive Gambling Amendment Act 2017 (Cth) in 2018.

The other key measure contained in the NCPF which has not been included in the Directive is the implementation of a national self-exclusion register for those experiencing gambling harm. It is expected that this measure will be introduced at a Federal level through an amendment to the Interactive Gambling Act 2001 (Cth) by 26 May 2020.

Will the NCPF measures be effective?

Concerns have been raised by anti-gambling advocacy groups that the new measures will not adequately tackle the issue of problem gambling in Australian society. The cynical view is that they have been supported by the gambling industry as they reduce the likelihood of other more effective forms of regulation being introduced.

A key concern is that problem gamblers with existing accounts are unlikely to change their gambling patterns and behaviours because the gambling companies are already too well entrenched in their lives. On the other hand, the changes might result in a decrease in the level of gambling-related harm for new customers who may now be harder for the gambling companies to entice.

It has also been argued that, in order to be effective, these new measures need to be accompanied by more robust regulation of gambling advertising. It has been reported that gambling companies spent over $300m on advertising in Australia last year.  This figure has grown year on year since 2011 when it was $90m, suggesting that the restrictions on gambling advertising introduced in Australia during this period have not been effective.

What’s next?

It is expected that the other Australian states and territories will follow Victoria’s lead in formally implementing the measures contained in the NCPF. As the NCPF only prescribes minimum standards, it is open to those other states and territories to adopt more onerous harm minimisation measures than those which have been introduced in Victoria.

NSW, the most populous state in Australia, may well be the ‘next cab off the rank’ with Liquor & Gaming NSW having recently staked a proud claim to having the nation’s harshest rules on gambling inducements.

Notwithstanding any possible shortcomings, once implemented by all states and territories, the NCPF will represent a significant development in relation to the regulation of online gambling in Australia.