Big step forward for consumer protection in online gambling

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30/11/2016

29 November 2016:
Financial Counselling Australia welcomes the pledge from the State, Territories and Federal Government to establish a strong consumer protection framework for online gambling.

“We congratulate Minister Alan Tudge in developing this framework in a consultative way and for doing it quickly. Although there is still a lot of detail to work out, the principles are absolutely right,” said Ms Lauren Levin, Director Campaigns and Policy.
“Real, meaningful reform can’t come quickly enough for all the people who present to financial counsellors with ruined lives. We get calls daily from people with complex gambling debt, and from very distressed parents and family members.”
On Friday, all the State and Territory Ministers together with Federal Minister for Human Services, Hon. Alan Tudge agreed to establish a "National Consumer Protection Framework" for online gambling.  This meeting achieved in-principle agreement, and a working group has been established to meet early next year to work out the detail.
We believe that the framework contains substantial measures that will prevent significant harm, if fully implemented. The most substantial commitments are:
  • prohibiting lines of credit being offered by online wagering providers. Gambling and credit do not go together and this will stop a lot of harm. People currently don't even have to ask for credit, often they're given the credit "just in case". We need this reform implemented urgently. (This reform doesn't cover credit provided by banks and payday lenders, only by online gambling operators - see later)
  • a national self-exclusion register. The aim is for people to be able to press one button and self-exclude from all online operators, but to have the choice to select the duration that the person is most comfortable with -- ranging from an initial 'take a break' to a long-term ban
  • voluntary, opt-out pre-commitment -- all online gambling companies will have to offer their customers the ability to easily set self-protection limits around their gambling. The rub is 'what happens when that limit is reached'. Will an addicted gambler be allowed to chase losses and tear down the protection they set up, or will their original 'rationally set limit' be honoured as a firm protective barrier?
  • online gambling operators having to provide regular financial activity statements. At the moment most people can't tell financial counsellors what they have spent or lost (or even won for the few who win occasionally). Most of the companies don't make this information readily available for obvious reasons - it would be confronting to their customers to see how much they've lost. Gambling operators will have to provide this 'bottom line' -- this is a good thing.
  • discouraging links between payday lenders and online gambling operators. When gambling operators are prohibited from providing credit, they will look for money from other sources. Many people with gambling debts already present with payday loans and these high cost products are not good news for a struggling consumer's budget.
Other commitments with less detail are:
  • more consistent responsible gambling messaging and gambling counselling advice across the nation
  • staff training in the responsible conduct of gambling through a government approved provider
  • reducing the current 90 day verification period before a person can open a wagering account
  • greater national consistency in advertising of online wagering services
  • a harmonised regulatory regime to ensure the offering of inducements are consistent with responsible gambling.
What's missing?
Gambling advertising is out of control and the cause of widespread community concern. The only way for this to be addressed will be through government regulation.
The other significant issue is credit cards financing gambling. Some people use their credit cards to fund online gambling, ending up with huge debts. This could be fixed through either legislation or voluntarily by the banks changing their systems to stop these transfer. Some banks already do this and there is no reason why all banks could not.
 
Other important developments
The US election overshadowed a really important piece of regulation – recently the Government introduced amendments to the Interactive Gambling Act 2001 to clearly prohibit in-play betting, and give the regulator, ACMA greater powers. Both of these changes will have profound impacts.
 
Background
FCA’s August report “Duds, Mugs and the A-List—a report into the impact of uncontrolled sports betting” outlined serious and unethical practices in the online sports betting industry, particularly around credit and gambler grooming. Two weeks later, the Government announced a review into the Interactive Gambling Act.
 
MEDIA CONTACT: Lauren Levin, 0411 050 035
lauren.levin@financialcounsellingaustralia.org.au