Financial Counselling Australia welcomes Government’s reforms on online gambling – consumer protection is central focus

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28/04/2016

28th April 2016 - Financial Counselling Australia welcomes today’s announcement by the Federal Government to rein in online sports betting, putting consumer protection at the heart of its response.
We commend the government for its plan to introduce a national consumer protection framework within 12 months covering:

  • A national self-exclusion register for online gambling
  • A pre-commitment scheme, albeit a voluntary one
  • Regular financial statements so gamblers can see their losses
  • A ban on wagering companies offering credit
 
Financial counsellors will be relieved that the Government has decided not to legalise in-play betting. This is the single most significant harm prevention initiative in the package. In-play betting would have resulted in a massive expansion of the online betting market, and huge consumer losses and detriment.  

We are also pleased that the Government will stop online betting companies circumventing the current laws against in-play betting, by using  ‘click to call’  mechanisms. We urge the Government and all parties to introduce the enabling legislation as soon as possible. Given this development, the companies currently circumventing the law have a moral and ethical obligation stop the practice immediately, rather than waiting for law reform.

The introduction of a national self-exclusion register is also highly significant. Currently, people can self-exclude typically through a cumbersome paper based program with a single gambling company. The online register will mean that people wanting to take control of their gambling have a powerful tool. A person will be able to self-exclude once, and receive instant coverage for all online gambling companies  - similar to the Do Not Call register.

The Government has gone further than the O’Farrell Review recommendation and is banning lines of credit being offered for online betting altogether. In FCA’s Duds, Mugs and the A-List report: The Impact of Online Sports Betting, we documented how online gamblers were being offered thousands of dollars of credit by gambling companies, and the devastating impact it had on those families when these debts were enforced. This is a significant move. However, the Government has only included credit provided by gambling companies.

Financial counsellors see credit card debt and payday loans regularly being used to finance gambling with equally detrimental impact. We note “the Government will consult with the banks and credit card providers to assess the … payment blocking strategies to address illegal offshore wagering and gaming.” The logical extension is to include legal onshore gambling in this discussion.

“Racking up thousands of dollars on your credit card for gambling is a really dangerous practice, regardless of whether it is for illegal offshore gambling or for legal gambling. The same for payday loans. A debt is a debt when the debt collectors come knocking, and this happens really quickly,” said Ms Lauren Levin, FCA’s Director of Policy. “We’d encourage the Government to go that small step further and finish the job with credit gambling.”

Finally, we also welcome the announcement that the Government will strengthen the enforcement of the Interactive Gambling Act 2001 and deliver improved enforcement outcomes.

“The elephant in the room however is still advertising. We need a better plan. It cannot be self-regulated … we would welcome the staged approach of the tobacco model. Does anyone wish we had tobacco advertising back?

“That’s the next challenge and with an election looming, we think this needs to be on the agenda. Let the people decide,” said Ms Levin.
Finally, we urge the government to introduce a polluter pays model to fully fund the services that have to pick up the pieces, like financial counselling services, domestic violence services, gamblers help and consumer legal services.
 
 
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