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Internet betting companies claim government regulations inhibit competition

Tuesday, November 8, 2011 : Major internet betting companies claim government regulations inhibit competition with offshore rivals and are ineffective in protecting players
Top internet betting companies in Australia have complained that the country's online betting laws prevent them from effectively competing with rivals operating from offshore, and have called for a more realistic approach to regulation.
The suggestions for improvement were made by companies like Sportsbet and Betfair in submissions to the federal government’s review of the Interactive Gambling Act 2001, reports the publication Computerworld.
Sportsbet claimed the regulations should be amended to allow Australian-based websites to offer “in-the-run” betting - the placing of bets once an event has commenced.
“Betting after an event has commenced is available over the phone and in retail outlets in Australia,” the submission reads. “With Australian-based websites prohibited from offering betting in the run in online, Australians are choosing to place bets through unregulated overseas websites.”
Sportsbet argues that the issue is distinct from that of the broader online gaming debate, and that it is simply an issue of platform neutrality, as this form of betting already exists over the phone and in TAB retail outlets.
“Sportsbet urges government to address this issue as a matter of urgency and allow betting in the run online with Australian registered wagering operators.
“This would achieve the stated goal of platform neutrality, remove a major disadvantage to licensed Australian online wagering operators and allow Australian consumers to bet in the run safely,” the Sportsbet submission concludes.
Betfair is also pushing for the removal of the restrictions around online in-play betting, and those on online interactive games. The company suggests that sensible and practical regulation would more effectively manage issues like responsible gambling and integrity in sport.
“Further, Australian consumers of these services would be afforded enhanced consumer protection, tax revenues would remain in Australia and can be used to fund problem gambling programs and research projects, and Australian operators will be able to compete with offshore gambling operators on an even playing field," the company claims.
“One key reason that the IGA is presently ineffective is that it failed to regulate services, and instead focused on the methods by which those services are delivered (e.g. telephone, internet) and therefore became antiquated on a rapid basis,” the Betfair brief argues.
Sportsbet appears to agree that the IGA has been largely ineffective, suggesting that the Act -  which prohibits Australian-based websites offering online gaming - has not reduced problem gambling as Australians continue to spend in the order of A$1 billion annually on online gaming through unregulated offshore sites.
Tabcorp's submission appears to agree with its rivals, suggesting that changes in the approach to online gambling need to be made so that Australians are not forced to bet with offshore operators.
“This will also enable domestic operators to compete on a level playing field where player protection standards can be assured,” the company notes, adding that a national code of conduct for wagering and sports betting should be established to cover marketing, credit betting, the offering of financial inducements to open an account and to convey messages of responsible gambling and self-exclusion.
The Internet Industry Association has also joined the Australian conversation on internet gambling, saying that online problem gambling should be tackled at the PC and smartphone level, and cautioning against placing the onus for protecting problem gamblers on internet service providers.
Instead, the Association suggests, problem gambling should be managed at the point of service access.
In its submission to the government on the IGA, the trade association asserts that the prohibition of online gambling sites and applications was ineffective, given the availability of alternative offshore services.
“The IIA believes that the point of consumption, that is, the end user's device, is the only effective and technically feasible way of controlling access to content on the Internet,” the submission reads, arguing against “ineffective and unrealistic" government attempts to compel internet service providers to block content that government finds unacceptable under the Act.
The Association cites problems with the high volume of users, the vast amounts of data users can access, the wide ranging nature of the prohibitions under the Act, and the high costs that proposed ISP blocking would impose.
“In particular ISPs are given a gatekeeper role and are required to give effect to the Act’s ‘designated notification scheme’ upon receiving notification from the ACMA,” the submission reads, objecting to these responsibilities being thrust upon the industry, and instead advocating that a regulated online gambling licensing model with strict requirements on licensees was a better course for government to follow.
The call for submissions on the Interactive Gambling Act 2001 was made in August this year. The government's review was to include investigating the growth of online gambling and the impact on internet gambling services in Australia of smartphones, together with the convergence of new and existing technologies.

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