Betting against Australian bookies

Australians gamble more per capita than any other country in the world – and lose more too – so it's no surprise that our gaming industry is getting flustered about the rivers of money flowing to the online black market.

Tabcorp's Paula Dwyer today called on the federal government to ban unlicensed offshore bookies from taking bets from Australian residents. It follows reports that local players in the industry are pushing for changes to the current gambling laws that favour offshore bookies over local operators.

There's been much talk about the government's inaction on this front, and the lobbying is intensifying. The staggering growth in online gaming has something to do with the increased attention it's getting from the industry.

Productivity Commission estimates from 2010 put the amount lost to black market offshore operators at $1 billion. But with Australia's online betting market growing at about 15 per cent a year, that figure is likely even higher now.

In response to Dwyer's comments, the Australian Wagering Council's CEO Chris Downy said banning these offshore bookies is a step in the right direction but just one of a number of reforms that need to be made to the Interactive Gambling Act.

For some reason, the Abbott government seems loath to address the issue, although Dwyer confirmed that Tabcorp is in talks with the government about it.

One of the gaming industry's main arguments is that offshore operators pay no fees or taxes in Australia and don't care about responsible gambling or harm minimisation for clients, though critics and addicts would surely argue the industry as a whole isn't too caught up with “responsible gambling” or “harm minimisation”.

Still, punters are taking more risk by using unlicensed bookies. Tabcorp estimates that about 14 per cent of betting by Australian-based customers is through operators not licensed in Australia. And since these bookies aren't regulated, in Australia at least, consumers are taking a punt that they'll get paid their winnings. It's a bet that doesn't always pay off.

Offshore bookmaker Betjeck is a prime example. The company is based in tax haven Vanuatu, but has an Australian call centre located on the Gold Coast. It's currently being investigated for allegedly failing to pay punters their winnings.

One problem is that while the 2001 Interactive Gambling Act prohibits companies from offering or advertising online gambling services, punters can sign up and gamble with foreign companies that accept Australian players.

The Act also allows sports betting online, but bets must be placed before the event begins. Offshore companies on the other hand, offer players the option of online in-play betting, putting our own operators at a disadvantage.

The rise of unlicensed offshore operators is a trend the gaming industry wants to see reversed – and quickly. Indeed, while Australians are big gamblers, we're not so great at keeping up with our peers when it comes to regulating the industry.

Unlicensed offshore bookies have been banned from taking bets from French residents since 2010, while a new Act will this week come into force in the UK that will force overseas gambling operators serving Britain to get a license from its Gambling Commission. In contrast, our government has done very little to plug the loopholes in our outdated laws.

While critics of gambling would like to nothing more than to see online gambling banned (even Tony Abbott thought so, once upon a time), there's really no excuse for Australia to be so far behind its peers in targeting the vultures who increasingly see Australians as prime prey.