By staff
Vancouver, British Columbia, April 23, 2003 -- While conceding that Internet gambling is a “complex policy issue” for governments throughout the world, the Interactive Gaming Council is asking the federal government of Australia to step back from its efforts at prohibition and move toward a system of regulation that would better protect Australian consumers.

“Rather than allow the industry to continue in uncharted territory, regulation is needed to protect players, instill confidence and to potentially create a new revenue source,” the IGC says in a submission to the federal Department of Communications, Information Technology and the Arts.

Early in the development of this new form of gambling, Australian states and territories collaborated on what was known as the AUS Model, a system of stringent licensing and regulation of interactive gambling that included strong player protection mechanisms. The AUS Model was hailed worldwide as a progressive response to the challenges of online gambling.

But Australia’s federal government, reacting to concerns about the extent of land-based gambling in the country, passed the Interactive Gambling Act 2001 (IGA). This law prohibits the offering of interactive gambling to customers physically located in Australia. The law contains broad exclusions -- for lotteries, telephone betting, and online wagering on sports and horse and dog racing.

An ironic consequence of the law is that foreign players at Australian sites benefit from the protections of the AUS Model. But Australian casino players are permitted to gamble only at foreign sites, many of which follow policies that fall far short of the AUS Model.

The IGC responded this week to the government’s call for submissions as part of its legally required review of the IGA. In that call, the government said that from Jan. 11, 2002, through Dec. 31, 2002, it had received 13 complaints about Internet gambling content.

“While specific numbers are not available,” the IGC says in its submission, “it would be interesting to note the number of complaints received for the same period in regard to land-based casinos, gaming machines, Keno, Lotteries, not to mention the IGA exempted wagering and sports betting. It is suggested that the number of complaints in all of these forms of gambling would far exceed 13.”

Furthermore, research commissioned by the Australian Casino Association shows that the IGA has failed to curb casino-type gambling on the Internet. The association’s Chris Downy said that more than 40 percent of Australians who gamble online are visiting offshore sites, “which are clearly not subject to the same stringent regulation as Australian licensed operators.”

The IGC argues that the Internet is simply a means of distribution of the gambling product. So if gambling is legal, as it is in Australia, “the means of distribution should not affect the lawfulness.”

Unlike most land-based gambling, the means of distribution in the Internet industry utilizes constantly improving technology, a ready medium for developing tools to better assist with identifying and acting on social issues. For example, “computer technology provides an opportunity to identify patterns of behavior that may lead to problem gambling, and offer intervention when necessary,” the IGC says in its submission.

The IGC notes that, even with the advantage of having the player physically present, land-based casinos are not 100 percent effective in keeping minors from gambling. But with tools such as data cross checks, biometrics and geo-positioning and age verification software, Internet casinos such as the MGM Mirage site on the Isle of Man are able to prevent access by minors and by people from jurisdictions where such gambling is illegal.

Critics have raised the specter of money laundering through online gambling web sites. But here too, technology is on the side of sound public policy. The IGC says: “Money laundering, however, inherently depends upon stealth. Online gaming could be one of the most watched and monitored forms of e-commerce – by licensing jurisdictions, financial institutions and various others – not to mention that, unlike land-based gaming, cash is not used in transactions.”

Stating that “Prohibition will in fact drive the industry underground,” the IGC urges Australian officials to follow the lead of the United Kingdom, which is moving toward the legalization and regulation of online gambling by British-based operators. Australia’s inconsistency is highlighted by the fact that Australian jurisdictions have a proven track record internationally as leading regulatory bodies.

The IGC’s submission to the Department of Communications, Information Technology and the Arts is in keeping with its policy of working with regulators and other governmental authorities worldwide to facilitate the development of a highly regulated, responsible interactive gambling industry. Last year, the IGC submitted a paper to the Financial Action Task Force regarding efforts to combat money laundering. IGC representatives have also met with officials from the U.S. Federal Trade Commission to discuss the prevention of minors from gambling online.

The IGC has previously submitted written testimony on the regulation of Internet gambling to the United Kingdom, New Zealand, United States Congress and various U.S. state legislatures, including Nevada and New Jersey.

The IGC’s complete submission to the Department of Communications, Information Technology and the Arts is posted on our web site, www.igcouncil.org.

About the IGC

Formed in 1996, the IGC is the leading trade association for the international interactive gambling industry with its membership operating or supplying services to most of the reputable interactive sites on the World Wide Web. Based in Vancouver, Canada, the IGC champions fair and honest interactive gambling environments. To help parents protect their children, IGC members are encouraged to participate in the self-labeling system of the Internet Content Rating Association. The IGC has developed a Code of Conduct for members, and a program called Helping Hand to assist problem gamblers.

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