Australia Abandons Regulation of Online Poker
Some regulatory developments out of Australia this morning have left the Australian poker community as frustrated as ever. The government Minister for Broadband, Communications and the Digital Economy, Sen. Stephen Conroy, opted not to implement a proposed framework for a trial of regulated online tournament poker. He has dropped the poker framework completely and instead has proposed a new consumer protection standard for all licensed online gambling activities.
Although poker is currently offered in Australia by offshore sites, it is not licensed or regulated.
Conroy’s recommendations came after an 18-month review of the effectiveness of Australia’s Interactive Gambling Act of 2001. IGA makes it illegal for online gambling operators to advertise or offer real-money online gambling to Australian residents. Sports betting through licensed operators and online lottery sales are excluded from the reach of IGA as licensed activities, although in-play sports bets are not allowed.
The Department of Broadband, Communications and the Digital Economy engaged Big Four auditing firm KPMG to review the size of the Australian online poker tournament market and online in-play market. KPMG estimated that the size of the poker tournament market alone could approach $360 million this year and grow to upwards of $563 million by 2021.
Despite that potential untapped tax stream, Conroy expressed concerns about table games and “the potential risk this may pose to children” in rejecting the recommendations to regulate the online poker market. He wants to implement a national consumer protection standard and will now seek input from state governors as to what that standard should be.
IGA has long put the online poker industry on thin ice in Australia. The Australian Crime Commission urged the Australian federal government to take action against offshore poker sites in 2011 after the U.S. Department of Justice unsealed its Black Friday federal cases against PokerStars, Full Tilt, and UB. The government has never done so.
IGA also puts licensed online sports betting sites and unlicensed online poker sites at odds. The sports betting sites, while grateful for the shield of legitimacy provided by the law, resent the fact that poker sites do not pay taxes to any Australian government and have pressed the government to correct that imbalance by either regulating online poker or enforcing IGA. Rumors have recurred several times in the last few years that offshore online poker operators like PokerStars and Full Tilt Poker were considering abandoning the Australian market due to these legal and regulatory concerns, but each time those rumors proved to be unfounded.
It’s currently unclear if Conroy’s final report will cause stepped-up enforcement of IGA or persuade online poker operators to finally pull up their tent stakes Down Under.
Australia, a nation of about 22 million, is roughly as populous as Romania and New York State. It has a passionate poker community, sparked in no small part due to Australian Joe Hachem’s win in the 2005 World Series of Poker Main Event. The country’s signature live poker event, the $10,000 Aussie Millions Main Event at Crown Casino in Melbourne, drew 629 players this year. The WSOP is making its first visit to the country next month for the “World Series of Poker – Asia Pacific”.