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Second Reading Speech: Interactive Gambling Amendment (Lottery Betting) Bill 2018
Traditional lotteries and keno games are popular and longstanding recreational gambling products that form an important income stream for thousands of small businesses across Australia, including newsagents, pharmacies, pubs, RSLs and community clubs. They provide millions of dollars in tax revenue to every state and territory in Australia and help fund important services and infrastructure for the community, such as hospitals, schools, public transport and roads.
Every time a customer buys a ticket in an official lottery draw, a percentage of the ticket price goes towards supporting community services and small-business owners. Official lotteries and keno games have been a feature of the Australian gambling product landscape for a long time, and are well understood and accepted by consumers.
In contrast, lottery and keno betting services are relatively new. They provide little taxation revenue and no benefits to the thousands of small-business owners across Australia. Furthermore, with the light regulation imposed on these services, they can entice customers away from traditional lotteries and keno games which further impacts the benefits to the community and small business.
Many Australians have voiced their concerns about the emergence of lottery and keno betting services. The government has carefully considered these concerns.
Last year, the Minister for Communications raised these concerns with the responsible minister in the Northern Territory, which so far is the only jurisdiction to license lottery betting. The Northern Territory government responded by introducing a partial prohibition on lottery betting, such that betting could not be offered on Australian lotteries. Whilst this was a positive step, the Australian government believes stronger and more comprehensive action is required.
The Interactive Gambling Amendment Bill 2018 will amend the Interactive Gambling Act 2001 to prohibit the provision of lottery and keno betting services to Australians.
State tax and small-business revenue
Traditional lotteries are heavily regulated and pay a considerable amount of tax to all states and territories. For every lottery ticket sold, up to 28 per cent is allocated to state and territory taxes to support regulatory oversight and government services, whilst up to nine per cent is paid to agents for relevant sales costs and income requirements.
In 2016-17, it was estimated that official lotteries paid $1.1 billion in state and territory taxes.
Over $350 million is earnt by some 4,000 newsagencies and official lottery agents across Australia from sales of official lottery products. Newsagents rely on this money to run their businesses. Traditional keno services conducted in clubs and hotels across Australia help support community services and sporting initiatives.
In comparison, lottery and keno betting services contribute significantly less tax and only to one jurisdiction in Australia. They do not pay any commissions to small businesses. It is clear that a shift away from official lotteries will have a negative impact on state taxation revenue and small business.
Traditional lotteries are built on guaranteed prize pools from ticket sales and are required to comply with strict audit and consumer protection measures. Unlike official lotteries, lottery betting services are not required to comply with the guaranteed prize pool model—instead, their major prizes are covered by insurance policies. This allows lottery betting service providers to offer bigger prizes more frequently which further impacts on the financial benefits of traditional lotteries.
The intent of the Interactive Gambling Act is to minimise the scope of problem gambling in Australia by limiting the types of interactive gambling services to Australians. Lottery betting services allow consumers to bet on the outcome of up to 25 lottery draws being conducted around the world each week, with the promise of massive jackpots ranging in the hundreds of millions, which could lead to problem and at-risk gambling.
This bill will prohibit the provision of lottery and keno betting services to customers physically present in Australia. It will also prohibit the betting on a 'contingency that may or may not happen in the course of the conduct of a lottery' to ensure that bets cannot be accepted on the outcome, or any aspect, of a lottery or keno draw.
Nationally consistent regulation
The Commonwealth is responsible for online gambling matters and is best placed to implement a national position in relation to lottery betting services in Australia. This is consistent with the important work being done to establish the National Consumer Protection Framework, which aims to standardise harm minimisation controls for wagering services across all states and territories.
These amendments to the Interactive Gambling Act will also enable the Australian Communications and Media Authority (ACMA) to enforce compliance, and respond to any complaints about lottery betting services being provided by other Australian or international operators. The government recently expanded ACMA's powers to take stronger action against the provision of illegal interactive gambling services to Australians.
Many Australians enjoy lotteries and keno as a recreational activity, and the government is committed to ensuring online gambling takes place under a robust legislative framework with strong consumer protections and within the boundaries of community standards.
I commend this bill to the House.