1998 - 1999 - 2000

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

SENATE

INTERACTIVE GAMBLING (MORATORIUM) BILL 2000

SUPPLEMENTARY EXPLANATORY MEMORANDUM

Amendments to be moved on behalf of the Government

(Circulated by the authority of the Minister for Communications, Information Technology and the Arts, Senator the Hon. Richard Alston)

ISBN:  0642 463662

AMENDMENTS TO THE INTERACTIVE GAMBLING (MORATORIUM) BILL 2000 

OUTLINE

The Interactive Gambling (Moratorium) Bill 2000 (the Bill) proposes to impose a 12-month moratorium on the development of the interactive gambling industry in Australia by creating a new criminal offence, the provision of an interactive gambling service.  The new offence prohibits a person from providing an interactive gambling service unless the person was already providing the service when the moratorium commenced on 19 May 2000.  Consistent with the Government’s decision to impose a moratorium for twelve months, the offence ceases to have effect at midnight on 18 May 2001.

The Bill provides a definition of what an interactive gambling service is.  An interactive gambling service has four essential elements:
•	the service is a gambling service; and
•	the service is provided in the course of carrying on a business; and
•	the service is provided to customers using any of the following communications services:
-	an Internet carriage service or any other listed carriage service; or
-	a broadcasting service or any other content service; or
-	a datacasting service provided under a datacasting licence; and
•	the service is linked in a specified way to Australia.

The Bill specifically excludes from the definition of interactive gambling service services for telephone betting; services relating to the entering into of contracts that, under the Corporations Law, are exempt from a law relating to gaming or wagering; and services that the Minister determines are exempt services.   Consequently these services are not subject to the moratorium.

The proposed amendments exclude an additional category of services from the definition of interactive gambling services, namely certain types of wagering services.  The effect of these amendments is that certain types of wagering services are excluded from the moratorium.  The amendments specifically provide that services relating to betting on a horse race, harness race, greyhound race or sporting event or series of these races and events, and betting on any other event, series of events, or contingencies, are excluded services for the purposes of the moratorium.  

However, wagering services relating to a sporting event after the event has begun, will not be excluded from the moratorium.  They will still be subject to the moratorium.   These services go beyond a mere extension of the existing telephone betting services, and potentially provide for rapid continuous betting, which could be highly addictive and therefore undesirable. 

These amendments are proposed to address concerns raised in the course of the debate of the Interactive Gambling (Moratorium) Bill.

FINANCIAL IMPACT STATEMENT

The proposed amendments will not have any significant impact on Commonwealth expenditure or revenue.  Enforcement costs are expected to be minimal.

 
NOTES ON AMENDMENTS

INTERACTIVE GAMBLING (MORATORIUM) BILL 2000 

Amendment (1) – clause 5 – exemption of certain wagering services

This amendment inserts new paragraphs 5(3)(aa) and 5(3)(ab).  The effect of this amendment is to exclude certain wagering services from the moratorium, by providing that they are not an interactive gambling service for the purpose of the Interactive Gambling (Moratorium) Bill. 

The excluded interactive wagering services are in effect little more than an extension of existing telephone betting services, which are currently excluded from the moratorium (see paragraph 5(3)(a) of the Bill).  This amendment has been included to address the concerns raised during the course of debate on this Bill.

Proposed new paragraph 5(3)(aa) specifically excludes a service that relates to betting on a horse race, harness race, greyhound race or a sporting event, or series of these races or sporting events, from the meaning of interactive gambling service.  ‘Sporting event’ is to be given its ordinary meaning.  

While the effect of proposed new paragraph 5(3)(aa) is to exclude certain wagering services from the moratorium, proposed new subclause 5(3A) limits the wagering exclusion so as not to cover certain wagering services on sporting events after the event has begun (see discussion below at Amendment (2)).

Proposed new paragraph 5(3)(ab) ensures that other wagering services which relate to betting on an event, a series of events, or a contingency are not subject to the moratorium.  It provides that they are also excluded services for the purposes of the Interactive Gambling (Moratorium) Bill.  

While the most common forms of wagering relate to betting on a sporting event or horse race, a wager includes a bet on any outcome or event.  For example, a service relating to betting on the weather for a particular day, or betting on an election result, would be a wagering service and would be excluded from the moratorium by proposed new paragraph 5(3)(ab).

It is intended that a service that introduces individuals who wish to make or place bets to individuals who are willing to receive or accept bets on the events or contingencies specified in paragraphs 5(3)(aa) and (ab) would also be covered by the exclusion, and not be subject to the moratorium.  Such a service would be a ‘service that relates to betting’ on these events or contingencies. 

Wagering services are different to gaming services.  Wagering is focused on a bet on an event, a series of events or a contingency while gaming is focused on playing games of chance for money or something else of value.  In a wager, the bettor usually does not participate in the actual event or contingency.  In contrast, interactive gaming involves the bettor in the game.

Proposed new paragraph 5(3)(ab) distinguishes an ‘event’ from a ‘series of events’.  This is consistent with the anti-hoarding provisions in Part 10A of the Broadcasting Services Act 1992, which also distinguish between ‘events’ and a ‘series of events’.

The distinction between an ‘event’ and a ‘series of an events’ can be explained by way of example.  For example, in the case of the game of cricket, the ‘event’ would be characterised as a single cricket match.  However, the test series would be characterised as a ‘series of events’.  In the game of tennis, an individual tennis match would be an ‘event’.  However a tennis tournament, such as the Australian Open, would be characterised as a ‘series of events’.  

Wagering services on either an ‘event’ or a ‘series or events’ is excluded from the moratorium by proposed new paragraph 5(3)(ab).  However this exclusion is limited by proposed new subclause 5(3A) which provides that the moratorium will cover wagering services on an event (that is an individual match as opposed to a series or tournament) after the event has begun (see discussion below at Amendment (2)).

Amendment (2) – clause 5 – exemption of certain wagering services

This amendment inserts proposed new subclauses 5(3A) and 5(3B).  This amendment limits the types of wagering services that are exempt from the moratorium.  In effect it provides that wagering services on a sporting event after the event has begun are subject to the moratorium.  This amendment will ensure that ‘ball-by-ball’ betting services will not be exempt from the moratorium.

This type of continuous wagering is of particular concern as it goes beyond a mere extension of the telephone betting services currently offered.  There is a concern that potential new forms of interactive wagering services, such as real-time ‘ball-by-ball’ betting on interactive television, could evolve, with a potential risk of this ‘continuous’ wagering being highly addictive.

Proposed new subclause 5(3A) provides that the wagering services exemption in proposed new paragraphs 5(3)(aa) and 5(3)(ab) does not apply to wagering services on sporting events where the bets are placed, made, received or accepted after the beginning of the event.  

Proposed new paragraph 5(3A)(a) excludes betting services on the outcome of a sporting event after the event has begun from the wagering exclusion in proposed new paragraphs 5(3)(aa) and 5(3)(ab).  For example, a service that enables the placing of a bet on the result of a cricket match after the first ball has been bowled comes within new paragraph 5(3A)(a) and therefore would be subject to the moratorium. 

Proposed new paragraph 5(3A)(b) excludes a service relating to betting on a contingency that may or may not happen in the course of the sporting event after the event has begun from the wagering exclusion in proposed new paragraphs 5(3)(aa) and 5(3)(ab).

Examples of what would be covered by ‘a contingency that may happen during the course of the event’, include who is going to take the most wickets in a cricket match, whether the next ball in a cricket match will take a wicket, or who will serve the next ace in a tennis match.  Such wagering services would be subject to the moratorium.  

However this amendment does not cover services relating to betting on extraneous events, unrelated to the official course of an event, after an event has started.  For example, betting on the likelihood of rain during a cricket match, after the match has begun, would not be categorised as a ‘contingency that may or may not happen in the course of a sporting event’.  Consequently this would mean that such a wagering service would not be covered by the moratorium.

Nor would proposed new subclause 5(3A) cover betting services on the outcome of a tournament or series after the first match within that tournament or series has begun. Proposed new subclause 5(3A) only covers wagering on a ‘sporting event’ after the event has begun. A ‘sporting event’ refers to an individual event.  It does not cover wagering on a ‘series of sporting events’, such as a tournament or series, after an individual event has begun.  Proposed new paragraph 5(3)(ab) clearly distinguishes between an ‘event’ and a ‘series of events’ (see discussion above at Amendment 1).  Consequently betting on the final outcome of a cricket test series after the first cricket match has begun would not be covered by subclause 5(3A) and therefore would be excluded from the moratorium.

Proposed new subclause 5(3B) provides that a service that relates to betting on the conduct or outcome of a lottery or game is not an excluded service under new paragraph 5(3)(ab) (see Amendment 1).  This means that a wagering service on a game or lottery does not come within the exemption in paragraph 5(3)(ab).  For example, an interactive gambling service which involved a bet on the outcome of the spin of a virtual roulette wheel would not come under paragraph 5(3)(ab) and would not be an excluded service for the purpose of the moratorium.  This ensures that services which are properly characterised as interactive gaming or lottery services do not come within the exemption provided in paragraph 5(3)(ab).