Last week, the Federal Government introduced the Interactive Gambling Amendment (Lottery Betting) Bill 2018 into the House of Representatives. If passed through Parliament, the Bill would ban lottery and keno betting services, also called "synthetic lotteries". These services allow customers to bet on the outcome of a lottery draw without having to purchase a ticket, with winning payouts being funded through insurance policies. In Australia, the main provider of these services is Lottoland, who are the only ones running these services as their sole operation. Lottoland is licensed in the Northern Territory, and last year was prohibited from offering bets on Australian lotteries by the Northern Territory Government.
Communications Minister Mitch Fifield said in a media release that the Government believed that allowing these services “undermines the long-standing community acceptance of official lottery and keno products”.
In his second reading speech to the House of Representatives, Mr Fifield explained:
“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.”
The Bill would amend the Interactive Gambling Act 2001 (Cth) to modify section 8AA to prohibit providers of a telephone betting service from providing a service relating to “betting on the outcome of a lottery” or “betting on a contingency that may or may not happen in the course of conduct of a lottery”. It would also modify section 8A to add “a service relating to betting on the outcome of a lottery” and “a service relating to betting on a contingency that may or may not happen in the course of the conduct of a lottery” to the list of excluded wagering services.
According to the Explanatory Memorandum:
“The effect of the Bill is that to the extent that a service relates on betting on the outcome of any lottery, or a contingency that may or may not happen in the course of the conduct of a lottery, these services will be prohibited interactive gambling services under the IGA.”
However, as noted in the Regulatory Impact Statement:
“... the scope of the IGA is limited to interactive or online gambling services. Lottery betting services may still be provided at land-based venues or in face-to-face interactions, however, they will be subject to state and territory regulation.”
Chief executive of Lottoland Australia, Luke Brill, told SBS News:
“The fact is that Lottoland does not offer betting opportunities on any Australian lottery, so our offering does not have a direct impact on newsagents…
On the contrary, we want to work with newsagents to provide customers with greater choice and even better services, which have the potential to be highly beneficial for individual newsagents."
TimeBase is an independent, privately owned Australian legal publisher specialising in the online delivery of accurate, comprehensive and innovative legislation research tools including LawOne and unique Point-in-Time Products. Nothing on this website should be construed as legal advice and does not substitute for the advice of competent legal counsel.
Interactive Gambling Amendment (Lottery Betting) Bill 2018 (Cth), Explanatory Memorandum and Second Reading Speech - available on TimeBase's LawOne service
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