Australian Bill Could Force Withdrawal of Poker Sites

An amendment to Australia´s 2001 Interactive Gambling Act could force some mainstream online poker sites to withdraw their services from the country.

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AustraliaAn amendment to Australia´s 2001 Interactive Gambling Act could force some mainstream online poker sites to withdraw their services from the country.

Online gambling in Australia has long been regarded as a “grey market” – a jurisdiction in which laws exist to prohibit the provision of online gambling but, due to the language of the laws, loopholes can be exploited to continue providing a service to gamblers.

When the current government came to power, it promised to close the loopholes in order to reverse a rise in problem gambling. According to Australia´s Human Services Minister – Alan Tudge – 2.7 percent of interactive gamblers are problem gamblers compared to 0.9 percent of all gamblers.

Last week the first stage of that promise was fulfilled when Australia´s House of Representatives passed a Tudge-sponsored amendment to the 2001 Interactive Gambling Act. If the amendment is passed by the country´s Senate, it would have serious implications for online poker in Australia.

Sports Betting to be Regulated – Online Casinos and Poker Banned

Having identified that more interactive gamblers have problems than “before-the-event” gamblers, the amendment to the 2001 Interactive Gambling Act bans all forms of betting during an event. Although this measure was intended to stop “in-play” betting during a sports event, it also prohibits placing a post-flop bet during a hand of online poker.

Some forms of online gambling will still be allowed. Under the provisions of the amendment, companies can apply for an online sports betting license, provided that their products are limited to “before-the-event” betting opportunities. Online casinos do not fall into this category because of the instant win nature of casino games. For the same reason, scratch card games are also prohibited.

There was hope that there would be an exclusion for online poker on the grounds that it is predominantly a game of skill. However, because there is an element of chance in how the cards are dealt, betting on the outcome of a game of chance or of mixed chance and skill has also been banned in the latest amendment to the Interactive Gambling Act.

The Implications for Online Poker in Australia

The implications for online poker in Australia are that many of the major sites will withdraw their services if the amendment is passed by the Senate. Keen not to be seen operating illegally and jeopardising their UK operating licences, sites such as PokerStars, 888Poker and Party Poker have already indicated that they will pull out of Australia as soon as the amendment is enacted.

During last week´s Q3 earnings call with investors, Amaya´s Chief Financial Officer – Daniel Sebag – said:

In Australia, we currently offer poker and are reviewing the applicability of proposed legislation to player-to-player games of skill. At this time, it would appear likely that if the legislation passes, we would block players from Australia.

The withdrawal of PokerStars from the Australian market would have a significant impact on the company´s finances. Industry experts have calculated that Australian poker players contribute 2.5 percent of Amaya´s revenues and, although the site does not offer sports betting or casino products in Australia, it was an area that the company was exploring.

Options May Still Remain for Online Poker Players

Although many of the mainstream online poker sites may withdraw their services from Australia, it is not yet known how sites serving the US will react to the changes to Australia´s online gambling laws. Several sites in the Bodog/Bovada Network already have a large presence throughout Asia, and they may well fill the void left by the withdrawal of PokerStars, 888Poker and Party Poker.

Other US-facing sites may encounter difficulties in attracting Australian poker players due to a lack of liquidity during off-peak hours and their schedules being targeted towards players in the States. However, many unregulated poker sites have successfully adapted to the changing online poker landscape, and it may well be the case that online poker continues to thrive in Australia even after the passage of the amended Interactive Gambling Act.