21 Oct 2009

Important changes recommended by draft report

The Productivity Commission's draft report on gambling has been released today, and its draft recommendations, if adopted, would dramatically transform the structure and dynamics of the racing and wagering industry, result in significant changes in the gaming industry's approach to harm minimisation and reintroduce online gaming into Australia.

Some particularly noteworthy draft recommendations made by the Commission include:

Racing and Wagering

  • generally, a push to a free national market and the removal of protectionist state-based arrangements;
  • the Federal Government, in consultation with State and Territory governments, to develop a national funding model for the racing industry, including the implementation of national legislation to replace current State and Territory arrangements;
  • the key element of the proposed national funding model is a levy based on gross revenue (not turnover) to be paid to the racing industry by wagering operators;
  • a new national independent authority rather than the racing industry to determine and periodically review the levy in consultation with gamblers, wagering operators and the racing industry;
  • inducements and credit betting to be allowed subject to certain parameters;
  • the ACCC to look at potential anti-competitive effects of current Sky Channel ownership by Tabcorp;
  • non-renewal of totalisator licence exclusivity in retail outlets (ie. to enable non-tote products in outlets); and
  • change in existing funding arrangements to reflect the market share of the relevant racing provider.

Online Gaming

  • repeal the Interactive Gambling Act and the current ban on online gaming, and in consultation with State and Territory governments, develop a regime which allows for the managed liberalisation of online gaming in Australia, including a strict regime of consumer protection, with stringent probity and harm minimisation standards.

Gaming Machines

  • a progressive move to a universal pre-commitment system to be in place by 2016, that will allow players to set spending limits on future gaming;
  • a maximum bet limit of $1 for gaming machines to reduce harm from high intensity gambling without impacting significantly on recreational gamblers;
  • a maximum limit on the amount of cash that can be inserted into gaming machines of $20 to slow play by problem gamblers;
  • shutdown periods for gaming machines to commence earlier and continue for a longer period; and
  • the possible introduction of a new statutory cause of action for consumers to seek compensation and the imposition of penalties against venue-based gambling providers who breach appropriate standards of behaviour (for example, improper use of inducements to gamble).

What happens next?

The Commission is seeking written responses by Friday 18 December 2009, and will be conducting public hearings during November and December. We urge everyone in the industry to consider making a submission. The final report will be sent to the Australian Government by 26 February, 2010.

We will provide an in-depth analysis of the proposals in our next edition of Leisure and Entertainment Insights.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.