On 27 May 2011, the Council of Australian Governments (COAG) Select Council on Gambling Reform announced that the Department of Broadband, Communications and the Digital Economy (the department) would undertake a review of the Interactive Gambling Act 2001 (the IGA). An interim report from the review was released for public comment on 29 May 2012.

This final report takes into account the public comments on the interim report.

Summary and recommendations

The primary objective of the IGA is to reduce harm to problem gamblers and to those at risk of becoming problem gamblers. The evidence since the last review of the IGA suggests that it is making only a very minor contribution to this objective. The IGA may in fact be exacerbating the risk of harm because of the high level of usage by Australians of prohibited services which may not have the same protections that Australian licensed online gambling providers could be required to have.

• There may be around 2200 online gambling providers currently offering services to Australians that may be in contravention of the IGA.

• The number of Australians accessing these services is significant and growing.

• Some estimates suggest Australians lose around $1 billion per annum to online gambling service providers that are not licensed in Australia1. This is projected to continue growing strongly.

The effectiveness of the IGA in reducing the risk of harm could be increased by enabling and encouraging prohibited online gambling service providers, particularly those that are popular amongst Australians, to become licensed in Australia on condition that they:

• cease offering higher risk types of online gambling (for example, online slot machines) to Australians and only offer online gambling services that are of a relatively lower risk (for example, online tournament poker)

• agree to comply with a set of strong harm minimisation and consumer protection measures.

Implementation of such a strategy would require:

• introduction of a national standard for harm minimisation and consumer protection that licensed online gambling services must comply with

• online gambling providers that choose not to become licensed, and thereby do not sign up to the national standard, to be prohibited under the IGA

• targeted law enforcement and deterrence measures against online gambling providers who continue to offer services to Australians in contravention of the IGA (including cooperation with overseas law enforcement and regulatory bodies, while noting the limitations of extra-territoriality)

• appropriate incentives for online gambling service providers to become licensed in Australia

• measures to increase awareness amongst Australian users about the risks of using prohibited online gambling providers.