The Current State of Play in Australian Bookmaker Licensing
Senet’s Daniel Lovecek and Julian Hoskins take a look at recent changes to the regulatory landscape faced by wagering operators in Australia.
Daniel Lovecek
Australia remains a popular destination for established local and international bookmakers and new market entrants alike, despite significant recent regulatory change and the promise of more to come. The marketplace continues to be characterised by strong performance and competition between the key operators in the market, including Tabcorp, the Flutter-owned Sportsbet and the Entain-owned Ladbrokes. Generosity (including free bet promotions) and other marketing and promotional spend remain at elevated levels.
“Political, regulatory and societal expectations of operators have (rightly) increased.”
Competition has recently spurred marketplace innovation with regard to social interactivity, personalisation and content. Interest in online licences from former exclusively on-course bookmakers has also increased demonstrably in recent times, owing to decreased on-course attendance rates and the availability of technology and related service providers to support this transition.
Although recently released results suggest some softening after a period of strong market growth in online wagering (supported by a pandemic-induced acceleration of online wagering), Australia continues to present opportunities for growth and participant success.
Current Context and Concerns
This competition is occurring amid a discernible regulatory and public focus on gambling harm and the extent of gambling advertising. Political, regulatory and societal expectations of operators have (rightly) increased – along with a growing awareness of gambling-related risks not only in the wagering sector but also across the gambling industry more broadly. This is a result of the impact of several well-publicised issues on casino and gaming machine operators.
As of April 2023, a Parliamentary inquiry is ongoing in respect of online gambling and its impacts on problem gamblers. The inquiry has expansive terms of reference, encompassing the impact of current regulatory and licensing regimes for online gambling on the effectiveness of harm minimisation and consumer protection efforts. It also addresses the impact and extent of gambling advertising (including as a consequence of children’s exposure to gambling products).
Several important regulatory reforms have also been implemented recently, such as:
- changes to gambling advertising messaging;
- bans on the provision of credit for betting;
- broad prohibitions on the offering of certain inducements (eg, to open betting accounts); and
- the compulsory provision of activity statements to consumers highlighting spend and other data.
The launch of a new national online wagering self-exclusion register is still anticipated in the short term, following lengthy delays in development and notwithstanding industry concerns with the design and other elements of the scheme.
What Licensing Options Are Available to Gambling Operators in Australia?
Prospective online bookmakers have various options to obtain a licence to conduct online wagering and, if they wish, telephone betting activities in Australia. Irrespective of the jurisdiction chosen, potential market entrants can expect extensive probity-related examinations and that the licensing authorities will require the applicant to demonstrate their suitability and financial capacity to conduct operations sustainably.
At a high level, licensing pathways include licensing by a principal racing authority – that is, the body in charge of regulating a particular code of racing in a given state (eg, Racing Victoria, which regulates thoroughbred racing in Victoria) – and/or the state or territory government. Of the alternatives available, the authors’ experience has been that licence applications via the Northern Territory remain especially popular and are the option of choice for new market entrants, in particular.
“Operators seeking to use a proprietary betting system can expect additional regulatory analysis before being approved to conduct operations in Australia.”
A number of important commercial and regulatory considerations inform a decision on which licensing avenue to pursue. These include – but are not limited to – taxation and fees (although the authors note the increases in point of consumption taxes), product offering flexibility (given that some forms of sports and bet types are not approved in certain jurisdictions), physical location of operations, and technology matters. Generally speaking, operators seeking to use a proprietary betting system can anticipate additional regulatory analysis before receiving approval to conduct operations.
Future Focus on Compliance
Gambling and financial crime regulators are increasingly active in Australia when it comes to setting expectations around sector focus on education and training, as well as being prepared to take action against wagering operators for non-compliance.
It is critical that, from the outset, operators establish effective policies and compliance control systems that are appropriately adapted to the evolving risks in the market. Ongoing training must also be delivered across a broad range of areas to build compliance capability. Specifically, such policies, systems and training should cover:
- responsible gambling (including procedures for identifying and responding to indicia that a customer may be experiencing gambling harm);
- advertising and promotions;
- AML/CFT; and
- financial management (to ensure the various Commonwealth, state and territory gambling taxes and product fees are assessed and remitted accurately).
Ensuring the security of customer and other personal information is also imperative in the increasingly challenging cybersecurity environment.
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