Approximately 76 per cent of the bets taken by Sportsbet are on racing, with the remaining 24 per cent being on sporting or other events.

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2 Introduction Sportsbet Pty Ltd (hereafter, Sportsbet, we and our ) welcomes the opportunity to make a submission to the Victorian Competition and Efficiency Commission (VCEC) as part of the Commission s Inquiry into the Social and Economic Costs of Problem Gambling in Victoria (Inquiry) and related Issues Paper published by the VCEC dated July 2012 (Issues Paper). About Sportsbet Sportsbet is Australia s largest online corporate bookmaker, with over 1 million customers and an estimated 20 per cent of the Australian online wagering market. Consumers can place bets with Sportsbet on racing and sporting events, over the Internet on Sportsbet s home page, (Website) or by communicating with an operator by telephone. Sportsbet is licensed in the Northern Territory by the Northern Territory Racing Commission (NTRC). Sportsbet is wholly owned by Paddy Power plc, which is publicly listed on both the Ireland and London stock exchanges. Sportsbet employs approximately 330 staff across its Melbourne, Darwin and Sydney offices. Approximately 76 per cent of the bets taken by Sportsbet are on racing, with the remaining 24 per cent being on sporting or other events. Sportsbet wholly owns IASBet Pty Ltd, another online corporate bookmaker, which also provides wagering services in Australia, including over the Internet ( Commitment to Responsible Gambling Sportsbet supports efforts to better understand the social and economic costs of problem gambling in Victoria and if there are any outcomes which may be able to be applied more broadly. Sportsbet provides wagering services to many Victorian consumers and is committed to promoting responsible gambling. Online wagering in Australia is predominantly governed by the Interactive Gambling Act (Cth) Sportsbet is concerned that if the Act is not amended to take account of significant technological changes which have occurred since the Act was enacted, the level of problem gambling in Australia will increase as more Australians gamble money through unregulated foreign websites, rather than reputable, licensed Australian-based websites which have stringent responsible gambling measures in place to minimise the risk of problem gambling among customers as well as manage funds wagered by consumers. Sportsbet is cognisant of the negative impact that problem gambling may have on individuals and their families, employers, governments and community organisations more broadly. While Sportsbet does not shy away from this fact, we consider that it is important that the Commission does not lose sight of the fact that the evidence demonstrates that the prevalence of problem gambling in Australia is relatively low. The Victorian Department of Justice survey in 2008 referred 2

3 to in Part 2.3 of the Issues Paper estimated that 0.7 percent of Victorian adults are problem gamblers. Sportsbet subscribes to the NT Code of Practice for Responsible Gambling (Code). The Code has been developed by the Responsible Gambling Advisory Committee which comprises representatives from, among others, Amity Community Services, Anglicare Top End, Salvation Army and industry. The Code represents a commitment by NT licensees to best practice in the provision of responsible gambling. The Code deals with the fundamental responsible gambling practices including: a) Training of key personnel in relation to the provision of responsible gambling services; b) Provision of information to the public about responsible gambling and the potential risks associated with gambling and where to get help for problem gambling; c) Strategies to ensure minors are prohibited from gambling and not induced to gamble; d) The option to customers to self-exclude themselves from the gambling venue/site; and e) Advertising and promotion in an honest and responsible manner with consideration given to the potential impact on people adversely affected by gambling (including compliance with the Advertising Code of Ethics). Benefits of Wagering/Gambling Further, while the Commission has not been asked to examine the benefits of wagering and gambling, it should be recognised that there are numerous benefits for Australians by permitted Australian-based websites to offer legalised and regulated online gambling products including:. Consumer protection Providing consumers with the opportunity to gamble online with highly regulated Australian operators who have stringent harm minimisation measures in place. Enjoyment Gambling is an enjoyable pursuit for the vast majority of those who participate. Financial contribution - As recognised in the Issues Paper, the State, Territory and Commonwealth Governments receive considerable financial benefit from the licensing and taxation of the gambling industry which is channelled back into the community. Australian companies in the gambling industry also create many thousands of jobs in Victoria. Support for racing and sporting codes Over the last 5 years, Sportsbet has contributed more than $50 million in product fees to Australian racing and sporting bodies. Improved integrity Wagering operators such as Sportsbet have integrity agreements with all major racing and sporting bodies on which they offer wagering products. These agreements facilitate the capturing and sharing of information with the codes where necessary to protect integrity. 3

4 Sportsbet s Responsible Gambling Measures 1. Account-based betting All bets placed by Sportsbet s members are done through registered online accounts which facilitate a variety of controls for responsible gambling, which is not possible with cash-based retail betting or on land-based gaming machines (electronic gaming machines). These include: Customers can set a daily spend limit when opening an account or update this at any time subject to a 24-hour cooling off period before a second change to increase a betting limit; Customers can self-exclude for various periods of time; and Individual customer activity can be monitored by trained staff. 2. Identification verification and minors Sportsbet is committed to ensuring that individual s under the age of 18 years are not able to access our wagering services. We take our responsibility to promptly and accurately verify the identity of our customers seriously. Currently, in line with anti-money laundering legislation, we verify customer s accounts within 90 days. There are two methods which customers can use to verify their identity: using online service providers who access a variety of databases to verify customers identities; and by providing physical copies of certified identification documents in order to satisfy the 100 points of identification requirement. Customers who are unsuccessful with online verification must provide physical copies of certified ID documents to Sportsbet. 3. Account limits and self-exclusion Sportsbet members can allocate a maximum amount that can be deposited into their betting account for a nominated period (e.g., day, week or month). Any deposits that are made that may cause the limit to be exceeded will be denied. Sportsbet has in place self-exclusion provisions for up to five years. The key features of these provisions are: a) Sportsbet provides the relevant customers with information regarding available problem gambling counselling and assistance services; b) Customers are not able to remove or void any suspension once it is in place; c) If the customer attempts to set up an alternate account, system controls will prevent them joining as a member while the self-exclusion is in force; and d) Following the expiry of the self-exclusion period, the member must provide written authority to re-activate their account. 4

5 4. Spend tracking facilities Sportsbet enables customers to track their wagering spend via their account statements, which ensure that customers can readily access this information in order to monitor their wagering activities and spend to ensure it is within their limits. This is a significant point of difference from retail wagering and gambling on electronic gaming machines. 5. Responsible gambling messages Sportsbet provide prominent information regarding responsible gambling on our website and contact details of problem gambling services. This information is intended to ensure that customers can easily access this information in order to assess their own circumstances. 6. Responsible gambling advertising practices Sportsbet is committed to complying with the Australian Association of National Advertisers Code of Ethics and other applicable State and Territory responsible gambling advertising practices and guidelines. For instance, Sportsbet s advertising and promotions are performed in a manner which, among others: does not give the impression that gambling is a reasonable strategy for financial betterment; is not implicitly or explicitly directed at minors or vulnerable or disadvantaged groups; and does not depict or promote the consumption of alcohol while engaged in the activity of gambling. Proposed Additional Responsible Gambling Measures In addition to the extensive responsible gambling measures Sportsbet already has in place, Sportsbet advocates the adoption of a national approach to responsible gambling through the establishment of: A National Gambling Council; and A National Problem Gambling Register. National Gambling Council Sportsbet is supportive of the establishment of a National Gambling Council which would have the following key responsibilities: Establishment of a national set of harm minimisation standards covering responsible gambling, advertising, licensing requirements, and probity standards. State-based regulators would then work within this framework; Undertake comprehensive and robust Annual National Problem Gambling Prevalence Surveys into problem gambling including: o assessing the impact of the growth in online gambling on the prevalence of problem gambling; 5

6 o determining the impact on youth of the prominence of gambling services on social media such as Facebook and Twitter; and o researching the most effective forms of harm minimisation for use by gambling service provides governments, the community and counselling services. Establish a comprehensive education program for use in schools and the broader community focused on educating individuals about how to gamble responsibly; Monitor compliance with the national regulatory framework; and Monitor for and prosecute unlicensed overseas gambling operators who advertise on Australian media. National Problem Gambler Register Currently, Sportsbet s customers have the ability to self-exclude or set deposit limits (voluntary precommitment) so that they may appropriately control their wagering activity. However these limits and exclusions are only effective in limiting and preventing wagering on Sportsbet s Website and IASbet.com. No other gambling provider has access to this information and so the customer is free to gamble elsewhere free of these self-imposed restrictions. Sportsbet believes that a National Problem Gambler Register should be established. Any customer who self excludes or sets limits on their activity with a licensed Australian gambling operator would be recorded on this Register. All gambling operators would then be required to check new customer applications against this Register and also periodically check their existing customer database against this Register. Any identity matches would result in a rejection of new application or suspension of an existing account. All licensed operators would be required to have IT systems with adequate sophistication to enforce this process. This mechanism is currently used in conjunction with a number of sporting bodies where there is a requirement for wagering operators to exclude anyone considered an insider in relation to a particular sporting competition from placing a bet on that competition (eg. AFL players, officials etc cannot bet on AFL related markets). Regulatory Costs on Business In Part 5.6 of the Issues Paper, the Commission poses the question about whether regulatory costs imposed on business should be included in its analysis of the social and economic costs associated with problem gambling in Victoria. This is a complex question involving a multitude of factors. However, Sportsbet is of the view that the cost to our business (and wider industry) of having stringent responsible gambling measures in place should not be included in data which quantifies the social and economic cost of problem gambling in Victoria. As with many businesses, Sportsbet strives to be a responsible corporate citizen with a sustainable business model and implementing these measures is an integral part of this. Conclusion Sportsbet is pleased to provide this submission for consideration and is available to meet with the Commission should the Commission wish to as part of its consultation process. 6