Research for the review of the Interactive Gambling Act 2001

Transcription

1 Research for the review of the Interactive Gambling Act 2001 Gambling and 'In-the-run' betting April Report to the Department of Broadband, Communications and the Digital Economy

2 Allen Consulting Group Pty Ltd ACN , ABN Melbourne Level 9, 60 Collins St Melbourne VIC 3000 Telephone: (61-3) Facsimile: (61-3) Sydney Level 1, 50 Pitt St Sydney NSW 2000 Telephone: (61-2) Facsimile: (61-2) Canberra Empire Chambers, Level 2, 1-13 University Ave Canberra ACT 2600 GPO Box 418, Canberra ACT 2601 Telephone: (61-2) Facsimile: (61-2) Website: Disclaimer: While the Allen Consulting Group endeavours to provide reliable analysis and believes the material it presents is accurate, it will not be liable for any claim by any party acting on such information. Allen Consulting Group 2012 The Allen Consulting Group ii

3 Contents Executive Summary Access to Gambling In-the-run Betting Findings v v vii ix Chapter 1 1 Introduction Purpose of report Report structure Terms of Reference and this Report Assessment on the evidence bases A note on terminology 8 Chapter 2 9 Policy context The Interactive Gambling Act Review of the Interactive Gambling Act Other concurrent gambling reviews 12 Chapter 3 14 The online gambling market Introduction Gambling as part of the growth of the Internet Forms of internet gambling Consumption of Internet gambling Prevalence of online gambling Payment methods 37 Chapter 4 40 Regulating online gambling Prevalence of online problem gambling Risks factors associated with problem online gambling Sports integrity associated with in-the-run and micro betting Australian regulation of online gambling Limiting unlawful provision of online gambling services International regulation of online gambling Consumer response to regulation on online sites 90 The Allen Consulting Group iii

4 Chapter 5 93 Minimising harms from Internet gambling Rationale for harm minimisation Current approach to harm minimisation Assessment of harm minimisation effectiveness measures Substitution effect if online in-the-run betting (including micro betting) are allowed 105 Appendix A 107 Research specification 107 A.1 Access to Gambling 107 A.2 In-the-run betting 108 Appendix B 109 Terms of Reference for 2011 Act Review 109 Appendix C 110 Roy Morgan Research Single Source Database Player Profile 110 C.1 How to read the tables 110 C.2 Demographic characteristics 111 C.3 Attitudes and Leisure & Entertainment Spend 111 C.4 Types of Gambling 111 C.5 Frequency of Bets Placed in the last 3 months 111 C.6 Average Spend on Bets in the last 3 months 111 References 166 The Allen Consulting Group iv

5 Executive Summary Access to Gambling Prevalence of online gambling There are no definitive studies that precisely quantify the prevalence of online gambling in Australia. Evidence from the Roy Morgan database suggests that online gamblers make up 9.4 per cent of all gamblers with around 3.9 per cent of the adult population gambling online and 0.9 per cent of the adult population participating in online gaming, which is prohibited under the Interactive Gambling Act 2001 (the IGA). Studies conducted in Tasmania, Queensland and the ACT suggest that the Australian interactive gambling market is small with prevalence rates ranging between 1.4 to 5.2 per cent. Findings from focus groups reveal that there has been a significant increase in the prevalence of online gambling over the past five years and that focus group participants engage in online gambling activities that are allowed and prohibited under the IGA. Prevalence of problem online gambling and risk factors There has been minimal Australian research on the prevalence of problem gambling among online gamblers. What evidence exists is mixed. Some of it suggests that the prevalence of problematic online gambling is at about the same proportion as prevalence of problem gambling in general; however, other evidence suggests that the nature of online gambling (e.g. small, high frequency wagers) makes it conducive to problematic behaviour. The 2006 Tasmanian and 2010 Australian Capital Territory gambling prevalence studies estimated that approximately 10 per cent of internet gamblers in both states are moderate-risk or problem gamblers. International studies suggest higher rates of problem gambling among online gamblers than gamblers in general. The 2010 British Prevalence Survey revealed that 5.3 per cent of interactive gamblers were classified as problem gamblers using the DSM-IV (scores of 3 or more). The United Kingdom has higher rates of internet gambling and median spend than Australia. Studies have identified that the risk factors associated with problem online gambling include high level of accessibility and convenience and opportunities for impulsive gambling; the use of credit cards; the increased social isolation of the interactive environment; the ease of drinking and drug taking while gambling; the immersive quality of the internet; and lower levels of consumer protection. The Allen Consulting Group v

6 Regulation Limiting unlawful provision of online gambling services Payment blocking, ISP blocking, advertising restrictions, direct enforcement measures, diplomatic pressure and international cooperation have all been suggested as potential measures to limit the unlawful provision of online gambling services. European regulators support implementing a suite of measures to limit unlawful online gambling service provision as no single measure is effective on its own. However, payments blocking and advertising restrictions appear to be the most prominent measures used. Gambling service providers believe that financial restrictions and attempted blocking of consumers from unlawful sites would prove to be ineffective as consumers are able to circumvent these measures. International trends International online gambling regulation models include: monopoly markets in Norway, Sweden and Finland where a broad range of products is offered; the free market approach to the regulation of online gambling in the United Kingdom; ringed fenced markets, where a more restrictive approach is adopted through regulating internet gambling at the point of consumption, taxes are imposed and players and operators are protected from black market offerings; offshore licensing where some of the world s largest online gambling companies hold licences in one or more of these jurisdictions and target customers and revenues from outside of these jurisdictions; and fully restricted internet gambling adopted in Germany and partially restricted gambling in the United States. 1 An emerging trend is ring fencing, which was first introduced by Italy and since adopted in France, Denmark, Spain, Romania, Poland, Belgium with the UK, Ireland and others indicating they will be moving towards a similar model. Harm Minimisation One prominent Australian study has noted the benefits of regulating harm minimisation measures, suggesting that it could include prominently displayed account information, tools to enable time and money limit pre-commitments, notifications about risky behaviour, self-exclusion protocols, age checks, credit betting restrictions and self-assessment tools. Other studies found that pop-up messages effectively captured gamblers attention during play, communicate information that is comprehended and influence gambling-related thoughts, but there is less evidence that they have any sustained impact on behaviour. The method of displaying signs may impact on awareness and recall of harm minimisation messages. The Allen Consulting Group 1 sports betting and poker are unlawful in the United States. According to a December 2011 memorandum opinion from the Department of Justice (DoJ), online lottery sales are not unlawful. The DoJ maintains that online horse race betting is a violation of federal laws. However the authors of this report are unaware of any prosecutions in this area. vi

7 Gambling service providers make available a range of harm minimisation measures on their sites but have indicated that usage is on a voluntary basis and have observed low participation by consumers. This observation is consistent with a focus group finding that most participants are aware of gambling management tools but do not use them as they are proud that they are in control of their gambling behaviour, and prefer that the adoption of protection measures not be mandatory. A range of harm minimisation measures is implemented in Europe as part of regulatory requirements. European regulators have indicated that it is too early to comment on effectiveness of these measures as they have been recently implemented and more research is required. However, initial feedback seems to be positive. Best practice Based on the trends of online gambling regulation models and harm minimisation measures implemented in Europe, it is too early to definitively evaluate or determine the effectiveness of these models and measures. Ring fencing however has been identified as an emerging online gambling regulation model in Europe, with payments blocking and advertising restrictions among prominent measures employed. Initial feedback on harm minimisation measures implemented has been positive though more research is required. In-the-run Betting Prevalence of in-the-run gambling There is no systematic Australian evidence known to the authors of this report on the prevalence of in-the-run and micro betting. Consultations with gambling service providers undertaken for this report suggest the prevalence is small, or at least the amounts that are gambled with these types of bets are small. According to discussions with European regulators, there is an increased prevalence of betting where micro betting is allowed. Additional risk factors Problem gambling While there may be an increased in prevalence of betting where micro betting is allowed, there is an absence of evidence in the research literature that it leads to a greater prevalence of problem gambling. However, problem gambling counsellors and other stakeholders believe that the intensity and anonymity of in-the-run betting online could lead to problem gambling. Integrity of events Sporting bodies have indicated concern regarding bets made to subsets of events and the potential links to integrity issues. Consistent with the National Policy on Match Fixing agreed to in June 2011 by Commonwealth, State and Territory Sports and Recreation Ministers, most sporting bodies have integrity agreements in place with gambling service providers which provide for the exchange of information, particularly around the placement of bets by people associated with the particular sports. The Allen Consulting Group vii

8 Europe s principal sports bodies have expressed their concerns over the proliferation of in-the-run (in-play) betting, including micro betting, and also outlined measures which are being taken to prevent match fixing. The sports bodies have implemented player education and entered into memoranda of understanding with the betting industry where betting organisations agree to provide information and suspicious betting activities or unusual betting volumes. Regulation International trends Three principal regulated betting markets (the United Kingdom, France, which does not allow micro bets, and Italy) have adopted positions on in-play betting while others (Spain, Belgium, Denmark, and Poland) are still assessing their positions on the activity. While they have not yet regulated online sports betting, Germany and Greece are also known to be considering the regulation of in-play betting. Currently, all the European regulators that have assessed in-play betting activities have determined that there are no significant differences between in-play and traditional ante-post betting and have decided to regulate it in the same way, and under the umbrella of existing betting regulation. Applying different rules Sporting bodies, while not supportive of in-the-run and micro bets, agree that betting regulation should be platform neutral. Views expressed to justify platform neutrality include: the belief that regulation should be indifferent to the technology used to place bets; there is no meaningful distinction to be made between bets that are made online or via a telephone; if such bets are allowed in the first place, they should be allowed on all mediums; and in-the-run and micro bets that are placed online pose no additional risks or integrity issues for sports, over and above in-the-run and micro bets that are placed by some other means. Gambling service providers agreed that platform neutrality should apply to in-therun bets including micro bets. The Allen Consulting Group viii

9 Findings Finding 1: Prevalence of online gambling by Australians (Access to online gambling TOR #1) [page 36] There are no definitive studies which precisely quantify the prevalence of online gambling in Australia, because it is a relatively recent form of gambling and to date has been a relatively small part of the gambling market. Evidence from the Roy Morgan database indicates that around 3.9 per cent of the adult population gambles online. The prevalence of online gaming (which is prohibited under the IGA) is around 0.9 per cent of the adult population. gamblers make up around 9.4 per cent of all gamblers. This evidence is consistent with the gambling research literature that finds that interactive gambling is a relatively small part of the overall gambling market. Recent prevalence studies by state include Tasmania (1.4 per cent), Queensland (2.0 per cent) and the ACT (5.2 per cent). The evidence from the literature suggests there is a higher prevalence of types of online gambling that is permitted under the IGA (e.g. horse and sports betting) than types that are prohibited (e.g. table games). Evidence from focus groups suggests that a significant increase in the prevalence of online gambling over the past five years. Focus group participants mostly gambled on betting types that are allowed under the IGA but also on those that are not, such as Texas Hold em poker and blackjack. Finding 2: Prevalence of in-the-run and micro betting ( In-the-run betting TOR #1) [page 37] There is no academic literature yet on the prevalence of in-the-run and micro betting in Australia. In Europe in-play (i.e. in-the-run) betting has grown very fast and accounts for over half of non-horse racing on-line betting. According to discussions with gambling service providers, in Australia, this kind of betting is a small, albeit growing, part of the gambling market. Because of the legal suppression of online in-the-run betting (including micro betting), this type of betting does not yet appear to be front-of-mind amongst Australian gamblers. It is possible that, should in-the-run online betting be legalised in Australia, this type of betting would become as popular as it is in Europe. However, as a practical matter, this kind of betting becomes feasible only with very fast and reliable internet speeds, especially for short-lived events, such as micro-events. Thus even if in-the-run and micro betting are legalised in Australia, their ability to grow to European levels could depend on the speed and quality of internet connections available to gamblers. The Allen Consulting Group ix

10 Finding 3: Relative frequency of payment methods (Access to online gambling TOR #3) [page 39] The way Australian gambling online customers pay for their bets is by establishing accounts with gambling service providers. When bets are made, money is debited from these accounts, and winnings are credited to them. The majority (70 to 80 per cent) of customers establish and top up these accounts with credit cards. Other payment methods such as PayPal and POLI are small but growing in importance. Finding 4: Relative prevalence of problem gambling amongst Australian online gamblers (Access to online gambling TOR #2) [page 44] There has been minimal Australian research on the prevalence of problem gambling among online gamblers. What evidence exists is mixed. Some of it suggests that the prevalence of problematic online gambling is at about the same proportion as the prevalence of problem gambling in general; however, other evidence suggests that the nature of online gambling (e.g. small, high frequency wagers) makes it conducive to problematic behaviour. International evidence shows higher rates of problem gambling among online gamblers. Finding 5: Extent to which [in-the-run and micro] betting raise additional risks from a problem gambling perspective ( In-the-run betting TOR #2) [page 47] Problem gambling counsellors, and other stakeholders, believe that the intensive and anonymous form of in-the-run betting online, such as micro betting, could lead to problem gambling risks that are over and above those associated with terrestrial gambling. The British Gambling Commission also noted that in-play betting could begin to look like a gaming environment. Finding 6: Problem online gambling risk factors (Access to online gambling TOR #4) [page 52] Studies have identified that the risk factors associated with problem online gambling include high level of accessibility and convenience and opportunities for impulsive gambling; the use of credit cards; the increased social isolation of the interactive environment; the ease of drinking and drug taking while gambling; the immersive quality of the internet; and lower levels of consumer protection. The Allen Consulting Group x

11 gambling offers convenience, comfort and easy access, but this is true for both problem and non-problem gamblers. More research is needed to distinguish between problem gambling that happens to be online and gambling where the problem occurs because it is online. Finding 7: Extent to which permitting [in-the-run and micro betting] online is likely to contribute to greater risk in terms of problem gambling, consumer protection and integrity of a sports event ( In-the-run betting TOR #5) [page 60] Problem gambling counsellors believe that the intensive and anonymous form of inthe-run betting online, such as micro betting, could lead to problem gambling. There is no evidence that in-the-run and micro betting, in general, pose additional risk in terms of consumer protection, except insofar as they might be associated with manipulated outcomes of events. It is clear that micro betting (and exotic betting) can pose an integrity problem for sports, as the outcomes of subsets of events (as opposed to the event itself) can be relatively easily manipulated. However, it is not clear that online micro betting, or online exotic betting, create any additional integrity problems. Indeed, according to gambling service providers, because online bets are more easily traced than terrestrial bets, which can be made anonymously, it is less likely that bets on subsets of events, where the integrity of the event has been compromised, will be placed online than off-line. Finding 8 : Issues that arise from having different rules regarding the same services delivered online and via the telephone ( In-the-run betting TOR #3) [page 70] Among gambling service providers, there exists a great deal of confusion around the definition of an event for the purposes of not breaching the prohibitions in the IGA against in-the-run betting. Some also believe that the current rules place Australian gambling service providers at a competitive disadvantage vis-a-vis their international competitors. Similarly, sporting bodies also believe that the IGA is unclear in this regard. With smartphones (or other mobile devices) enabling bets to be made online or by a voice call using the same device, the sense of having different rules regarding the same services delivered online or by telephone is diminished even further. All gambling service providers and sporting bodies consulted believe that regulations should be platform-neutral. The Allen Consulting Group xi

12 Finding 9: Additional measures that might be applied to in-the-run and micro betting to preserve integrity of sports events and consumer protection ( In-the-run betting TOR #6) [page 71] Based on discussions with sporting bodies, consideration could be given to allowing sporting bodies to define an event for the purposes of regulating in-the-run betting. Finding 10: Examples of best practice in other countries that have introduced regulated access to online gambling (Access to online gambling TOR #8) [page 89] It is too soon to tell what could be classified as best practice, but ring fencing (whereby online gambling service providers are brought inside the tent ) is an emerging trend in Europe. European regulators are confident that ring fencing regimes will provide an effective means of controlling online gambling though none claims that any regulatory solution is or can be infallible. The architecture of ring fencing includes permitted games, a taxation regime, licensing and regulations on server location. The variation in particulars of ring fencing across European countries reflects the lack of a Euro-consensus, e.g. UK regulators taking the view that in-play betting poses no significant difference to traditional betting in relation to harm minimisation and integrity issues; on the other hand both France and Italy have tight restrictions on micro betting. A taxation rate of about 20 per cent on gross gaming revenue appears to be consistent with creating a competitive regime that can channel consumers away from the black market. In contrast, the example of a high turnover tax in France indicates that this type of taxation model has the opposite effect. Finding 11: Examples of best practice in other countries of limiting access to unregistered online gambling services providers (Access to online gambling TOR #9) [page 89] Various methods are used overseas to limit access. These include payments blocking, ISP blocking, advertising restrictions, direct enforcement measures, diplomatic pressure and international co-operation. Payments and advertising restrictions are most prominent. The effectiveness of these measures has yet to be conclusively determined but payments blocking and advertising restrictions appear to be having the intended effect of restricting unlawful online gambling in some countries, such as the US. The Allen Consulting Group xii

13 Finding 12: Approaches taken overseas to [micro and in-the-run] betting ( In-the-run betting TOR #4) [page 90] Three principal betting markets have adopted positions on in-the-run (or in play) betting. The United Kingdom and Italy allow in-play including micro betting while France only allows in-play betting but not micro betting. Other European jurisdictions are still considering their positions. To date in-the-run betting has been assessed as being no different in principle to ante-post betting and is regulated the same way, under the umbrella of general betting regulation. It is too soon to judge the effectiveness of overseas approaches to in-the-run and micro betting on harm minimisation, consumer protection and sports integrity. Finding 13: For those people who play online, preferences to play on a regulated if one was available rather than on an unregulated (Access to online gambling TOR #5) [page 92] Australian gambling consumers aren t very well informed about what sites are regulated and if so how they are regulated. They do have a preference for what they perceive to be safe sites, based on size and reputation, and appear to be prepared to manage the risks themselves. More research is needed on whether, given sufficient information and opportunity, they would actually choose a safe, regulated site over an unregulated site (which is similar in other respects). Finding 14: Effectiveness of different harm minimisation measures (Access to online gambling TOR #7) [page 104] The research literature, while sparse, suggests a number of measures which could be effective in reducing harms from online gambling, including pop-up messages, spending pre-commitment and social responsibility response tools (e.g. personal budgets and self-exclusion options). Australian gambling service providers offer a variety of voluntary harm minimisation measures, such as pre-commitment and self-exclusion. The use of these is generally low, which could be interpreted in a number of ways: they might be ineffective, or they might not be needed. Overseas, harm minimisation measures have been introduced only quite recently and it is too soon to tell whether they are working. The Allen Consulting Group xiii

14 Chapter 1 Introduction 1.1 Purpose of report The Department of Broadband, Communications and the Digital Economy (the Department) is currently undertaking a review of the operation of the Interactive Gambling Act 2001 (the IGA). In particular, the review is to have reference to: the growth of online gambling services (both regulated and unregulated) in Australia and overseas, and the risk of this to the incidence of problem gambling; the development of new technologies, including smart-phones, and the convergence of existing technologies that may accelerate the current trend towards the take-up of online gambling services in Australia and overseas; the adequacy of the existing provisions of the IGA, including technical, operational and enforcement issues relating to the prohibition of interactive gambling services and the advertising of such services; consideration, where appropriate, of technology and platform neutrality including current distinctions relating to 'betting on the run' and micro betting; international regulatory approaches to online gambling services including consideration of their effectiveness and cost; examination of the social, tax, jurisdictional and enforcement aspects of regulated access to interactive gambling services currently prohibited under the IGA; and harm minimisation strategies for online gambling. To inform the review, the Department has engaged the Allen Consulting Group (ACG) to provide advice on access to online gambling, including its prevalence, risk factors, harm minimisation measures and overseas examples of best practice and issues relating to betting in-the-run including micro betting. While this examines most of the topics listed under the term of reference for the Review, it does not include how technology influences the uptake of online gambling services or the adequacy of current provisions in the IGA relating to prohibition of interactive gambling services and advertising. ACG has adopted a multi source approach to gather evidence needed to examine the issues at hand. Sources from which the information and data gathered for this report include: The Allen Consulting Group 1

15 an extensive literature survey on issues related to online gambling with a focus on in-the-run and micro betting including; prevalence of online gambling and online problem gambling; risk factors associated with online gambling; harm minimisation measures and their effectiveness; development of an online gambler profile using data from Roy Morgan Research Single Source database; extensive international research on: the architecture of regulation and taxation of the online gambling market that have been adopted by overseas jurisdictions; harm minimisation measures implemented and their effectiveness; in-the-run and micro betting and how it affects the integrity of sports; targeted consultation with 20 consumers of gambling services via two focus groups conducted in Melbourne and Sydney; and consultations with three main industry stakeholder groups; namely, gambling service providers, gambling counsellors and sporting bodies. gambling activities and its regulation impact each stakeholder group in different ways. Stakeholders provide insights across a wide range of issues that need to be considered when regulating interactive gambling. 1.2 Report structure The report is structured as follows: Chapter 2 briefly describes the Interactive Gambling Act 2001 and how it regulates internet gambling. The chapter sets the policy context by discussing past and current reviews; Chapter 3 sets the scene for the report by describing the internet gambling market internationally and in Australia, the characteristics of online gamblers that differentiate them from terrestrial gamblers including payment methods favoured and the prevalence of online gambling (including in-the-run and micro betting); Chapter 4 discusses online gambling market regulation, both in Australia and internationally. The chapter provides insights into the effectiveness of the IGA in minimising problem gambling from different stakeholder groups perspectives. It also discusses possible improvements to the current regulatory regime and approaches to preventing the unlawful provision of online gambling services. The chapter also provides a discussion on how international jurisdictions have regulated online gambling; and Chapter 5 discusses harm minimisation measures that are currently in place in Australia and internationally to protect online gamblers from fraudulent transactions and help manage their gambling activities. The Allen Consulting Group 2

16 1.3 Terms of Reference and this Report A detailed term of reference of the work that ACG is conducting is provided in Appendix A. In addition, the terms of reference for the Review that the Department is currently conducting is provided in Appendix B. Table 1.1 below shows where in the report the terms of reference have been addressed. The Allen Consulting Group 3

17 Table 1.1 WHERE THE TERMS OF REFERENCE ARE ADDRESSED IN THIS REPORT ACCESS TO ONLINE GAMBLING 1. current prevalence of online gambling by Australians on Australian based sites and overseas based sites. This should cover both online gambling that is allowed by the IGA as well as online gambling that is prohibited to be provided under the IGA (including online poker card playing) 2. the relative prevalence of problem gambling amongst Australian online gamblers on both allowed and prohibited services Section 3.4 (Consumption of Internet gambling) pp Section 3.5 (Prevalence of online gambling) pp Section 4.1 (Prevalence of online problem gambling) pp relative frequency of different payment methods used by Australian online gamblers using both allowed and prohibited services Section 3.6 (Payment methods) pp problem online gambling risk factors including demographic and other related risk factors and whether there are different risk factors associated with different types of online gambling such as online poker games (both tournament online poker and cash games) or sports wagering 5. for those people that already gamble online, preferences to play on a regulated site if one was available rather than on an unregulated site Section 4.2 (Risks factors associated with problem online gambling) pp Section 4.7 (Consumer response to regulation on online sites) pp for those that do not currently gamble online, likelihood of gambling on a regulated site if a regulated site was available Section 4.7 (Consumer response to regulation on online sites) pp effectiveness of different harm minimisation measures for online gambling including those adopted overseas as well as those suggested by the Productivity Commission: player identification to prevent underage play, duplicate accounts and betting by individuals involved in an event communication of account activity in an easily comprehendible and meaningful format pre-commitment strategies for time and money education about games, statistical probabilities of winning and responsible gambling including practical strategies dynamic warnings feedback on player behaviour including self-tests and alert systems which identify potentially problematic play self-exclusion options customer support 8. examples of best practice in other countries that have introduced regulated access to online gambling, including the architecture of regulation and taxation. Section 5.2 (Current approach to harm minimisation) pp Section 5.3 (Assessment of harm minimisation effectiveness measures) p 104 Section 4.6 (International regulation of online gambling) pp examples of best practice in other countries of limiting access to unregistered online gambling service providers Section 4.5 (Limiting unlawful provision of online gambling services) p 71 Additional material Section 3.4 (Consumption of Internet gambling) pp Characteristics of online gamblers The Allen Consulting Group 4

18 IN-THE-RUN BETTING 1. the prevalence of in-the-run betting and micro betting in Australia and overseas, whether using telephone or online betting services or other services Section 3.5 (Prevalence of online gambling): pp the extent to which these types of gambling raise additional risks from a problem gambling perspective, including whether there are different problem gambling risks associated with betting on the final outcome of an event after the event has started compared to micro or ball by ball betting 3. the issues that arise from having different rules regarding the same services delivered online and via the telephone Section 4.1 (Prevalence on problem online gambling) pp Section 4.4 (Australian regulation of online gambling) pp approaches taken overseas to these types of online wagering, including regulatory measures, harm minimisation measures and measures to protect consumers and the integrity of sport Regulatory measures Section 4.6 (International regulation of online gambling) pp Harm minimisation measures and customer protection Section 5.2 (Current approach to harm minimisation) pp Section 5.3 (Evidence base for harm minimisation) p the extent to which permitting either of these two types of wagering online is likely to create a greater level of risk in terms of problem gambling, consumer protection and the integrity of a sports event this should be considered in terms of accessing these services both online or via the telephone Section 4.1 (Prevalence on problem online gambling) pp Section 4.3 (Sports integrity associated with in-the-run and micro betting) pp what additional measures might be applied to in-the-run betting and micro betting to preserve the integrity of sports events and consumer protection Additional material Section 4.4 (Australian regulation of online gambling) pp Section 4.4 (Australian regulation of online gambling): pp The IGA: Comprehension and lack of clarity 1.4 Assessment on the evidence bases The authors of this report have conducted a comprehensive review of the research literature on online gambling, especially the psychology literature, including online problem gambling. What stands out is that the literature is still immature and fragmented, particularly in comparison with the literature on gambling in general. As a result, while there is some evidence that can be used to answer the questions in this report s Terms of Reference, there is not a lot of evidence, and not all of the evidence is consistent e.g. on risk factors for problem online gambling. There is no evidence in the literature on online micro and in-the-run betting. The Allen Consulting Group 5

19 This is to be expected. gambling is a relatively new phenomenon, and academic research always lags contemporaneous phenomena. It takes time for researchers to realise that a particular issue is worth investigating, to finish what they are already doing, to raise the resources to study the issue in question, to agree on an acceptable research methodology, to collect sufficient data and analyse that data, and to publish their results. In the case of online gambling, which around the world is relatively small but growing rapidly, the problem is compounded by the fact that conclusions about what has been a niche activity may become inapplicable when it becomes mainstream, perhaps as mainstream as gambling in general. Furthermore, the study of problem online gambling can become conflated with the study of problem gambling (in general) and problem internet use (in general). Teasing out the factors that are truly causal (as opposed to correlative) is a difficult research task. Finally, specific Australian evidence in the literature is, at this stage, very sparse. The authors of this report have supplemented their study of the literature with other sources, but each of these is limited as well. The Roy Morgan database provides a comprehensive breakdown of the socio-economic breakdown of online gamblers and their spending patterns, but is silent on questions of problem gambling, regulation and in-the-run and micro betting. Consultations with gambling service providers, problem gambling counsellors, focus groups and overseas regulators all provided interesting insights, but it is in the nature of this kind of information gathering that the evidence is necessarily anecdotal and partial. Furthermore, particularly with gambling service providers and to a lesser extent sporting bodies, the information they presented is self-interested. The table below provides a summary assessment of the evidentiary base. The primary sources of evidence are denoted by with useful secondary sources denoted by. What stands out in the table is the amount of blank space. For most questions, only a small number of information sources were useful as sources of evidence. This is not a criticism of those sources but reflects the new and evolving nature of online gambling. The Allen Consulting Group 6

20 Table 1.2 SOURCES OF EVIDENCE BY TERMS OF REFERENCE Source of Evidence Terms of Reference Research literature Roy Morgan data Gambling Service Providers Sporting Bodies Problem Gambling Counsellors Overseas regulators Focus Groups Access to Gambling 1. current prevalence of online gambling by Australians on Australian based sites and overseas based sites. 2. the relative prevalence of problem gambling amongst Australian online gamblers on both allowed and prohibited services 3. relative frequency of different payment methods used by Australian online gamblers using both allowed and prohibited services 4. problem online gambling risk factors 5. for those people that already gamble online, preferences to play on a regulated site if one was available rather than on an unregulated site 6. for those that do not currently gamble online, likelihood of gambling on a regulated site if a regulated site was available 7. effectiveness of different harm minimisation measures for online gambling including those adopted overseas as well as those suggested by the Productivity Commission 8. examples of best practice in other countries that have introduced regulated access to online gambling, including the architecture of regulation and taxation. 9. examples of best practice in other countries of limiting access to unregistered online gambling service providers 1. the prevalence of in-the-run betting and micro betting in Australia and overseas, whether using telephone or online betting services or other services In-the-run Betting The Allen Consulting Group 7

21 Source of Evidence Terms of Reference Research literature Roy Morgan data Gambling Service Providers Sporting Bodies Problem Gambling Counsellors Overseas regulators Focus Groups 2. the extent to which these types of gambling raise additional risks from a problem gambling perspective, including whether there are different problem gambling risks associated with betting on the final outcome of an event after the event has started compared to micro or ball by ball betting 3. the issues that arise from having different rules regarding the same services delivered online and via the telephone 4. approaches taken overseas to these types of online wagering, including regulatory measures, harm minimisation measures and measures to protect consumers and the integrity of sport 5. the extent to which permitting either of these two types of wagering online is likely to create a greater level of risk in terms of problem gambling, consumer protection and the integrity of a sports event 6. what additional measures might be applied to in-therun betting and micro betting to preserve the integrity of sports events and consumer protection Source: ACG analysis 1.5 A note on terminology In this report, a micro bet refers to a bet on a subset of an event that has been placed after the event has started, i.e., the bet has been placed in-the-run. In contrast, an exotic bet refers to a bet on a subset of an event that has been placed before the event has started. The Allen Consulting Group 8

22 Chapter 2 Policy context 2.1 The Interactive Gambling Act 2001 The objective of the Interactive Gambling Act 2001 (the IGA) was to minimise the scope for problem gambling among Australians by limiting the provision of gambling services to Australians through interactive technologies such as the internet. It is an offence under the IGA to provide certain interactive gambling services to customers physically located in Australia. This offence carries a maximum penalty of $220,000 per day for individuals and $1.1 million per day for corporations. It applies to all interactive gambling service providers, both based in Australia and offshore, and whether Australian or foreign-owned. Prohibited interactive services include providing customers via the internet games of chance, or games of mixed chance and skill. It is also an offence to advertise prohibited interactive gambling services in Australia. Figure 2.1 provides a summary of what is covered under the IGA. It is however not an offence for Australian customers to access and use prohibited interactive gambling services. Australian-based companies can also provide these services that are prohibited to people in other countries. The offences do not apply to all gambling services with some services exempt under the IGA: telephone betting services; certain wagering services (on horse races, harness races, greyhound races or sporting events) where the bet is placed prior to the event commencing; most forms of lottery services, except for online instant lotteries such as online scratch lotteries; gaming services provided to customers who are in a public place; services that have a designated broadcasting or datacasting link; a program or series of programs broadcast on a broadcasting service; programs or content transmitted on a datacasting service; certain contracts (including options and futures contracts) that are exempt from gaming; and any service declared exempt by the Minister. The Allen Consulting Group 9

23 Figure 2.1 ONLINE GAMBLING IN AUSTRALIA Source: DBCDE 2011 The IGA directs Australian residents or companies to complain to the Australian Communications and Media Authority (ACMA) if they believe that Australians can access prohibited internet gambling content. Complaints that are related to internet gambling material hosted in Australia and warrant further action are referred to the Australian Federal Police. Prohibited internet gambling content that is hosted overseas is investigated by ACMA, which may also notify the Australian Federal Police about unlawful overseas sites. 2.2 Review of the Interactive Gambling Act 2003 IGA Review The 2003 review of the IGA considered the following: the operation of the IGA; the growth of interactive gambling services; the social and commercial impact of interactive gambling services; the effect of existing exclusions; the effectiveness of the IGA in dealing with the social and commercial impact of interactive gambling services; technological developments that are relevant to the regulation of interactive gambling services; and technological developments that may assist in dealing with problem gambling. The review at that time found: Global interactive gambling continuing to grow, driven by strong consumer demand for both interactive gaming and sports betting services. The Australian interactive gambling industry remained small and was dominated by a small number of larger providers with a strong export focus. The Allen Consulting Group 10

24 The likelihood of internet gamblers being at risk of problem gambling was equivalent to comparable offline gambling services. Gaming services continued to present significant risks in terms of problem gambling. The use of interactive wagering services in Australia was growing and increased usage could potentially lead to a greater incidence of problem gambling. The main offence provision and the complaints system under the IGA had curtailed development of the Australian interactive gaming industry and been associated with the minimal use of internet gaming services by Australians. The majority of Australian internet gamblers used services permitted by the IGA. The IGA had therefore achieved its overall objective in minimising potential expansion of interactive gambling that may exacerbate problem gambling. Prohibitions on in-the-run and micro betting in-the-run should continue. URL (uniform resource locater) and IP (Internet protocol) address-based filtering techniques had not advanced to a point where they might be suitable for mandatory blocking of prohibited Internet gambling content at an Internet service provider (ISP)-level. Regulating financial transactions associated with the provision of interactive gambling services would be thwarted by a range of potential circumventions which would reduce its effectiveness Interactive Gambling Act Review Recently, reports by the Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA 2009) 2 and Productivity Commission (2010) have noted the change in the interactive gambling environment since the IGA was first drafted and indicated a need for a second review. The COAG Select Council on Gambling Reform was established to develop a national response to the findings and recommendations from the Inquiry Report on Gambling by the Productivity Commission (2010). The Department of Broadband, Communications and the Digital Economy was commissioned by the COAG Select Council to undertake the current review of the IGA. The review will consider the difficulties of enforcing the existing prohibition on certain types of online gambling and the growing number of Australian consumers gambling online in an unregulated environment. It will also review international regulatory approaches to online gambling and their potential applicability to the Australian context, and examine the ability to improve harm minimisation measures for online gambling services. The review of the IGA is intended to ensure that the prevalence of problem gambling in the online environment and gambling addiction in the Australian community is limited (DBCDE 2011). 2 The report looked at current services and accessibility, interactive gambler characteristics, regulatory and nonregulatory framework for harm minimisation and future trends in technology and regulation. The Allen Consulting Group 11

25 2.3 Other concurrent gambling reviews While the Department conducts the 2011 review of the IGA, there are other research projects and reviews in the area of interactive gambling being conducted by various organisations. Gambling Research Australia Gambling Research Australia has commissioned a national study to determine who, what, when, why and how people are gambling using interactive technology in Australia. The scope of this study includes: the full array of interactive wagering and gaming services such as: internet casinos (e.g. interactive slot machines, baccarat, roulette, craps etc.); internet poker games where players can play against each other online; internet sites for wagering; game play/wagering preferences of interactive gamblers (e.g. types of games, frequency, expenditure, preferred times of play etc.); medium preferences of interactive gamblers; motivations for interactive gambling; transition from terrestrial gambling to interactive gambling; demographic characteristics of interactive gamblers; current prevalence of interactive gambling in Australia; current prevalence of problem gambling in interactive gamblers; the contribution of the interactive medium to problem gambling; help seeking behaviours of interactive gamblers. Parliamentary Joint Select Committee on Gambling Reform The Parliamentary Joint Select Committee on Gambling Reform (2011) has recently completed an inquiry into the prevalence of interactive and online gambling and gambling advertising in Australia and the adequacy of the Interactive Gambling Act 2001 to effectively deal with its social and economic impacts, with particular reference to: the recent growth in interactive sports betting and the changes in online wagering due to new technologies; the development of new technologies, including mobile phones, smart phones and interactive television, that increase the risk and incidence of problem gambling; the relative regulatory frameworks of online and non-online gambling; inducements to bet on sporting events online; The Allen Consulting Group 12

26 the risk of match-fixing in sports as a result of the types of bets available online, and whether certain types of bets should be prohibited, such as spotbetting in sports which may expose sports to corruption; the impact of betting exchanges, including the ability to bet on losing outcomes; the implications of betting on political events, particularly election outcomes; appropriate regulation, including codes of disclosure, for persons betting on events over which they have some participation or special knowledge, including match-fixing of sporting events; and any other related matters. The inquiry also focused on gambling advertising specifically on the level of gambling advertising, the display of betting odds at venues and during match broadcasts, commentators referring to the odds and the general impact of gambling advertising on sport. This report takes into account and address the recommendations of the inquiry to the extent that it is applicable to address the terms of reference for this report (refer to Appendix A for more details). In particular, recommendation 8 states: The committee recommends that the attractions, risks and potential harms of online 'in-play' betting be the subject of appropriate research commissioned by the current IGA review being undertaken by the Department of Broadband, Communications and the Digital Economy. This report addresses the recommendation via a variety of information sources and approaches, such as through a survey of existing literature around in-play betting, international research on overseas jurisdictions, interviews with overseas regulators and sporting bodies, as well as consultations with industry stakeholders in Australia (including consumers, counsellors, sporting bodies and service providers). It should be noted that the ability to provide adequate research material to address the recommendation could be limited. This is because in-play betting is a relatively new type of online gambling (though small in market size) that has grown in popularity in recent years, as observed by service providers. Overseas regulators have only recently begun to address the issue. There is also limited research available that specifically addresses this subtopic of online gambling. The Allen Consulting Group 13

27 Chapter 3 The online gambling market 3.1 Introduction The use of the internet has grown over the last decade as the technology becomes mainstream. Access to the internet has become easy, affordable and considered a necessity. The internet can now be accessed from personal computers, smart phones and tablets, making it a most convenient medium for people to conduct their daily affairs including social networking, communicating, shopping and transactions with organisations (e.g. banking). The latest survey on internet activity 3 by the Australian Bureau of Statistics (ABS) showed that: At the end of June 2011, there were 10.9 million internet subscribers in Australia (excluding internet connections through mobile handsets). This represented an annual growth of 14.8 per cent and an increase of 4.4 per cent since the end of December In contrast, there were only 3.8 million internet subscribers in Australians continued to access increasingly faster download speeds, with 87 per cent of access connections offering a download speed of 1.5Mbps or greater. Mobile wireless internet (excluding mobile handset) connections (44 per cent) now exceed Digital Subscriber Line (DSL) connections (41 per cent) in Australia. Mobile wireless (excluding mobile handset connections) was the fastest growing internet access technology in actual numbers, increasing from 4.2 million in December 2010 to 4.8 million in June With regards to mobile handset connections, the ABS data showed that: At the end of June 2011, there were 9.7 million mobile handset subscribers in Australia. This was an increase of 18.1 per cent from December Of the 9.7 million mobile handsets subscribers, 3.6 million (37 per cent) were data subscriptions and 6.1 million were all other active standard mobile subscriptions. 5 The growth of internet usage provides people with opportunity to access services that are provided via the internet, including gambling services Australian Bureau of Statistics 2011, Catalogue No Internet Activity, Australia, June Australian Bureau of Statistics 2000, Catalogue No Internet Activity, Australia, September Australian Bureau of Statistics 2011, Catalogue No Internet Activity, Australia, June The Allen Consulting Group 14

28 3.2 Gambling as part of the growth of the Internet The number of internet gambling sites worldwide has increased from 24 in 1995 (Watson, Liddell, Moore, & Eshee, 2004) to over 2000 today. 6 These sites consist of approximately 700 online casinos, 500 poker rooms, 400 sports and race books, 300 online bingo sites, 50 skill game sites, 50 lottery sites, 30 betting exchanges, nearly 20 backgammon sites, and 5 mahjong and rummy sites. The international online gambling market was estimated to be worth US$29.3 billion in This was a 12 per cent increase from The market was also expected to grow by 14 per cent in 2011, driven by regulatory developments in some markets, and the continued growth in live sports wagering and mobile gambling (GBGC 2011). The Office of Economic and Statistical Research collects gambling statistics from all states and territories in Australia. The latest edition of the Australian Gambling Statistics (OESR 2011) showed that the total gambling turnover (at venues and interactive) in Australia in was $161,183,554. This comprised total racing turnover of $1,691,097, total gaming of $139,374,320 (excluding online activities since this is unlawful under the IGA) and total sports betting of $2,742,895. There is a paucity of data that measures the size of the Australian online gambling market even though some evidence was provided by the Productivity Commission (PC 2010), which noted that online gambling (including unlawful online gaming) has grown significantly and could amount to four per cent of gambling expenditure. It is further suggested by Gainsbury and Blaszczynski (2011) that sports betting is Australia s fastest growing form of gambling, something primarily attributed to the increased popularity of online gambling. The Productivity Commission estimated that there were around 424,000 Australia online sports wagering account in Australia in 2008, doubling the level from In 2008, an estimated $391 million was spent on online sports wagering by Australians, which represented a 73 per cent increase on 2004 levels. 7 The Productivity Commission also estimated that the Australian unlawful online gaming (including casino type games and poker) market was worth approximately $790 million per annum with 700,000 Australian online casino-type accounts active in 2008, representing 4.3 per cent of the adult population. This was double the participation rate estimated in 2004 of 2.1 per cent even though the estimate was similar to the prevalence rates in the United States (4 per cent) and the United Kingdom (3 per cent). 3.3 Forms of internet gambling There are two main forms of gambling types conducted over the internet, wagering and gaming. 6 7 Source: Care should be noted in interpreting these numbers as it is not an accurate representation of the proportion of the population that participate in online wagering as a person could bet with multiple accounts. The Allen Consulting Group 15

29 wagering includes racing and sports betting. Racing comprises betting on a horse race, harness race or greyhound race whereas sports betting is bets made on a sporting event. Wagering can be made on the outcome of the event, series of events or contingencies within an event. gaming includes playing poker, roulette and virtual electronic gaming machines as well as lotteries and keno. 3.4 Consumption of Internet gambling Demographic characteristics of online gamblers Several studies have examined the differences in demographic characteristics between internet and non-internet gamblers sampled from representative samples of adults 8 Taken together, the findings of these studies generally suggest that internet gamblers are more likely to be male, young adult, single, well educated, in professional/managerial employment, of higher income and of non-caucasian ancestry than non-internet gamblers. In the secondary analysis of 9,003 respondents from the 2007 British Prevalence Survey, Griffiths, Wardle, Orford, Sproston and Erens reported that being male was one of the most powerful predictors of internet gambling, whereby the odds of using the internet to gamble were 2.75 times higher among men than women. Characteristics predictive of reduced likelihood of internet gambling were being aged 35 and over, having no educational qualifications and being employed in manual labour. However, as discussed earlier, the literature does not always come up with consistent findings. For example, Wood and Williams (2009) found that being male, single, well educated and employed and earning a high income were strongly associated with internet gambling in Canada. Similar demographic characteristics are reported by studies of self-selected samples of online casino table gamblers (Griffiths & Barnes 2008; Hopley, et al. 2011; Hopley & Nicki 2010). Two surveys of self-selected Texas Hold em online gamblers (total of 241 participants) (Hopley, et al. 2011; Hopley & Nicki 2010) found that online card gamblers were overwhelmingly male (95 per cent), young (averaging 30 years old) and Caucasian. The rate of problem gambling was high (11.5 per cent and 9 per cent, respectively) in comparison to the rates of problem gambling reported by community studies. These data might suggest that online card gambling is a risk factor for problem gambling; however, it might simply be a function of the demographic that utilizes the internet for entertainment, i.e. young Caucasian men who are also more likely to be problem gamblers (PC 2010; Wardle, et al. 2011). The authors suggested that this was due to the relatively large proportion who were professional gamblers (approximately 34 per cent). 8 Gambling Commission 2008; Griffiths, Wardle, Orford, Sproston, & Erens 2009; Ialomiteanu & Adlaf 2001; Wood & Williams 2009) and self-selected samples (Griffiths & Barnes 2008; Hopley, et al. 2011; Hopley & Nicki 2010; Ladd & Petry 2002; Wood & Williams The Allen Consulting Group 16

30 Overall, the literature suggests the existence of a digital divide, whereby there are socio-demographically and technologically determined patterns of access and user capabilities in relation to the internet (Griffiths, Wardle, Orford, Sproston, & Erens 2009; Wood, Williams, & Lawton 2007; Woolley 2003). However, this divide may narrow as more people become more familiar with and have easier access to the internet, and websites adjust their design and marketing to attract a broader demographic. Studies of website use and online networks indicate that internet use is becoming increasingly socially heterogeneous (Bargh & McKenna 2004; Dimaggio, Hargittai, Neuman & Robinson 2001). In other words, while at present the characteristics of people who gamble on the internet may differ from gamblers generally, this could be because of the characteristics of people who are relatively intensive users of the internet, rather than the characteristics of the internet per se. It seems reasonable to infer though this is not yet borne out in the literature that as internet use becomes more ubiquitous and intensive in the population, the characteristics of internet gamblers will become more like those of gamblers in general. Consumption patterns in online gambling Another potential source of information on whether online gambling poses particular hazards in terms of problem gambling is the literature on online gambling consumption patterns whether online gamblers use multiple internet sites, where they are located when they gamble, why they gamble and whether there is any interaction between problematic use of the internet as such and problem gambling. These issues are potentially important if policies are going to be implemented with the objective of mitigating problem online gambling specifically, as opposed to problem gambling that just happens to be online. The literature on the game-play patterns of interactive gamblers is sparse and disjointed, in the sense that studies have been made of particular aspects of online gambling, but the literature is not yet sufficiently developed to draw general conclusions, or sufficiently robust, in itself, for robust policy recommendations McBride and Derevensky (2009) provided this information for a sample of 563 internet gamblers recruited through an online website. The findings revealed that internet gamblers tended to gamble on either one (33 per cent) or two to five (65 per cent) internet sites. Internet gamblers gambled for less than one hour (13 per cent), one to two hours (59 per cent), two to four hours (0.7 per cent), and more than four hours (27 per cent) each session. Most (86 per cent) reported gambling alone, 44 per cent with strangers, and 26 per cent with friends. Nearly all internet gamblers gambled from home (97 per cent), but some gambled from a friend s home (14 per cent), from work (13 per cent), or an internet café (10 per cent). Most internet gamblers typically gambled using a personal credit card (52 per cent), debit card (29 per cent), or bank transfers (27 per cent). Hopley & Nicki (2010) found that many Texas Hold em online gamblers were not engaged for entertainment or escape, but as a means of income and skill development. For 34 per cent of these young men, online poker was a means of income (either primary or supplementary income). An average of US$ was wagered per session and as much as US$45,000 was lost and US$1.6 million was profited overall by the sample. The Allen Consulting Group 17

31 There is also evidence that internet gamblers participate in a higher number of gambling activities than non-internet gamblers (Griffiths, Wardle, Orford, Sproston, & Erens 2009; Wood & Williams 2009), that most internet gamblers also gamble on non-interactive gambling activities (H. Wardle, personal communication July 2010; McBride & Derevensky 2009; PC 2010), and that internet gamblers have higher gambling expenditures than non-internet gamblers (Wood & Williams 2009). For example, Griffiths & Barnes (2008) found that among a predominantly young adult, student group, significantly more internet gamblers bet on races, sporting events, private games with their friends and gambled at a casino, and did so more frequently (60 per cent cf. 20 per cent gambled more than weekly). In fact, Wood and Williams (2009) found that the number of gambling formats was the most predictive factor of internet poker gambling and that internet poker gamblers engage in all types of gambling activity more frequently than their non-internet only counterparts. A recent study attempted to determine differences in the patterns of gambling that could differentiate between recreational and excessive internet sports betters through two taxometric procedures (Braverman, LaBrie & Shaffer 2011). Both procedures failed to demonstrate evidence of taxonicity using measures of total amount wagered, lost and bets per day. This, together with the findings of Lloyd, et al. (2010) suggest risk factors associated with gambling involvement centralize around features of the activities and polygambling. Most internet gamblers report their motivation for gambling online is simply the ease of access (including its 24 hour availability), flexibility of use and comfort of not being in venue (Griffiths & Barnes 2008; Woods & Williams 2009). Despite these perceived advantages of online gambling, Goh, Philips & Blaszczynsky (2011) suggested that people prefer face-to-face interaction and found that in games of roulette people will make riskier wagers than if they were video-linked with a croupier. Few studies have attempted to identify the contribution of the interactive medium to problem gambling. In their random telephone survey of 8,498 Canadian adults, Wood and Williams (2009) found that internet gamblers use the internet more frequently and for more activities than non-internet gamblers. In this study, a higher proportion of internet gamblers (75 per cent) than non-internet gamblers (53 per cent) reported using the internet daily. In the only study to employ measures of both problem gambling and internet dependence, Dowling and Brown (2010) found that there was no overlap between the populations reporting problem gambling and internet dependence, but that individuals with these disorders report similar psychological profiles. A similar approach is required to evaluate the rates of internet dependence characteristics in samples of internet gamblers. The Allen Consulting Group 18

32 To date, there has been very little research comparing interactive problem gamblers with non-interactive problem gamblers. Interactive problem gambling has been predicted by negative mood states after playing, gender swapping during play, and playing to escape from problems (Wood, Griffiths, & Parke 2007). Interactive problem gamblers are also more likely to be male (Griffiths & Barnes, 2008, in Griffiths et al. 2009). Wood and Williams (2009) identified several factors that statistically predict internet problem gambling, including gambling on a greater number of gambling formats, a higher gambling expenditure, having mental health problems, having a family history of problem gambling, being of Asian ancestry, being single, a lower household income, having a greater number of gambling fallacies, country/region, having more negative attitudes toward gambling, and having a history of other addictions. Further research is required to investigate the differences between traditional non-interactive problem gamblers and interactive problem gamblers. Roy Morgan Research Single Source Gambler Profile the Australian online gambler While the research literature offers some interesting insights, it is still fragmented and immature reflecting the fact that online gambling itself is a relatively recent phenomenon. In this section we report on Australian data on online gamblers and gambling. As shown below, the data allow us to drill down into some detail into the demographic characteristics of online gamblers and their spending patterns. However, the Roy Morgan data do not include any information on in-the-run or micro gambling, one of the key concerns of this Report. Roy Morgan Research s Single Source database surveys the Australian public on their consumption patterns, behaviours and attitudes over a wide ranging of topics including gambling. The database included only Australians aged 18+ who were interviewed between October 2009 and September A player profile analysis was conducted comparing the demographic characteristics, gambling attitudes, frequency of bets and gambling expenditure of five target groups of interactive/online gamblers with the general adult population and terrestrial gamblers (gamble but not online). The seven target groups included: Total Population 18+; Total Gamblers (last 12 months); Gamble but not online (terrestrial gamblers); Interactive Gamblers (online or phone); Gamblers (Wagering and Gaming); Gaming gamblers; and Wagerers. Detailed data tables of the player analysis are provided in Appendix C. The Allen Consulting Group 19

33 Demographic characteristics A comparison of the demographic characteristics of the seven target groups is provided in Table 3.1. Interesting points to note include: terrestrial gamblers were typically female while interactive gamblers were male; online gaming gamblers were on average younger, less educated and had a lower income than other types of gamblers; terrestrial and online gaming gamblers came from the lower socio-economic backgrounds; and interactive gamblers tended to be still paying off their homes with online gaming gamblers more likely to be in rental properties. In addition to the characteristics highlighted in the table below, gamblers in the seven target groups also share the following common characteristics. All were typically: Australian born; married or in de facto relationships; living with a partner and have children; work full time; work in a professional or managerial occupation; and considered big spenders in terms of discretionary expenditure 9. Gambling attitudes and spending Between 41.9 to 48.0 per cent of interactive gamblers, online gamblers and online wagerers typically decide on how much they were going to spend before they participate in gambling activities. The majority of these groups of gamblers (between 50.6 to 57.2 per cent) also had the attitude that they played to win. wagerers (51.0 per cent) reported the highest level of enjoyment from gambling regardless of whether they win or lose. When surveyed on their expenditure on leisure and entertainment (L&E) in the last seven days, between 78.3 to 93.1 per cent of individuals reported some L&E spend, with averages ranging between $ for total population 18+ to $ for online wagerers. Between 39.3 per cent and 67.2 per cent of individuals reported spending some of their L&E expenditure on gambling activities. The amounts spent on gambling activities ranged from between $14.16 (total population 18+) to $51.59 (online wagers). gaming ($29.91) gamblers tended to spend roughly the same amount as total gamblers (in the last 12 months) ($25.21) and people who gamble but not online ($25.13). More details on gambling attitudes and L&E spend are provided in Appendix C.3. 9 Individuals in the survey are classified as big, medium or light spenders. The Allen Consulting Group 20

34 Bet types and Mode of betting 17.4 per cent of individuals in the general population had placed a bet on the internet. Of those who have gambled in the last 12 months, 44.6 per cent had used the internet to place a bet. Not surprisingly, interactive gamblers (online or phone) and online gamblers (wagering and gaming) used the internet more extensively, at 79.3 per cent and 88.9 per cent respectively. When asked about the types of gambling (in venues and online) they had done in the last 12 months, the results were: The total population 18+ group revealed that 64.2 per cent of them had gambled in the last 12 months, with lottery/scratch tickets being their most preferred type of gambling with 55.8 per cent buying one. Total gamblers (last 12 months) and terrestrial gamblers (gambler but not online) groups indicated that their most preferred type of gambling was poker machines at 68.9 per cent and 69.9 per cent respectively. Gambling activity on poker machines was predominantly done at a venue rather than online. Eighty five per cent of online gaming gamblers on the other hand had played poker machines in the last 12 months, with 78.7 precent playing at venues compared to 54.3 per cent who have done it online. When questioned about their online betting in the last 12 months, the results indicated that: 21.9 per cent of the total population 18+ and 100 per cent of online wagerers had placed a bet in the last 12 months; between 21.3 per cent of the total population 18+ and 92.6 per cent of online wagerers had placed a bet on a race (includes horse racing, hardness racing and greyhound racing). Terrestrial gamblers (51.1 per cent) and online gaming (46.6 per cent) gamblers tended to favour race bets less; and 3.6 per cent of the total population 18+ and 50.6 per cent of online wagerers had placed a bet on a sporting event. 8.9 per cent of individuals who had gambled in the last 12 months placed a bet on sports, compared with 41.7 per cent of interactive gamblers, 43.7 per cent of online gamblers and 20.4 per cent of online gaming gamblers. More details on bet types and mode of betting are provided in Appendix C.4. Frequency and Bet spend Table 3.2 provides a summary of the frequency of bets (racing and sports) for individuals that have placed any bets in the last 3 months. For those individuals, the average number of bets placed over the period ranged from (total population 18+) to bets (online gaming). 10 Results relating to the online gaming group have to be read and used with caution. As the data relate to gambling activities in the last 3 months, the sample size across the board (across all 7 target groups) have decreased, in particular the online gaming group. Note that data analysis is performed on a sample size of 77 actual responses. The Allen Consulting Group 21

35 Results indicated that: The total population 18+ target group tended to place less than one bet per month. A similar trend is observed for the total gambler (last 12 months) and gamble but not online groups. Interactive gamblers and online gamblers (both online gaming and wagerers) tended to bet more often than gamblers in general, with the largest proportion (about 30 per cent) within each target group betting more than three times a week. Results for frequency of bets placed specifically on racing events indicated that across all target groups, the highest proportion of individuals placed bets on racing event less than once a month. A similar pattern is observed for bets placed specifically on sporting events except for online gaming gamblers (but note that results for online gaming must be treated with caution due to small sample size). Table 3.3 provides a summary of average bet spend when they last placed a bet in the last 3 months. Results showed: Across all target groups, the most common average spend on the last bet placed was between $5 and $ The majority of the individuals (more than 50 per cent of the sample) across all target groups tended to place less than $50 the last time they gambled. The most common average spend per last bet for a racing event is between $5 and $19.99 across all target groups. The same pattern is observed for bets placed on sporting events. The Allen Consulting Group 22

36 Table 3.1 COMPARISON OF GAMBLERS DEMOGRAPHIC CHARACTERISTICS Characteristics Total Population 18+ Total Gamblers (last 12 months) Gamble but not online Interactive Gamblers (online or phone) Gamblers (Wagering and Gaming) Gaming Wagerers Sample size 36,386 12,270 13,391 1,278 1, Population ('000) 17,187 6,724 6, Sex Female Male Female Male Male Male Male (50.9%) (51.3%) (51.0%) (72.5%) (72.5%) (62.8%) (75.7%) Average age Average income ($ 000) Average household income ($ 000) Education level Have Diploma or Degree (39.3%) Have Diploma or Degree (32.4%) Have Diploma or Degree (31.6%) Have Diploma or Degree (36.1%) Have Diploma or Degree (38.2%) Finished Year 12 (30.9%) Have Diploma or Degree (41.9%) Socio-Economic Scale AB Quintile D Quintile FG Quintile AB Quintile AB Quintile E Quintile AB Quintile (21.20%) (20.70%) (21.40%) (25.90%) (27.60%) (25.80%) (31.30%) Home ownership Own home Own home Own home Paying off Paying off Rent Paying off (37.2%) (36.0%) (37.3%) (40.1%) (41.2%) (48.7%) (44.7%) Source: Roy Morgan Single Source database The Allen Consulting Group 23

37 Table 3.2 FREQUENCY OF BETS (ON RACING AND SPORTS) PLACED IN LAST 3 MONTHS Characteristics Total Population 18+ Total Gamblers (last 12 months) Gamble but not online Interactive Gamblers (online or phone) Gamblers (Wagering and Gaming) Gaming* Wagerers Sample size 4,916 3,850 4, * 791 Population ('000) 2,393 2,214 1, Average no. of bets placed in last 3 months (+/- 0.83) (+/- 0.97) 8.92 (+/- 0.73) (+/- 2.48) (+/- 2.72) (+/- 9.33) (+/- 2.81) 3 times or more per week 11.0% 12.1% 6.2% 29.7% 30.2% 29.9% 31.1% Approx. 2 times a week 7.6% 8.2% 6.4% 13.0% 12.4% 15.8% 12.1% Approx. once a week 17.5% 17.7% 16.0% 24.1% 23.5% 14.8% 23.8% Approx. twice a month 3.3% 3.7% 3.2% 3.7% 3.9% 9.0% 3.8% Approx. once a month 5.7% 5.4% 5.5% 6.4% 6.7% 4.3% 6.9% Less than once a month 49.5% 47.5% 56.6% 21.0% 21.0% 24.5% 20.1% Can t say 5.4% 5.4% 6.2% 2.2% 2.4% 1.6% 2.3% Note: * Caution needs to be taken when reading the results from the online gaming target group due to small sample size (n < 100). Source: Roy Morgan Single Source database The Allen Consulting Group 24

38 Table 3.3 AVERAGE SPEND OF BETS (ON RACING AND SPORTS) PLACED IN LAST 3 MONTHS Characteristics Total Population 18+ Total Gamblers (last 12 months) Gamble but not online Interactive Gamblers (online or phone) Gamblers (Wagering and Gaming) Gaming* Wagerers Sample size 4,916 3,850 4, * 791 Population ('000) 2,393 2,214 1, Average total spend on bets placed in the last 3 months (+/ ) (+/ ) (+/ ) (+/ ) (+/ ) 1, (+/ ) (+/ ) $500 or more 0.3% 0.3% 0.2% 0.7% 0.6% - 0.6% $200 to $ % 0.7% 0.5% 1.5% 1.8% 5.6% 1.8% $100 to $ % 2.7% 2.1% 5.1% 5.0% 6.7% 4.9% $50 to $ % 8.4% 7.1% 11.5% 11.5% 10.5% 11.5% $20 to $ % 20.5% 19.6% 23.1% 23.4% 23.8% 23.5% $5 to $ % 45.4% 47.0% 40.7% 39.4% 40.8% 39.4% Less than $5 15.8% 15.2% 16.2% 13.8% 14.2% 8.6% 14.1% Can t say 6.6% 6.7% 7.3% 3.7% 4.1% 3.9% 4.1% Note: * Caution needs to be taken when reading the results from the online gaming target group due to small sample size (n < 100). Source: Roy Morgan Single Source database The Allen Consulting Group 25

39 Consultations with gambling counsellors The consultations with gambling counsellors provided insights which, while valuable, are anecdotal, and as such should be treated with a degree of caution. Furthermore, the clientele encountered by gambling counsellors (i.e. people with gambling problems) is dominated by terrestrial gamblers, so online gamblers tend not to be front of mind. It is likely that the on-the-ground knowledge gained by gambling counsellors will grow as online gambling grows in absolute terms and relative to gambling as a whole. Consistent with the research literature, Relationships Australia said in consultations that online gamblers they have encountered tend to be male, under the age of 40, well-educated and in a professional job. Traditional terrestrial based sports betting tend to all include an older clientele, not as well educated and most likely not in a professional career. Their electronic gaming machines (EGMs) clientele is more varied and more representative of the general population. The University of Sydney Gambling Treatment Clinic indicated that the use of online gambling is not as prevalent as venue gambling. There has been a general trend towards online gambling because access is easy and because of the availability of the enabling technology. It is a reflection of a general societal trend. The characteristics of online gamblers are generally younger people with the older generation preferring to go to physical venues or utilise the telephone to place bets. The Responsible Gambling Advocacy Centre noted that online sports betting gamblers were typically men under the age of 30. The characteristics of online casino table gamblers are more similar to terrestrial EGM players, with elderly females who live alone also engaging in the play. In Victoria, gamblers are quite multi-modal, but the evidence the Centre has so far suggests that online sports betting gamblers may only bet on sports. sports betting brings a new group of people into gambling who have not gambled before. This may be because there are skills involved in sports betting that do not exist with other kinds of gambling. Turning Point is preparing to undertake research on whether there are differences between terrestrial gamblers and people who prefer to place bets online. This will include demographics, severity of gambling, preferences in help seeking and presenting issues. However, anecdotal evidence suggests that people who prefer to place their bets online are more likely to be young males compared to middle to late aged people who experience problems with EGMs. Focus Groups The focus groups generated some interesting anecdotes, but no real surprises. The individuals participating in the focus groups indicated that in terms of gambling occasions, 25 per cent to 100 per cent of their gambling activities were online. Most individuals indicated that they did not gamble online five years ago. Participants attributed the growth of online gambling to the spread of internet connectivity, to more devices and faster connection speed, and greater trust in online transactions. Furthermore, people were no longer limited to dial-up modems and a desktop computer any longer. Gambling applications are available for the mobile phone, ipad, and internet-enabled television. The Allen Consulting Group 26

40 Sports (cricket, football, soccer) and horseracing were the most popular events for online betting. Specialty events like the Spring Carnival, the Melbourne Cup and the Rugby World Cup were also mentioned. There were also participants who engaged in online gaming activities such as Texas Hold em poker and blackjack. Most players were aware that gambling online could be done without wagering real money. Participants primarily gambled for fun, which they defined as wagering small amounts of money or money that has been budgeted or set aside for the occasion. Essentially, all gamblers thought gambling was fun in general. Participants indicated a preference if money was won but the fun element is always there because money enhanced the experience of the play. Participants thought that putting even a small amount of money on a team or a horse placed them in the game, and gave them a stake in the outcome. Betting intensified the interest gained in watching the event. Participant comments included: I gamble for fun, most of the time I only bet like a dollar a race because I just like to be part of it, watch the horses go round, just find out which horse I think might win, I might only win like four cents It s all fun. It s only not fun when you are losing and you have to explain where that money went. Otherwise it is all fun. Some participants played online games such as poker or blackjack for points or fake money. This was a way to learn the rules of the game (and it was not explicitly thought of as a gateway or stepping stone to wagering real money on online sites) as indicated in this quote: I got on the train when I m a bit bored I ll play blackjack. It s a free app on my iphone. You just. I ll muck around on the TAB and see what the races are on if there was any that I like, but the majority of the time yes I play blackjack just to learn a bit more. You play money, it s fake money, and so try and just to kill time, and then learn a bit more because you are playing against a player as well. One participant expressed distaste for gambling with points because it changed how one played or strategised about the game. One was more likely to go all in when playing for points compared to when real cash was at stake. Interestingly some participants were aware that the line between playing for fun and real money could blur when it is possible to sell game points on sites to other players for actual money. This was identified as unlawful and was discouraged as one participant commented: Even with play money I just remembered how I got into Full Tilt it was a friend at work because I was playing Zynga Poker which isn't real poker but she said you have got to download Full Tilt and play it. So I started playing that and she was earning enough play chips she used to sell her play chips for real cash which is a violation of the terms and conditions. Another factor in the discussion of playing for fun was that gambling sites offered free rolls and other enticement to join up. In other words, the site added extra free money onto whatever was deposited into the account when you signed up. Playing with that money was seen as playing for fun because it was free money as one participant explained: With poker playing free rolls. Where if there is free entry to possibly win something and you do it for the challenge and the enjoyment not gambling money necessarily.. They offer you things that are called free rolls where you play for the fun of it. It is free entry. The Allen Consulting Group 27

41 3.5 Prevalence of online gambling Introduction There is a small, but dedicated, literature examining online gambling which covers adult gambling, adolescent gambling, regional studies and other issues. 11 There is little information regarding other platforms of delivery such as wireless mobile devices (including phones) or digital/interactive television. Interactive television was first launched in the late 1990s in Hong Kong, Singapore, France and England. This service allowed viewers to use their remote controls to select movies on demand and to access internet-like services, such as interactive shopping, banking, video game playing, and gambling. Interactive television betting was introduced in Australia in This review examined online gambling with a focus on the activity (e.g. poker, EGMs, sports betting) rather than the platform used (e.g. poker via Facebook compared with a poker site). Research has reported cases where people have demonstrated characteristics of addiction to internet use including chat, social networking sites and games sites. The barriers between interactive online games and online gambling have begun to blur with the incorporation of gambling by social networking sites such as Facebook and interactive games such as Second Life. This blurring of social and gambling activities, and virtual and real identities offers a new level of complexity between the real and virtual, the true self and the avatar. However, research has suggested that internet addiction and internet problem gambling may be distinct conditions that share similar etiologies or consequences (Dowling & Brown 2010). The review presents data of online gambling participation and the risks associated with problem gambling among online gamblers, irrespective of the platform. Australian studies on participation in online gambling Interactive gambling remains a relatively small part (about four per cent) of the gambling market (PC 2010). It is difficult to determine the prevalence of interactive gambling in Australia. Prevalence surveys have generally separately measured the gambling activity and the media in which the gambling activity is performed. Most prevalence surveys have evaluated the more generic internet gambling amongst a range of other gambling activities. These studies are therefore unable to examine the gambling activities in which internet gamblers participate, such as gaming machines, poker, sports and the lottery, nor the modes of interactive media, such as mobile phones and digital television. 11 On adult internet gambling see Gambling Commission, 2008; Griffiths 2001; Griffiths, Wardle, Orford, Sproston, & Erens 2009, on national studies on adolescent internet gambling see Ipsos MORI 2009; Griffiths & Wood 2007, on regional studies of Internet gamblers see Ialomiteanu & Adlaf 2001; Wood & Williams 2007); see also studies on self-selected samples of internet gamblers (e.g., Griffiths & Barnes 2008; International Gaming Research Unit 2007; Matthews, Farnsworth & Griffiths 2009; Wood, Griffiths & Parke 2007), studies examining behavioural tracking data of Internet gamblers from online gaming sites (e.g., Broda, LaPlante, Nelson, LaBrie, Bosworth & Shaffer 2008; LaBrie, LaPlante, Nelson, Schumann & Shaffer 2007; LaBrie, Kaplan, LaPlante, Nelson & Shaffer 2008), internet gambling case studies (Griffiths & Parke 2007), studies examining specific forms of gambling such as online poker (Griffiths, Parke, Wood & Rigbye 2010; Wood & Griffiths 2008; Wood, Griffiths & Parke 2007), and studies examining internet gambling and social responsibility features (Griffiths, Wood & Parke 2009; Smeaton & Griffiths 2004). The Allen Consulting Group 28

42 Studies have indicated that many internet gamblers, particularly problem gamblers (Lloyd, Doll, Hawton, Dutton, Geddes, Goodwin, et al. 2010), are polygamblers (Griffiths, Wardle, Orford, Sproston, & Erens 2009; McBride & Derevensky 2009; PC 2010; H. Wardle, personal communication July 2010; Wood & Williams 2009). Research is required to explore differences between internet gamblers with different preferences in activity and interactive device. It may be that the mode of interaction with the gambling activity is largely irrelevant, so that, for example, an online poker player would not be significantly different from a land-based poker player in terms of their demographic or psychosocial characteristics, nor in their risk of problem gambling or treatment needs. Jimenez-Murcia, Stinchfield, Fernandez-Arandaa, Santamarıa, Penelo, Granero, et al. (2011) found that online problem gamblers did not significantly differ from non-online problem gamblers in any of a range of psychosocial risk factors or demographic characteristics, except that online gamblers had higher education levels, socio-economic status, gambled with more money and had higher debts. In the recent prevalence survey conducted by the Victorian Department of Justice (2009), 12-month participation on a range of gambling activities was evaluated separately from the media in which these activities occurred. While this study provides a very informative breakdown of the interactive gambling on each medium, the overall prevalence of the adult population participating in gambling activities via interactive media is not reported. The recent prevalence survey of Australian Capital Territory households was less comprehensive in its breakdown, however it did report an overall prevalence rate of internet gambling of 5.2 per cent (Davidson & Rogers 2010). In addition, they reported the proportion of adults who gamble on casino games, or bet on races or sports and chose to do so over the internet (1.0 per cent, 2.6 per cent and 2.5 per cent, respectively). The 2007 Tasmanian prevalence study reported that approximately 1.4 per cent of Tasmanians had gambled on the internet in the past 12 months (South Australian Centre for Economic Studies 2008). Significantly more internet gamblers were young men, in full-time employment with a high school certificate. Overall, internet gambling in Australia is rare; however there is some indication that participation may increase with improved bandwidth and more affordable and efficient smartphone technology. Table 3.4 displays the prevalence rate of interactive gambling reported in each of the most recent state-wide gambling surveys. An examination of this table reveals generally low prevalence rates of interactive gambling participation that are generally consistent with the rates in other countries, such as the United States (1.1 per cent) (Volberg, Nysse-Carris, & Gerstein 2006) and Canada (2.1 per cent) (Wood & Williams 2009). However, they appear to be much lower than other jurisdictions, such as the United Kingdom (6.0 per cent) (Griffiths, Wardle, Orford, Sproston, & Erens 2009). The Allen Consulting Group 29

43 Table 3.4 PREVALENCE RATES OF INTERACTIVE GAMBLING IN AUSTRALIA Study Victorian Department of Justice (2009) (n = 15,000) % of participants % of gamblers Computer games online/at home <0.1 <0.1 EGMs over the internet EGMs on a mobile phone <0.1 <0.1 Table games over the internet Table games on a mobile phone <0.1 <0.1 Horse/harness racing or greyhound betting over the internet Horse/harness racing or greyhound betting over the phone Horse/harness racing or greyhound betting on a mobile phone <0.1 <0.1 Sports and event betting over the internet Sports and event betting over the phone Sports and event betting on a mobile phone Keno over the internet <0.1 <0.1 Keno over the phone Lotto, powerball and pools tickets over the internet Lotto, powerball and pools tickets over the phone <0.1 <0.1 Scratch tickets over the internet Scratch tickets over the phone Bingo over the internet SMS competitions Phone in competitions Raffles/sweeps/competitions over the phone Raffles/sweeps/competitions over the internet Speculative stock investments online PGRTC epidemiological survey Victoria (2008) (n = 2,012) Internet gambling PGRTC epidemiological survey National (2010) (n = 3,953) Internet gambling South Australia Prevalence Survey 2005 (South Australian Department for Families and Communities 2006) (n = 17,140) Gambled on the internet Gambled via pay TV Horse/ dog race via internet Horse/ dog race via phone Sport bet via a TV channel <0.1 <0.1 Sport bet via internet Sport bet via phone The Allen Consulting Group 30

44 Study NSW Prevalence Survey 2006 (AC Nielson 2007) (n = 5,026) % of participants % of gamblers Internet casino games Bet on races via internet Bet on races by phone Bet on sporting event via internet Bet on sporting event by phone Tasmanian Prevalence Study 2007 (South Australian Centre for Economic Studies 2008) (n = 4,051) Internet gambling Horse racing by telephone Horse racing by internet Queensland Household Gambling Survey 2007 (Gambling Policy Directorate and Office of the Government Statistician 2008) (n = 29,923) Internet gambling Northern Territory 2005 Prevalence Survey (School for Social and Policy Research 2006) (n = 1,873) Internet gambling ACT Prevalence study 2009 (Davidson & Rodgers, 2008) (n = 2,059) Casino games for money Races, including horse or greyhound Sports betting Any internet gambling Note: Complete sample, n = 5,462 Source: Problem Gambling Research and Treatment Centre Conclusions It is difficult to draw definitive conclusions from the Australian studies on online gambling which have been conducted to date because there have been few of them, they have not used entirely consistent methodologies and they have been mostly state-based. Existing studies indicate that up to 5.2 per cent of the adult population gambles online. This is a larger percentage than that derived from the Roy Morgan database, which was 3.9 per cent. This difference could be due to methodological differences in the different survey types or because the studies discussed above are now somewhat dated, and so could have been accurate at the time they were undertaken, but do not reflect the prevalence of online gambling at present, or prospectively. With online gambling, particularly sports betting, growing rapidly, accurate estimates of prevalence will require regular national surveys. The Allen Consulting Group 31

45 International studies on participation in online gambling Wood and Williams (2009) found several differences in interactive gambling across different jurisdictions. For example, they found that the prevalence of internet gambling appears to vary significantly between countries and regions, with higher rates occurring in European countries and the Caribbean and lower rates in North America, Asia, Australia, and New Zealand. They also found that the prevalence of internet gamblers varied between Canadian provinces, ranging from zero per cent in Prince Edward Island to 8.2 per cent in New Brunswick. This study found that geographic location and province of origin were among the strongest demographic predictors of internet gambling. It also found that there were also several differences in demographic and psychosocial characteristics between Canadian internet gamblers and internet gamblers from other countries. Canadian internet gamblers were more likely to be male, retired, on sick leave or maternity leave, unemployed, of Aboriginal ancestry, less educated, with higher incomes, and younger than internet gamblers from other countries. They were also more likely to report higher levels of alcohol use and illicit drugs than internet gamblers from other countries. Perhaps again a reflection of jurisdiction differences, a survey of Ontario residents found that internet gamblers were more likely to be women, over 64 years old and previously married (Ialomiteanu & Adlaf 2001). Woods and Williams suggested no explanation for these geographical differences other than to mention that New Brunswick and Prince Edward Island are the only provinces in Canada that do not have casinos. An examination of the availability of gambling opportunities and internet accessibility in the jurisdictions surveyed might provide some insight and could indicate that harm minimization approaches may not have a great deal of international applicability and need to be tailored to the sociodemographic characteristics of interactive gamblers of each region or jurisdiction. To gain a more comprehensive understanding of such processes, it is vital that research is consistent and therefore comparable across regions. An indication of the influence of increased accessibility is the increasing participation rates of internet gambling reported by the British Gambling Prevalence Studies from 2006 to Rates of participation in interactive gambling in the past 4 weeks steadily increased from 7.2 per cent in 2006 to 11.1 per cent in This can be explained primarily by increased use of the internet to purchase lottery tickets; however sports and races betting also increased. Despite international concerns regarding the rise in popularity of poker tournaments, interactive gambling on poker tournaments, casino table games and gaming machines declined over this period (Wardle, Moodie, Spence, Orford, Volberg & Jotangia 2011). The Allen Consulting Group 32

46 However, as interactive gamblers on these forms are overwhelmingly young men (Griffiths, Wardle, Orford, Sproston, & Erens 2011; Hopley, Dempsey & Nicki 2011; Ladd & Petry 2002), it may be that the household sampling method utilised for the national study was unable to be sensitive to increased participation among a relatively small demographic group. Increased participation in interactive gambling overall was observed in both sexes; however, participation remained more common among males than females. Interestingly, participation increased in all age groups, however while in 2006 interactive gambling was most common among younger people, by 2010, twice as many year olds reported gambling online in the past 4 weeks (12.1 per cent cf. 5.2 per cent), which equalled the rate of participating among year olds in 2010 (12.1 per cent). Implications for Australia While international studies inevitably are influenced by factors that are specific to the countries being studied, it is noteworthy that they have found participation in online gambling to be increasing over time. Given the apparent rapid growth in online betting in Australia, the international evidence could serve as a predictor for what might emerge in Australia, after allowing for country-specific factors. Prevalence of in-the-run and micro betting There is no systematic Australian evidence known to the authors of this report on the prevalence of in-the-run and micro betting. Consultations with gambling service providers undertaken for this report suggest the prevalence is small, or at least the amounts that are gambled with these types of bets are small. Internationally, only a few countries specifically contemplate in-play betting in their legislation. (UK, France, Italy). However, there are other countries where the legislation is silent on the issue of in-play and the activity is offered under a licence. According to discussions with European regulators, there is an increased prevalence of betting where micro betting is allowed. However, at this stage there is little evidence around its impacts. It is worth noting that European bookmakers define an in-play bet as any bet that takes place within the course of a game, whether that is on score, numbers of corners, or likelihood of a goal within a prescribed time period. Up to 200 separate markets may be offered on each single event. Some bookmakers are inclined to term in-play betting as any bet which takes place within the course of a punter s online betting session. The terms micro betting or spot betting are not commonplace within the betting industry, nor are they widely used by regulators who oversee the betting industry. Instead the designation of spot or micro betting tends to be used by sports governing bodies, and offers the potential to create considerable confusion as socalled micro bets are inevitably a small and hard-to-define sub-set of total in-play betting, and far less significant in terms of market liquidity. Football dominates Europe s in-play betting markets and is, by some margin, the most popular sport on which bets are offered during the course of play. The Allen Consulting Group 33

47 A recent survey by United Kingdom research service GamblingCompliance showed that of a total of 795 event markets offered by the five leading UK bookmakers over the course of a representative period, 377 were on the outcomes of football (GamblingCompliance 2011). Tennis is the second most popular sport to be offered for in-play betting, with cricket, snooker and basketball trailing, but each with at least 20 individual markets on offer in the periods under review. The European online gambling market had annual revenues in excess of about 6.16 billion in 2008 (EC 2011) At the same time in-play betting is the fastest growing segment of bookmaker s offerings which for some bookmakers now accounts for more than half of their revenues on principal sports such as football. 14 In terms of specific bookmakers, United Kingdom bookmaker William Hill said in early August 2011 that in-play wagering had grown by 95 per cent in the first half of 2011, accounting for 63 per cent of total online sports book wagering, excluding horseracing. In-play gross win rose 68 per cent while the number of bets was up 111 per cent. Ladbrokes lags its main rival in offers of in-play betting but still asserted in its own results that in-play was now worth 49 per cent of non-horse race betting on its digital channel, up from 42 per cent in the first half of In-play stakes rose 7.7 per cent by bet size. Richard Glynn, chief executive at Ladbrokes further insisted in-play was now a key battleground for sports betting operators. At the start of 2011 online betting specialist Sportingbet said that in-play betting now accounted for 60 per cent of its total sports book wagers with amounts wagered on in-play up by 44 per cent year-on-year, generating net gaming revenues of 18.2m. In its full-year results for 2010, the company said in-play had been growing at 44 per cent per annum over the past three years. The swelling volumes of in-play betting transactions have grown in lockstep with the number of markets available to bet on, with the proliferation of third generation mobile networks and smartphone betting applications 15, and with the increasingly 24-hours a day nature of international televised sport. In the first-half results of Dublin-based bookmaker Paddy Power, published in late August 2011, the company said that with football it had doubled the number of inplay matches, rising to 3,000 per month in peak times. Ladbrokes said it would be delivering 28,000 in-play events over the course of 2011, with twice as many inplay events in football than was achieved in Other firms have offered similar accounts EC 2011, p.3. According to the most recent information available to this report s authors (which admittedly is somewhat dated, as it is from 2008), sports betting including horse racing accounted for 32 per cent of online gambling, casino games accounted for 23 per cent; poker accounted for 18 per cent, state lotteries accounted for 15 per cent and bingo and side games accounted for the remaining 12 per cent. GamblingCompliance s data analysts estimate that of the major sports betting operators, in-play now accounts for approximately per cent of all sports bets. Generally this does not include horse betting. Many bookmakers report triple-digit year on year rises in mobile betting. Warren Murphy at Sporting Index insists that the change in behaviour is being driven as much by technological advancement as anything else. When betting was all pre-match, punters and operators didn t need to be able to transact in real time. Now, betting opportunities come thick and fast during the course of any given sports event, and punters want to be able to react accordingly. The Allen Consulting Group 34

48 Focus Groups Discussions in the focus groups indicated that awareness of in-the-run and micro betting is still growing but interest is high. Respondents clearly wanted to hear more about it from more knowledgeable individuals in the group. Most had not engaged in these types of bets. A small minority of the participants had a firm command of the distinction between the two types of betting before definitions were read aloud during the session. Most participants understood more of what united the two forms of betting (i.e. the event is already underway when the bet is placed) than what distinguished them. While in-the-run betting is allowed under the IGA when placed by phone but not online, none of the participants voiced this distinction nor did the method of placing the bet feature strongly in the discussion. They were more interested in understanding the new and interesting betting opportunities these wagering options might offer to gamblers compared to conventional bets. I don t know it just seems like a lot of fun. Little things to bet on. One of the appealing features of such bet types was that once the game/race has started, one could see who was performing well or poorly. More informed bets could then be placed compared to standard pre-game wagering. The bet allowed people to be in the moment and therefore more involved in the sporting event. If you are watching the game and you can sort of give an idea of which way it is going to go, I want to be able to put a bet on that. I don't know if you can put a bet on that and whatever you thought was happening actually happened well you are going brilliant. When asked the difference between the buzz one got from micro bets versus traditional bets, a participant responded: Because it is putting you in the game I suppose instead of being a passive watcher, you still are a passive watcher but you are a little bit more involved. Because you want this particular person to get his hands on the ball. Participants cited the speed of internet connectivity as a key facilitator of in-the-run betting. If connection was slow (as it was before the availability of broadband), the event of interest for the bet in the game would already be past or the odds would be less favourable, or new information within the game would have changed the decision to place the bet. In-the-run betting would not be feasible under those circumstances. Some gamblers were cautious about in-the-run gambling and micro betting because they did not have enough information about it yet. It seemed a little frightening and risky. Service Providers In consultations, gambling service providers noted that in-the-run and micro betting are very small in Australia, with one saying that the average bet size is nine dollars. However, nearly all said that these types of bets are growing and that the market for them is huge overseas. The Allen Consulting Group 35

49 Since online in-the-run betting is not permitted under the IGA, this type of betting is not offered by gambling service providers, although there does appear to be uncertainty amongst service providers of the definition of an event for the purposes of keeping within the law. Service providers claimed to take a conservative view. Conclusions The evidence on the prevalence of interactive in the run and micro betting in Australia is minimal given that it is a prohibited service under the IGA when provided online. While gambling service providers offer this type of betting (within the constraints of the IGA) such as over the telephone, the amounts that are bet tend to be small. In discussions with gambling service providers, this type of betting is a small part of their business but growing quite fast. However, in the absence of any data, the significance of these claims is difficult to judge. The markets for these types of bets appear to be larger in Europe where they are allowed including online and this may be indicative of future growth in Australia. As with online gambling generally, the growth of in-the-run and micro betting could be tracked with regular national surveys. Findings Finding 1: Prevalence of online gambling by Australians (Access to online gambling TOR #1) There are no definitive studies which precisely quantify the prevalence of online gambling in Australia, because it is a relatively recent form of gambling and to date has been a relatively small part of the gambling market. Evidence from the Roy Morgan database indicates that around 3.9 per cent of the adult population gambles online. The prevalence of online gaming (which is prohibited under the IGA) is around 0.9 per cent of the adult population. gamblers make up around 9.4 per cent of all gamblers. This evidence is consistent with the gambling research literature that finds that interactive gambling is a relatively small part of the overall gambling market. Recent prevalence studies by state include Tasmania (1.4 per cent), Queensland (2.0 per cent) and the ACT (5.2 per cent). The evidence from the literature suggests there is a higher prevalence of types of online gambling that are permitted under the IGA (e.g. horse and sports betting) than types that are prohibited (e.g. table games). Evidence from focus groups suggests that a significant increase in the prevalence of online gambling over the past five years. Focus group participants mostly gambled on betting types that are allowed under the IGA but also on those that are not, such as Texas Hold em poker and blackjack. The Allen Consulting Group 36

50 Finding 2: Prevalence of in-the-run and micro betting ( In-the-run betting TOR #1) There is no academic literature yet on the prevalence of in-the-run and micro betting in Australia. In Europe in-play (i.e. in-the-run) betting has grown very fast and accounts for over half of non-horse racing on-line betting. According to discussions with gambling service providers, in Australia, this kind of betting is a small, albeit growing, part of the gambling market. Because of the legal suppression of online in-the-run betting (including micro betting), this type of betting does not yet appear to be front-of-mind amongst Australian gamblers. It is possible that, should in-the-run online betting be legalised in Australia, this type of betting would become as popular as it is in Europe. However, as a practical matter, this kind of betting becomes feasible only with very fast and reliable internet speeds, especially for short-lived events, such as microevents. Thus even if in-the-run and micro betting are legalised in Australia, their ability to grow to European levels could depend on the speed and quality of internet connections available to gamblers. 3.6 Payment methods The relative frequency of different payment methods used by Australian online gamblers using both allowed and prohibited services are discussed below. This section is informed by consultations with gambling service providers and with consumers of online gambling services via focus groups conducted in Melbourne and Sydney. Consultations with gambling service providers Consultations with six gambling service providers provided insights into the most frequently used online methods of payment through their various gambling websites. All online gambling bets placed via the gambling service providers websites are account-based transactions. Customers are required to register for an account online and top up their account using various payment methods. Most providers did not distinguish whether the preferred method of payment differs between their international and Australian customers. A summary of findings is provided below: The commonly acceptable methods of payment included credit card, POLI, BPay, electronic bank transfers, PayPal and cash. The majority of gambling service providers indicated that between 70 to 80 per cent of their customers top up their accounts via a credit card. The providers were unable to distinguish whether customers top up with a credit card or if a VISA/MasterCard debit card is used. The Allen Consulting Group 37

51 Usage of other payment types tended to be evenly spread. Sportsbet indicated that about five per cent of customers used BPay, five per cent paid via electronic transfer, five per cent via POLI and three to four per cent used PayPal. A growing payment method is via POLI or PayPal where the customer s bank account would be linked to their POLI or PayPal account, which is then used to top up their accounts with the gambling service providers. An exception to the trend was for customers who bet with Tabcorp. Customers preferred to top up via cash, which is possible at any TAB outlet. Sportingbet and Centrebet indicated that international customers preferred debit cards, followed by electronic cash transfer. Focus groups Individuals in the focus groups indicated that they tended to top up their online gambling accounts through a variety of ways including, via credit card, prepaid MasterCard, debit card, POLI, PayPal and bank transfer. Participants implemented different strategies when conducting transactions online on order to minimise being victims of fraud: You see I am a little bit different, I have got an online credit card that I don't, it is small and I don't use my major credit card online at all. Yes if they fraud that they fraud a little bit of money but you know I do the same thing. Just a different account to use online yes. Participants tended to view money in their online gambling account as their own money even if it was topped up using their credit card because they always paid off their credit card on time. A participant highlighted an advantage of using credit card:... I ve never had to pay a credit card off over is the time of 55 days, bang, so I am using their brass. Another participant highlighted a disadvantage of using a credit card:... interestingly in my bank is now as of next month they are going to make like putting money from your credit card into a gambling site, they are going to make that as a cash advance. And they charge you interest from that. A participant indicated that they would use different methods of payment when gambling on Australian versus overseas sites: I use overseas sites, I use PayPal, and in Australia I have got a debit card that has got no money in it and when I need to put money on my TAB account I transfer money into this card. It has five dollars in it until I top it up and then I put that straight into the TAB. The participant expressed the advantage of using a prepaid card: The prepaid ones you just throw away after you use them The Allen Consulting Group 38

52 Finding Finding 3: Relative frequency of payment methods (Access to online gambling TOR #3) The way Australian gambling online customers pay for their bets is by establishing accounts with gambling service providers. When bets are made, money is debited from these accounts, and winnings are credited to them. The majority (70 to 80 per cent) of customers establish and top up these accounts with credit cards. Other payment methods such as PayPal and POLI are small but growing in importance. The Allen Consulting Group 39

53 Chapter 4 Regulating online gambling 4.1 Prevalence of online problem gambling There are certain risks associated with internet gambling. With the ease, convenience and speed of accessing the internet, it is possible that consumers increase their consumption of gambling services through increased participation (see section 3.5) which might lead to an increase in problem gambling. This is explored below in the discussion of the literature. What is useful about this literature is that it explores the particular risks associated with online gambling per se. However, the literature is not definitive, because people who gamble online have different socio-demographic characteristics from gamblers in general, and so, for example, the apparent higher rate of problem online gamblers than gamblers on the whole could be due to a confluence of these characteristics and the nature of the internet. There is now an accumulation of evidence from both representative (Davidson & Rodgers 2010; Griffiths, Wardle, Orford, Sproston, & Erens 2009) and self-selected samples (Griffiths & Barnes 2008; Ladd & Petry 2002) that the problem gambling prevalence rate is significantly higher among internet gamblers than non-internet gamblers. In Victoria, a recently study reported that 8.17 per cent of moderate-risk gamblers and 4.67 per cent of problem gamblers gamble on casino table games online, compared with less than 1 per cent of non-problem gamblers. Non-problem gamblers reported past 12 month online EGM gambling, but 1.34 per cent of moderate-risk gamblers had done so, which was significantly more than nonproblem gamblers (Victorian Department of Justice 2009). In NSW, sports betting by phone or online was slightly associated with increased risk, however was more common among those who were experiencing fewer gambling related problems and too few reported internet casino gambling, so analyses were not conducted. The 2006 Tasmanian and 2010 Australian Capital Territory gambling prevalence studies estimated that approximately 10 per cent of internet gamblers in both states are moderate-risk or problem gamblers using the PGSI (scores of 3 or more). In comparison with international rates, the secondary analysis of the British Prevalence Survey 2007 data revealed that 5 per cent of interactive gamblers were classified as problem gamblers using the DSM-IV (scores of 3 or more) (Griffiths, et al. 2009). 16 As McCormack & Griffiths (2010) warned, problem gambling prevalence rates appear to be approximately 10 times higher among internet gamblers in a number of countries. According to Wood & Williams (2009), the United Kingdom had higher rates of internet gambling and median spend than Australia (indeed any other country reviewed), however it is difficult to state the rates of involvement or problem gambling in Australia with the relatively limited data available. 16 According to the 2010 British Prevalence Survey, 5.3 per cent of interactive gamblers were problem gamblers. However, since the 95 per cent confidence interval for this estimate was [3.6%, 7.6%] the small increase from 2007 to 2010 was unlikely to have been statistically significant. The Allen Consulting Group 40

54 It has been argued that the higher rates of problem gambling in interactive gamblers indicate that the medium of the internet is more likely to contribute to the development of problem gambling than offline media by creating a less protective environment for vulnerable gamblers (Griffiths 2003; Griffiths & Parke 2002; Griffiths, Parke, Wood, & Parke 2006; Griffiths, Wardle, Orford, Sproston, & Erens 2009; PC 2010). Interactive gambling could also increase problem gambling through its high level of accessibility and convenience and opportunities for convenience or impulsive gambling (PC 2010). Moreover, the distinction between games in terms of the speed of play and the amounts typically wagered may be reduced when they are played online (PC 2010). Because online gambling tended to involve small, but high frequency, wagers, variation in the risk profile associated with different types of gambling may be more compressed when played online, compared to physical venues. Problem gambling behaviour may also be exacerbated in relation to interactive gambling through the use of credit cards, the increased social isolation of the interactive environment, the ease of drinking and drug taking while gambling, the immersive quality of the internet, and lower levels of consumer protection (Griffiths 1999; 2003; Griffiths & Parke 2002; LaRose, Mastro, & Eastin 2001; PC 2010). In terms of characteristics usually associated with problematic gambling, Griffiths et al. (2009) found that internet gamblers were more likely to report gambling preoccupation and gambling to escape. In this study, 9.3 per cent of internet gamblers compared with 1.2 per cent of non-internet gamblers reported preoccupation with gambling and 4.7 per cent of internet gamblers compared with 0.4 per cent of non-internet gamblers reported gambling to escape. In contrast, it may be that the higher rates of problem gambling are a function of problem or regular gamblers participating in more gambling activities and employing the most convenient methods and mediums to gamble (Griffiths et al. 2009; PC 2010; Wood & Williams 2009; Wood, Williams, & Lawton 2007). This argument is supported by findings that internet gamblers participated in a higher number of gambling activities than non-internet gamblers (Griffiths et al. 2009; Wood & Williams 2009) and that most internet gamblers would predominantly gamble on non-interactive gambling activities (McBride & Derevensky 2009; PC 2010). There is also evidence to suggest that only 11 per cent of interactive problem gamblers nominated internet gambling as the activity that most contributed to their gambling problems (Wood & Williams 2009) and that problem internet gamblers were significantly less likely to prefer internet gambling than non-problem internet gamblers (Wood, Williams, & Lawton 2007). Taken together, these findings suggest that many regular and problem gamblers may gamble online when landband gambling services were unavailable, closed or temporarily inaccessible, or that regular or problem gamblers were likely to access all forms of available gambling and have added interactive gambling to their repertoire (Wood & Williams 2009; Wood, Williams, & Lawton 2007). If this were the case, then harm minimisation efforts would be best aimed at the risk and protective factors associated with gambling activities, irrespective of whether the activity is being undertaken with an interactive medium. The Allen Consulting Group 41

55 Internet gambling has presented researchers with the opportunity to obtain data of actual gambling behaviour. Recently, studies have reported the online wagering practices of gamblers who self identified with gambling problems. In order for customers to close their account with the website, they were required to select a reason for wanting to close their account. Those that indicated they closed their account because of concerns about losing control of their gambling were more likely to wager more frequently, intensively during a gambling occasion, with higher average wagers but greater variability in wager sizes (Braverman & Shaffer, 2010; LaBrie & Shaffer, 2011; Xuan & Shaffer, 2009). However, in the days before closing their account the size of their wagers increased and became more conservative as they bet on events with higher odds of winning. The researchers concluded that at this stage of their gambling careers, gamblers exhibited an involvement-seeking yet risk-averse tendency (Xuan & Shaffer, 2009). The comorbidity of psychological and physical health problems and problem gambling is well established in the literature (Desai, Desai & Potenza 2007; Lorains, Cowlishaw & Thomas 2011). Little is known about whether the prevalence or presentation of these health problems is different among internet gamblers, however the evidence to date appears to suggest that internet gamblers are a heterogeneous group. Lloyd, et al. (2010), clustered internet gamblers according to the online activities they predominantly gambled on (for a description of the clusters, see section 3.5). They reported large, significant differences between clusters in their severity of problem gambling (measured using the DSM-IV criteria for Pathological Gambling), mood disorders, gambling and non-gambling related self-harm and alcohol and substance abuse. While each cluster appeared to have a defining comorbidity profile, casino & sports betters and multi-activity gamblers were characterized by significantly higher levels of problem gambling severity, self-harm, mood disorders and alcohol and substance abuse than the other clusters. Consultations with gambling counsellors Consultations with gambling counsellors indicated that a very small portion of the clients they counselled have problems associated with online gambling. While counsellors are cognisant of particular issues associated with online gambling, the focus of gambling counsellors is still very much on the type of problem gambling that dominates among their clientele (terrestrial EGMs) and on measures to combat it, rather than online gambling, though they did have some suggestions about regulatory reforms (see section 4.5). Relationships Australia revealed clients with online gambling issues have always been a small percentage of their clientele, with a maximum of three to four per cent of their clients having online problem gambling issues, albeit this was a higher proportion than in earlier years. However, Relationship Australia said that the number of their clients with online gambling issues might have increased by 10 to 15 per cent over the past decade. They pointed out that there has definitely been an increase in parents enquiring about services, concerned about teenagers, mainly those aged 14 to 16 using sports betting. Relationships Australia has received six or so such calls in the last 12 months. The Allen Consulting Group 42

56 The University of Sydney Gambling Treatment Clinic indicated that there was no difference between the characteristics of online problem gamblers versus other type of problem gamblers when they accessed their counselling services. There has been a trend from wagering on horses to online sports betting. They noted that occasions where they encountered online problem gamblers, they tended to be relatively young people with relatively high levels of debt. These younger online gamblers tended to get into debt earlier by playing higher volumes, placing more and larger bets. Debt levels that used to take years to accumulate are now taking a shorter amount of time to accumulate. The Turning Point Alcohol and Drug Centre responds to around 15,000 gambling calls a year via its helplines including Gamblers Helpline Victoria, Gambling Helpline Queensland, Gambling Helpline Tasmania and after-hours facility for the Gambling Helpline Northern Territory. Between one and four per cent of callers cited problems associated with online gambling. People with problems associated with online gambling appeared to develop problems more swiftly, often describing large sums of money ($20,000 to $50,000) being spent in less than a year. The Turning Point Alcohol and Drug Centre also provides the national online counselling service Gambling Help. This service provides 24/7 access to real time chat or support with a trained gambling counsellor. Approximately eight per cent of clients cited problems with sports betting with a further 19 per cent engaged in wagering or casino games (6 per cent). The service attracts a different cohort of treatment seekers when compared to helpline or face-to-face services with just fewer than 60 per cent of clients aged less than 35 years, most of whom are male. The Turning Point Alcohol and Drug Centre indicated that the proportion of contacts associated with online gambling has increased over the past five years and remained steady over the past two years. However, current data collection methods for their helpline are probably not capturing the increased rate of internet gambling. In late 2010, the Turning Point Alcohol and Drug Centre introduced a new field for Gambling Help data collection called mode of gambling. This field has been refined over the past 12 months and asks clients to record whether their gambling is face-to-face, telephone, smart phone, laptop/pc or digital television. The most recent quarterly report based on 341 clients indicated that 82 per cent of these clients reported that their preferred method of gambling was in person in a venue (n=267). Seventeen per cent of clients preferred gambling via the internet, either on a PC/laptop (n=49, 15 per cent), or Smartphone (n=7, 2.1 per cent). Three clients preferred wagering via telephone betting and one client reported using a digital television to place bets (0.3 per cent). The Allen Consulting Group 43

57 With regards to potential harm to consumers that could result from online in-the-run and micro betting, only two gambling counsellor groups offered systematic views. The Responsible Gambling Advocacy Centre highlighted that in-the-run, microbetting was a particular problem. If this type of betting was allowed online, consumers would bet fast, and be prompted to make decisions very fast which could lead to wrong decisions being made. It is the potential intensity that is the issue. A phone call on the other hand would create some sort of lag, and some types of bets would be virtually impossible on a telephone. The Centre also pointed out that there was evidence that service providers sent consumers offers that were adapted around their betting profile, or when they were losing to tempt consumers to make more bets to offset their losses. The Turning Point Alcohol and Drug Centre noted that research suggested that increased access to EGM gambling is likely to be related to increased problems. It expected that increased access to in-the-run betting (including micro betting) via a smart phone or personal computer is similarly likely to increase access and incidence of problems. The anonymity of the online environment could reduce cues from others that the behaviour is deviating from the norm. It would also be easier to hide it from partners who may not notice a problem developing. In addition to misunderstanding the balance between skill and chance, betting that is done at home or from work may feel more comfortable leading the individuals to feel more in control (thus greater misinterpretation of odds). A representative from Relationships Australia said that one of her clients has a problem associated with in-the-run and micro bets on sports events. Risks from in-the-run betting on the event versus risks from micro betting The authors of this report could find minimal evidence of any differential gambling risks associated with betting in-the-run on the final outcome of an event vis-a-vis the risks associated with in-the-run micro betting noting that both activities are currently prohibited under the IGA when provided online. The research literature does not appear to have addressed the issue while problem gambling counsellors considered that micro betting could be conducive to problem gambling. Finding Finding 4: Relative prevalence of problem gambling amongst Australian online gamblers (Access to online gambling TOR #2) There has been minimal Australian research on the prevalence of problem gambling among online gamblers. What evidence exists is mixed. Some of it suggests that the prevalence of problematic online gambling is at about the same proportion as the prevalence of problem gambling in general; however, other evidence suggests that the nature of online gambling (e.g. small, high frequency wagers) makes it conducive to problematic behaviour. International evidence shows higher rates of problem gambling among online gamblers. The Allen Consulting Group 44

58 Consultations with overseas regulators Regulators from a few European jurisdictions (Italy, France, Belgium and Demark) were interviewed on their views on in-play and micro betting and the impacts that such bets may have on sports integrity and problem gambling. While most regulators offered views on the impact that these bet types may have on sports integrity, little was mentioned about how it related to problem gambling. Most regulators highlighted that there is little evidence linking in-play bets to match-fixing or sports corruption. The Italian regulator 17 (Amministrazione autonoma dei monopoli di Statothe AAMS) said that they did not have concrete evidence to prove that such bet types have an actual impact on sports integrity (i.e. match fixing) or problem gambling but noted that if they were prohibited, Italians would place such bets off-shore, removing the regulator s ability to closely monitor the betting patterns in order to identify possible match-fixing problems related to sports integrity. AAMS pointed out that regulating meant they have control, and eventually could enforce responsible gaming measures. The French regulator 18 (Autorité de Régulation des Jeux en Ligne ARJEL) offered similar views that no sports corruption had been proven to be linked to sports betting to date. ARJEL did not offer any views on problem gambling. The Belgium Gaming Commission 19 has yet to make a decision on regulating inplay betting but noted that the risk of match-fixing increased with live betting. They could confirm however that at this point, their policy is to ban micro bets.. Skatteministeriet (SKAT) from Denmark 20, which is the ministry in charge of taxation, commented that such bets increased the possibility of results manipulation. As to the incidence of problem gambling linked to such bet types, SKAT did not have any objective data to support any conjectures on this point Franceso Rodano, who is the Head of the Remote Gaming Department at AAMS was interviewed. Senator Francois Trucy was interviewed. Cécile Thomas-Trophime, who is the Head of Sport at ARJEL, also provided responses. Etienne Marique, President of the Belgium Gaming Commission was consulted. Kristian Wind, Gambling Expert from SKAT was interviewed. The Allen Consulting Group 45

59 The British regulator 21, the Gambling Commission (GC), noted that there was very little evidence linking problem gambling with in-play or micro bets. However GC offered this view: However, in-play betting allows more betting opportunities for a customer, whereas before they were restricted to betting on the outcome of the match. So what happens is when you offer more opportunities, you are getting closer to almost a gaming environment, where you can push a button and get a result. Some research points to the higher volatility, speed of play products, means you can spend more money. Things like lottery is only on once a week, it s not like you can chase losses. Therefore In-play brings betting a little bit closer to the gaming environment where you can push the button and get a result. The measures that we have designed for both the gambling and betting environments have been player spend limits, knowing transaction history etc., are designed to stop problem gambling no matter what the product is. We think that in-play betting is covered by the measures for gaming and betting, although we don t have any player protection measures specifically available for in-play betting, aside from educational such as the rules for each product and so on. A regulator should ensure that the measures in place for gaming are strong as they can also apply to in-play betting. We are looking at technology and how this affects the market and things like smart phones and tablets, we have provisions already for what we call restrictive display devices. You can t display the same array of rules and notices on a restrictive screen as you can on a computer, so there are certain work arounds where operators can put links to these notices. We re looking at this and will probably put it out to consultation to get some feedback on this. With regards to putting in measures to prevent problem gambling, GC noted: For problem gambling the measures we have are suitable for the wide range of products that we have. For the match fixing, the benefits of online transaction history also helps. It helps from a problem gambling perspective as well. They can view their history. You can only give the customer the tools to do it they ve got to want to set it themselves. The Norwegian regulator 22 (Norwegian Ministry of Culture) pointed out that in-play and micro bets were not allowed in their jurisdiction. They also highlighted that it was difficult to offer their views on the impacts of such bets on sports integrity and problem gambling, as they had no such experience. However they mentioned that if they were to make such bets available, the integrity of sports and problem gambling would be major points of evaluation Mark D'Andrea from the Gambling Commission was interviewed. D Andrea has served as the National Compliance Manager for Remote Gambling with the Gambling Commission for the last four years. Rolf Sims, who is the Gaming Regulator at the Norwegian Ministry of Culture was interviewed. The Allen Consulting Group 46

60 Finding Finding 5: Extent to which [in-the-run and micro] betting raise additional risks from a problem gambling perspective ( In-the-run betting TOR #2) Problem gambling counsellors, and other stakeholders, believe that the intensive and anonymous form of in-the-run betting online, such as micro betting,, could lead to problem gambling risks that are over and above those associated with terrestrial gambling. The British Gambling Commission also noted that in-play betting could begin to look like a gaming environment. 4.2 Risks factors associated with problem online gambling There are different risk factors associated with participating in online gambling compared to more traditional terrestrial gambling and accessing the different forms of online gambling such as online poker, casino table games (e.g. roulette) and online sports wagering. These are further explored in the sections below. Psychological, social and environmental risk factors for problem gambling among online gamblers The factors associated with prevalence of online problem gambling were discussed in the previous section. That discussion was primarily focussed on the characteristics of the online gambling environment which are conducive to problem gambling. This section discusses the risk factors associated with the gamblers themselves which are likely to be associated with problem gambling. It is a different strand of the research literature than discussed in the previous section, though they do overlap. Few studies have explored the psychosocial characteristics of interactive gamblers. In a secondary analysis of the findings from the 2007 British Gambling Prevalence Survey, Griffiths, et al. (2011) reported that both internet and non-internet gambling were significantly associated with smoking status and alcohol consumption. Internet gamblers were significantly more likely to drink more heavily than non-internet gamblers. In fact, drinking at least twice the daily recommended intake of alcohol in one day was one of the most powerful predictors of internet gambling. In this study, the odds of using the internet to gamble were 1.41 times higher for those who drank more than double their daily recommended intake of alcohol than those who did not drink alcohol and 2.40 times higher among those who drank over four times their daily recommended intake of alcohol in one day than those who did not drink alcohol. In this study, general health status was not associated with internet gambling. The Allen Consulting Group 47

61 Wood and Williams (2009) reported that 39 to 44 per cent of internet gamblers used tobacco and 12 to 23 per cent used illicit drugs. However, they had relatively low rates of physical disabilities and/or chronic health problems (7 to 15 per cent) and mental health problems (5 to 10 per cent). Interestingly, while drug use was statistically associated with internet gambling, an absence of physical disabilities/chronic health problems and mental health problems were significantly associated with internet gambling. In this study, 14 to 20 per cent of internet gamblers reported using alcohol often or always while gambling and 4 to 7 per cent of internet reported using illicit drugs often or always while gambling. Similarly, in a study of 563 internet gamblers recruited through an online website, McBride and Derevensky (2009) found that 45.0 per cent of internet gamblers reported consuming alcohol while gambling online, 33.2 per cent reported using tobacco while gambling, 8.8 per cent reported using marijuana or hashish while gambling, and 3.8 per cent reported using other illicit drugs (e.g., cocaine) while gambling. In this study, problem internet gamblers were more likely to use alcohol or other drugs while gambling online than non-problem gamblers. These findings were of concern given that the use of alcohol and drugs may result in distorted decision-making, particularly in relation to setting and upholding limits on gambling behaviour. They also had implications for the role of harm minimisation strategies adopted by internet gambling service providers and the development of effective interventions for interactive gamblers. When comparing internet to non-internet gamblers, internet gamblers were significantly more likely to rate problem gambling criteria more highly and drink alcohol more heavily, but less likely to smoke. There were no significant differences between the groups in their general health (Griffiths, Wardle, Orford, Sproston & Erens 2011). Further research is required to examine internet gamblers in comparison to non-internet gamblers, while taking in to account heterogeneity within both groups. Findings of such research will help to inform the design of harm minimization strategies and treatment programs that would be most effective at targeting internet and land-based moderate-risk and problem gamblers. Both theoretical and empirical research has suggested that there may be many motivations specifically associated with interactive gambling. Using qualitative and quantitative data collected from an internet-based survey of 1,920 internet gamblers, Wood, Williams, and Lawton (2007) grouped these motivations into four categories: the relative convenience, comfort, and ease of interactive gambling; an aversion to the atmosphere and clientele of land-based venues; a preference for the pace and nature of interactive gambling; and the potential for higher wins and lower overall expenditures when gambling online. The Allen Consulting Group 48

62 Convenience, comfort, and ease of interactive gambling Convenience refers to gambling opportunities being accessible at any time of the day with minimal effort, ease refers to sites and games being easy to find, join, and play, and comfort refers to the benefit of gambling from the comfort of one s own home (Wood, Williams, & Lawton 2007). As discussed in this report, a critical feature of online gambling, which distinguishes it from terrestrial gambling, is its convenience. 23 Aversion to the atmosphere and clientele of land-based venues Other reasons relate to the perception of the ambience and clientele of land-based venues. These motivations included more privacy, an aversion to smoke, an aversion to noise, an aversion to crowded environments, an aversion to the clientele of land-based venues, and physical safety (Griffiths 2001; McBride & Derevensky 2009; Wood & Williams 2009; Wood, Williams, & Lawton 2007), although some internet gamblers have reported a preference for face-to-face interaction (McCormack & Griffiths 2010). Preference for the pace and nature of interactive gambling Other motivational factors seem to be related to the intrinsic nature of the online gaming experience. Factors related to a preference for the pace and nature of interactive gambling include the ability to customise the rate of play (faster or slower), increased event frequencies, smaller intervals between bets, instant reinforcements and the ability to gamble again immediately. They also include, inter alia, more game diversity, the graphics and interactivity, the immersive qualities of the internet, ability to multi-task (e.g., gambling while surfing the web, listening to music, etc.), playing multiple games, increased anonymity, less intimidating environment and the ability to pretend to be the opposite sex (Griffiths 2001, Griffiths & Barnes 2008; McBride & Derevensky 2009; McCormack & Griffiths 2010; PC 2010; Wood & Williams 2009; Wood, Williams, & Lawton 2007). There is no evidence that gambling service providers have taken steps to address the speed of play, e.g. how many hands of cards customers play in a certain time, or how many players customers are playing against. Potential for higher wins and lower overall expenditures when gambling online The evidence for motivations related to the potential for higher wins and lower overall expenditures when gambling online is less strong (Wood, Williams, & Lawton 2007). These motivations included better odds, allowance of lower bets, smaller losses, and lower travel and meal expenses (Griffiths, et al. 2009; McBride & Derevensky 2009; PC 2010; Wood & Williams 2009; Wood, Williams, & Lawton 2007). 23 There is a large literature on convenience. Factors related to the relative convenience, comfort, and ease of interactive gambling included the increased number of gambling opportunities, 24-hour access and flexibility, proximity, access to bank accounts, the comfort of one s own home, the ability to smoke at home, the ability to drink inexpensively at home, faster as do not have to travel, living too far from a land-based venue, having a physical disability, not having to drive, illegality of land-based gambling, and multilingual services (Griffiths 2001; Griffiths & Barnes 2008, Griffiths & Parke 2007; Griffiths, Wardle, Orford, Sproston, and Erens 2011; MacKay 2010; McBride & Derevensky 2009; McCormack & Griffiths 2010; PC 2010; Wood & Williams 2009; Wood, Williams, & Lawton 2007). The Allen Consulting Group 49

63 Barriers to interactive gambling While there are risk factors associated with online gambling, there also appear to be barriers to interactive gambling, including: the inability to obtain valid credit or debit cards and the inability to receive credit; the absence of the physical transaction of collecting wins and concerns about unscrupulous business practices with a fear that winnings will not be paid out; poor harm minimisation features; lower levels of regulation; no natural control of venue closure; not wishing to use credit to gamble fearing inadequate security of credit card information; higher levels of social isolation; higher addictive potential; and the ease of drinking or taking drugs while gambling. Other barriers to participate in interactive gambling include fear that monetary deposits will not be returned, increased monitoring by significant others, not wanting to see evidence of gambling transactions on credit card statements, being too tempted to gamble, lack of human interaction, lack of human non-verbal playing behaviour, reduced authenticity of play, the lack of reality of electronic money, lack of access to interactive technology (personal computer, mobile phone, digital television), difficulty verifying fairness of games, tendency to spend more money, finding the media too convenient, and illegality of interactive gambling (Griffiths 2001; Griffiths & Parke 2007; McBride & Derevensky 2009; PC 2010). Submissions to IGA Review Submissions made to the Review highlighted risks factors associated with in-therun and micro betting: Clubs Australia submitted that there is sound reasoning for prohibiting interactive forms of this type of betting, given that it is continuous in nature and potentially very addictive for susceptible gamblers in an online environment. The addictive nature of such bets is due to the high rapidity that they enable, especially under a credit-enabled environment. 24 Racing and Wagering WA submitted that it did not support any changes to the IGA which would facilitate the introduction of online in-the-run micro betting as such offerings would allow customers to wager more frequently and on propositions which become less form based and more a game of chance. Such bets can lead to greater risks of problem gambling and sporting integrity concerns. 24 It should be noted that to the extent that online gambling competes with terrestrial gambling (which is mainly electronic gaming machines) in an overall gambling market, Clubs Australia s submission reflects the commercial interests of its members.. The Allen Consulting Group 50

64 The Responsible Gambling Advocacy Centre is opposed to any change in the rules that would allow live or in-the-run bets to be made available online, as it would increase the speed, ease, and impersonality with which such bets can be made. The Centre submitted that these were factors that could contribute to increased risk for gamblers. Risk factors associated with different types of online gambling The authors of this report could not find any evidence about whether there are different risk factors associated with different types of online gambling, such as online poker games or sports wagering. Need for more research Research to date has tended to focus on blunt comparisons between interactive and non-interactive groups and treated these as homogenous groups. However, research increasingly shows that, for many, interactive gambling is part of a broader pattern of gambling behaviour that also includes non-interactive gambling (PC 2010). For example, analyses of the data from the 2007 British Prevalence Survey suggested that only about 8 per cent of interactive gamblers in a random community survey would gamble exclusively on interactive media (H. Wardle, personal communication, July 2010). The Productivity Commission (2010) stated that the ideal study would compare interactive and non-interactive gambling by type of activity due to this heterogeneity in gambling activities. While the small number of interactive gamblers in representative samples generally makes this difficult, there is a need to analyse the issues using a more nuanced definition or taxonomy of interactive gambling subtypes in order to better understand how interactive gambling exists within a fuller taxonomy of gambling behaviour, rather than viewing interactive and non-interactive gambling as a dichotomy. The Allen Consulting Group 51

65 Finding Finding 6: Problem online gambling risk factors (Access to online gambling TOR #4) Studies have identified that the risk factors associated with problem online gambling include high level of accessibility and convenience and opportunities for impulsive gambling; the use of credit cards; the increased social isolation of the interactive environment; the ease of drinking and drug taking while gambling; the immersive quality of the internet; and lower levels of consumer protection. gambling offers convenience, comfort and easy access, but this is true for both problem and non-problem gamblers. More research is needed to distinguish between problem gambling that happens to be online and gambling where the problem occurs because it is online. 4.3 Sports integrity associated with in-the-run and micro betting This section addresses the impacts of online betting especially in-the-run and micro betting as well as additional measures that might be applied to preserve the integrity of sports events. Five Australian sporting bodies were consulted on their views on these issues. Australian context Micro bets and integrity issues The Australian Football League (AFL) does not support micro bets. The AFL has integrity agreements with all Australian betting operators whereby the AFL can approve bet types offered by gambling operators. The AFL can approve the bet type dependent on the ability to easily manipulate the result, reputational risks, other risks and integrity issues. They are also able to impose safeguards if a bet is offered e.g. set play limit on maximum winnings from that particular type of bet. In horse racing, according to the Australian Racing Board (ARB) micro bets are uncommon because it is difficult to place bets on races after they have started, given that races usually last for only a couple of minutes. However, exotic bets (which are placed before the race) do exist. Exotic bets usually relate to betting on winning margins. The ARB noted that on occasions where the odds were low on the outcome of the race (e.g. betting on Black Caviar to win), people started to focus on margin betting, where the bet would be on the horse to win by a certain number of lengths, or they would bet on sectional times. The ARB noted that these types of bets were usually used by professional punters and bookmakers to offload their risks. Currently, there is only a low level of use for racing and liquidity in these pools is low in Australia but higher in the United Kingdom. The Allen Consulting Group 52

66 The ARB however is concerned about exotic betting and how it could link to integrity problems. The Jockey Board and Trainers have identified exotic margin bets (e.g. on wins by length and sectional times) as potentially problematic. Stewards have recommended to governments that exotic bets not be permitted in racing due to integrity issues. Such bet types would also be hard to investigate and breaches of integrity difficult to prove. For example, if a horse is already winning its race, a jockey could slow it down in order to win by the number of lengths required for the exotic bet. This breach of integrity would be difficult to prove, especially when the horse wins the race. Based on these considerations, the ARB would prefer bets on outcome rather than exotic bets. The Australian Rugby Union (ARU) expressed concerns over some forms of in-therun and micro bets. However, the ARU has integrity agreements with gambling operators and hence has control of bet types offered. The ARU can veto bet types such as key player scoring most points against another key player in the same position from the other team. The ARU felt that there is no increased integrity risk if bets were allowed after the start of a match compared to before the start of the match. It would be all part of the game unfolding. However, they identified that there was a need to protect the sport and the public need to feel that they were watching a fair and clean game. If not, people would not watch or buy tickets to the game. Netball Australia indicated that they would veto any micro or exotic bets proposed by betting operators in the future once they have integrity agreements in place. Netball Australia is not in favour of allowing bets on turnovers or what a player can or cannot do. Some bets such as first coach to be sacked could also impose reputational risks on the sport. It would not be not a good look or feel for the game if such bets were allowed. Platform neutrality Across the board, the sporting bodies were in agreement that regulation of the mode of placing bets should be platform neutral. Netball Australia indicated that regulation should be technology neutral. The ARU expressed the view that there would be no increase in integrity risk if inthe-run and in-the-run micro bets were allowed online. There was no logical reason to separate the platforms. The ARU felt that technology has got ahead of the legislation. Betting at venues, on the phone or online would not change any integrity risk. The ARB had no issues with whether bets are made online or via the phone. There was no difference and they could not see the distinction and hence there should not be different rules. The Allen Consulting Group 53

67 Current measures to safeguard integrity Most sporting bodies 25 have integrity agreements with gambling operators that allowed them to veto any bet types that they felt were unsuitable for their sport. The integrity agreements also had an information sharing arrangement. The AFL and ARU would provide information to the betting operators about players, coach and staff. If these people placed a bet, then the betting operators would inform the sporting bodies. The betting operators would also inform the AFL when a suspicious bet was placed or if there was a suspicious betting trend on any unusual bet. The sporting bodies also received a return from the gambling operators as part of the information sharing arrangement even though it is currently a small amount. For example, the ARU received about $100,000 to $150,000 per annum but this did not cover the costs of having a team that looked after integrity issues. Most sporting bodies have education programs for their players. The AFL makes presentations to their first time footballers on gambling awareness and on how to protect their welfare. The presentations involved past footballers presenting on gambling issues. The ARU works closely with players to make them understand their obligations such as no gambling on rugby on games they were 'connected' (directly or indirectly) to and explaining to the players the pitfalls of becoming a problem gambler. Netball Australia currently only has rules against players betting on the competition or for any match that they play in. Players are not allowed to bet on the domestic competition but can bet on the international competition. Netball Australia has plans to tighten their rules and extend them to staff and coaches. The AFL has an integrity department with two to three dedicated staff managing integrity issues associated with players and officials. The integrity department maintains a database and also conducts investigations. They also manage drug policies. The ARU has an integrity manager and takes a proactive approach to tackling integrity issues. Some sporting bodies such as the ARU and Netball Australia are bound by international rules from their respective international sporting bodies. In the case of the ARU, there are international rules on wagering. Additional measures The ARB said that integrity agreements should be legislated, with betting agencies compelled to sign integrity agreements with sporting bodies so that sporting bodies are equipped with the power to decide over bet types offered. However, the ARB noted that even legislation would not cover all operators because overseas operators would not be required to comply. The ARB also proposed the use of financial transaction blocks as the US experience showed that they could be a significant force and could be useful. An alternative arrangement was to open up the online gambling market (following the French experience) where operators are required to take up a licence or face ring fencing arrangements, ISP blocks and bans on advertising. The ARB favoured a licensed and regulated model. 25 The ARB does not have such integrity agreements. Netball Australia is in the process of applying to become the netball sporting control body. Once they have approval, they will enter into integrity agreements with the gambling operators. Netball Australia is aiming to have such agreements in place in The Allen Consulting Group 54

68 Netball Australia proposed: an overarching framework that captures all types of betting; consistency in language across all regulation (e.g. definitions and terminology); ensuring consistency and complementary across the different reviews being conducted with all reviews being crossed referenced; regulation or legislation being open to all technologies, being technology neutral and recognising convergence of technologies; account based betting; and the mirroring of the Victorian legislation on the requirement for integrity agreements between sporting bodies and betting agencies mirrored in other states and territories. With respect to this last point, it should be noted that the National Policy on Match Fixing in Sport, which was agreed by Commonwealth, State and Territory Sport and Recreation Ministers on 11 June 2011, does mirror the provisions of the Victorian Gambling Regulation Act (2003), under which all betting agencies offering bets on Victorian events to obtain the approval of the controlling body of the relevant sport. Under this policy, Sporting organisations or Sport Controlling Bodies must develop and enter into national integrity agreements with betting organisations in relation to the provision of betting and information sharing on the sport involved by July 2012; and Betting agencies must (i) adopt an industry standard for information exchange and information provision requirements with sports, governments and law enforcement agencies by July 2012; (ii) develop and enter into national integrity agreements with sporting organisations in relation to the provision of betting and information sharing on the sport involved by July In-the-run betting over the telephone The authors of this report did not find any evidence in the academic literature on whether in-the-run and micro betting over the telephone poses any risks that are different from placing these types of wagers online, in terms of problem gambling, consumer protection and the integrity of sport. Gambling service providers noted that it is generally easier and quicker to place a bet online than over the telephone. Problem gambling counsellors noted that the anonymity of the online gambling environment was relatively conducive to problem gambling, but they were making the comparison to a physical gambling environment. It could be hypothesised that online gambling is more conducive to problem gambling than telephone gambling because the former is easier to do (a few key strokes rather than a telephone call), but there is no evidence to this effect. There is also no evidence about whether telephone or online channels are associated with different consumer protection or sports integrity risks associated with in-therun or micro betting. The Allen Consulting Group 55

69 Analysis Australian sporting bodies reluctantly accept the existence of online gambling on their sports but do not embrace it (apart from the Australian Racing Board, which is in a different position as racing is largely funded by the taxation of gambling). They all seek (or have already in place) agreements with gambling service providers in which information is exchanged for the purposes of maintaining the integrity of their sports. All recognise that since online gambling on their sports is here to stay, it is better for it to exist in a regulated environment. These bodies all see potential dangers to the integrity of their sports from micro betting (or exotic betting) 26, but not online micro betting (or exotic betting) as such, because the integrity danger comes from the existence of micro or exotic betting, not whether such bets are placed online. Furthermore, sports bodies did not see that micro bets pose any additional danger vis-a-vis them being exotic i.e. placed after the event has started rather than before. Sports bodies see it as their role to define an event for the purposes of regulating inthe-run betting Sporting bodies are also looking for consistent national regulation of online betting, as it affects them. The concerns and approach of the sporting bodies appear to be legitimate. Their primary concern is the integrity, and just as important, the perceived integrity of their sports. While online gambling poses a small opportunity (in terms of revenue), for the most part the impression gained by the authors of this report is that the sporting bodies view gambling (of which online gambling is a small but growing part) as a potential threat, over which they are doing their best to exert some control, but where they do not have complete control. International context In their submissions to the European Commission Green Paper consultation, Europe s principal sports bodies asserted their concerns over the proliferation of inplay betting and micro betting and also outlined the measures which are being taken to limit harm caused by possible match fixing (European Union Elite Athletes Association 2011). So far the relationships between sports governing bodies and the betting industry have typically taken the form of player education and memoranda of understanding under which betting organisations agree to provide information and suspicious betting activities or unusual betting volumes are reported directly to the sport concerned (similar to the integrity agreements between Australian sporting bodies and gambling operators). Player education In their submissions, a number of sports, including EU Elite Athletes, asserted the importance of player education noting: Participants are the only ones who can fix a sporting competition. It is vitally important that athletes are educated about the issues surrounding sports betting integrity to protect the integrity of sport and also sports betting markets. 26 Recall that a micro bet is a bet that is made on a subset of an event after the event has started i.e. it is made inthe-run, while an exotic bet is a bet that is made on a subset of an event before it has started. The Allen Consulting Group 56

70 They also noted that the education needed to be carried out in a way that is athlete friendly, primarily based on face-to-face meetings with athletes and supported by printed and web-based materials. In 2011, the Professional Players Federation in the United Kingdom adopted the EU Athletes Code of Conduct. As a result, more than 8,500 athletes received face-to-face education on sports betting integrity in 2011 across Europe. Monitoring For smaller national federations and sports governing bodies the cost of player education, monitoring betting and corruption risks becoming onerous for organisations already encumbered by the costs of complying with anti-doping regulations. Consequently the implementation of monitoring systems is at best patchy across Europe s member states (EPFL 2011). Defining Match-Fixing and Sports Fraud The Association of European Professional Football Leagues (EPFL) pointed out that in their research, only 42 per cent of the countries surveyed have adopted any best practice model, guidance or codes of conduct. Furthermore, since the definition of match-fixing and unlawful betting could differ greatly between each Member States, this could result in inconsistencies in the investigation and prosecution of such activity, with the cross-border nature of this particular activity further complicating the situation (EPFL 2011). European Football s governing body, the Union of European Football Associations (UEFA) noted that only Italy, Bulgaria, Poland, Portugal, Spain and the United Kingdom have adopted such provisions, although France and German seemed inclined to do so as well. They highlighted that there was no consistent definition of what constituted sports fraud or of the penalties that should be imposed if it occurred. Sponsorship While online betting operators are among the principal sponsors of European sports few sports federations or governing bodies identified a heightened risk of match fixing as a result of that sponsorship connection. In its EC Green Paper Submission, Euroleague Properties, the rights management group for top tournament professional European Basketball, noted: We believe that any activity or arrangement, which might seek improperly to influence the outcome of a sporting event, or to improperly exploit any inside information is most unlikely to arise as a result of any reputable sponsorship arrangement with a properly regulated betting operator. Threats to sporting integrity typically come from organised crime and illegal bookmakers operating in unregulated markets. These illegal enterprises do not, and would not be permitted to sponsor sports teams and competitors. The commercial reality is that, far from being in conflict, the interests of a betting operator sponsor and its sponsored party are aligned, and the commercial and legal disincentives against any impropriety are such as to ensure that that remains the case. The Allen Consulting Group 57

71 Establishment of a Right to Bet European football has led the debate on sport s so-called betting rights, suggesting that by the establishment of a direct financial linkage between the funding of a sports and the betting that takes place on it, sports federations will be able to exert more control over the variety of betting markets offered. So far the right to bet has been enshrined in law only in France where the French Code of Sport Article L , includes the right to agree with a licensed gambling company to organise bets on sports events or competitions by signing an agreement and paying a fee. European Football s governing body UEFA in its submission to the EC Green Paper consultation asserted: The EU should promote the common recognition in all EU Member States of sports bodies right to be compensated by betting operators who use sporting competitions for their own commercial purposes. This is not only to secure a fair financial return to sport, but also as a means to strengthen the fight against match fixing. It is only fair that the betting industry contributes financially to the funding of measures needed to fight betting manipulation of sports events, particularly when the threat to the integrity of sport increases as a result of the explosion in on-line gambling services. Enforcement In football alone since 2009, investigations into the activities of criminal organisations have revealed fixed football matches in Austria, Belgium, Bosnia & Herzegovina, Croatia, Germany, Hungary, Slovenia, Switzerland and Turkey. Criminal proceedings are pending in Bochum in Germany against individuals with connections to criminal organisations in Eastern Europe. Generally, enforcement has been a mix of action taken by UEFA and FIFA through their respective disciplinary bodies and criminal investigations. The governing bodies have imposed bans on players and officials, sometimes for life on participants in match fixing. Police and Judicial bodies have also initiated criminal prosecutions that have resulted in imprisonment and/or fines. 27 Germany has been a leading country with regards to prosecutions on match fixing. In 2005 the Hoyzer case was widely publicised in Germany when a referee acted as an intermediary for criminal networks seeking to influence results in the 2nd division championships. He was found guilty and recently agreed a cash settlement following a prison term of 29 months in prison. The settlement was paid to the German Football Federation. Significantly, one of the largest investigations into match fixing occurred in Bochum in Germany concerning the match fixing of up to 200 football matches. It concerned domestic league games in Austria, Belgium, Bosnia and Herzegovina, Croatia, Germany, Hungary, Slovenia, Switzerland and Turkey. A number of people were jailed as a result of the investigation; for example a Croatian national was sentenced to 5.5 years in prison after admitting to fixing numerous matches. He was convicted with two other co-defendants. They had to return $3.2m each. 27 The authors of this report do not know of any reliable figures on how many investigations there have been in relation to gambling related match fixing. The Allen Consulting Group 58

72 This case led to investigations in a number of other jurisdictions. In late 2010, two Slovenian officials were found to be guilty of match fixing in Croatia.. Relying on information from Bochum, Switzerland s football association suspended 5 years for alleged match fixing. In August 2011 three Bosnian match officials were banned for life by FIFA s disciplinary in relation to match fixing. Three Hungarians were also found guilty. In December 2011 a Croatian court convicted 15 players and match officials for their part in a major match fixing scandal. They were sentenced to between 6 and 10 months. All were required to return some of the profits from the activity. This was the result of a tip off from the Bochum case. In December 2011 indictments were filed in Turkey in relation to over 90 defendants. This caused Turkey to delay the start of their football season for one month. Fenerbahce was banned from the Champions League. With other match fixing incidents linked to criminal organisations based in China, Croatia and Singapore there is a widespread awareness that sports federations may not themselves be capable of policing their games. Noting that sports events on which sports betting could be organised may, due to criminal activities, be subjected to a higher risk of match fixing, UEFA concluded: Match fixing appears to be increasingly orchestrated by serious criminal organisations, with the resulting profits feeding other criminal networks. It is obvious that sports bodies do not have the necessary investigative powers or competence to deal with such matters and that a strong and structured cooperation with state law enforcement is essential. There is a strong consensus among sports bodies and betting industry participants that threats to sporting integrity typically come from organised crime and unlawful bookmakers rather than regulated bookmakers. While some regulators suggested that micro betting has the potential for sport fixing, there is little evidence that this activity as a regulated offering has led to a rise in the incidence of corruption in sport. The relevance of this to enforcement is that jurisdictions such as the UK require licensees to report suspicious betting patterns. Should it be accepted that the vast majority of cases involve unregulated operators in Asia, with the matches being fixed outside of Asia (e.g. in Europe, as discussed above) then any effective enforcement strategy requires cross border co-operative efforts A further issue, according to discussions with overseas regulators, is that unlicensed bookmakers in Asia have payout rates of 99 per cent, leading to the suspicion that they are conduits for money laundering. The Allen Consulting Group 59

73 Lessons of international experience for Australia The key lesson for Australia from international experience is that match fixing, or fixing of subsets of events can be organised by, or linked to, bookmakers outside Australia, including bookmakers that are not licensed in their home country. Regulation of Australian gambling service providers will not be sufficient to ensure the integrity of sports events in Australia. Co-operation with overseas regulatory authorities will also be necessary. Finding Finding 7: Extent to which permitting [in-the-run and micro betting] online is likely to contribute to greater risk in terms of problem gambling, consumer protection and integrity of a sports event ( In-therun betting TOR #5) Problem gambling counsellors believe that the intensive and anonymous form of in-the-run betting online, such as micro betting, could lead to problem gambling. There is no evidence that in-the-run and micro betting, in general, pose additional risk in terms of consumer protection, except insofar as they might be associated with manipulated outcomes of events. It is clear that micro betting (and exotic betting) can pose an integrity problem for sports, as the outcomes of subsets of events (as opposed to the event itself) can be relatively easily manipulated. However, it is not clear that online micro betting, or online exotic betting, create any additional integrity problems. Indeed, according to gambling service providers, because online bets are more easily traced than terrestrial bets, which can be made anonymously, it is less likely that bets on subsets of events, where the integrity of the event has been compromised, will be placed online than offline. 4.4 Australian regulation of online gambling Regulation of different gambling platforms In addition to the IGA that governs interactive gambling across all jurisdictions, gambling activities are also subject to state and territory specific legislations. Legislation governing the regulation, supervision and control of gambling activities are provided in Table 4.1. The Allen Consulting Group 60

74 Table 4.1 LEGISLATION GOVERNING GAMBLING ACTIVITIES IN EACH JURISDICTION Jurisdiction Legislation New South Wales Casino Control Act 1992 Casino, Liquor and Gaming Control Authority Act 2007 Charitable Fundraising Act 1991 Gambling (Two-Up) Act 1998 Gaming Machines Act 2001 Gaming Machines Tax Act 2001 Lotteries and Art Unions Act 1901 Public Lotteries Act 1996 Racing Administration Act 1998 Totalizator Act 1997 Unlawful Gambling Act 1998 Victoria Casino Control Act 1991 Casino (Management Agreement) Act 1993 Gambling Regulation Act 2003 Queensland Brisbane Casino Agreement Act 1992 Breakwater Island Casino Agreement Act 1984 Cairns Casino Agreement Act 1993 Casino Control Act 1982 Charitable and Non-Profit Gaming Act 1999 Gaming Machine Act 1991 Interactive Gambling (Player Protection) Act 1998 Jupiters Casino Agreement Act 1983 Keno Act 1996 Lotteries Act 1997 Wagering Act 1998 South Australia Problem Gambling Family Protection Orders Act 2004 Racing (Proprietary Business Licensing Act 2000) Authorised Betting Operations Act 2000 Casino Act 1997 Independent Gambling Authority Act 1995 Gaming Machines Act 1992 Lottery and Gaming Act 1936 State Lotteries Act 1966 Western Australia Betting Control Act 1954 Bookmakers Betting Levy 1954 Casino (Burswood Island) Agreement Act 1985 Casino Control Act 1984 Gaming and Betting (Contracts and Securities) Act 1985 Gaming and Wagering Commission Act 1987 Gaming and Wagering Commission (Continuing Lotteries Levy) Act 2000 Racing and Wagering Western Australia Act 2003 Racing and Wagering Western Australia Tax Act 2003 Racing Restriction Act 2003 The Allen Consulting Group 61

75 Jurisdiction Legislation Tasmania Gaming Control Act 1993 TT-Line Gaming Act 1993 Racing Regulation Act 2004 Racing Totalizator Betting Act 1952 Australian Capital Territory Betting (ACTTAB Limited) Act 1964 Casino Control Act 2006 Gaming Machine Act 2004 Interactive Gambling Act 1998 Lotteries Act 1964 Pool Betting Act 1964 Race and Sports Bookmaking Act 2001 Racing Act 1999 Unlawful Gambling Act 2009 Gambling and Racing Control Act 1999 Northern Territory Gaming Control Act 2005 Gaming Machine Act 2005 Northern Territory Licensing Commission Act 2001 Racing and Betting Act 2004 Soccer Football Pools Act 2004 Totalisator Licensing and Regulation Act 2004 Unlawful Betting Act 2004 Source: OESR 2011 Comprehension of Interactive Gambling Act requirements Industry stakeholders (such as gambling service providers and sporting bodies) and consumers of gambling services were asked about their knowledge of the IGA especially on how it regulates online gambling specifically in-the-run and micro betting. The findings are summarised below. There is consensus across all stakeholders that the IGA s approach is unclear especially where it relates to the definition of an event and hence impacting on online bet types that are allowed or disallowed under the IGA. Without any enforcement or prosecution of overseas operators, the IGA has been ineffective in preventing consumers from accessing online in-the-run and micro bets via overseas gambling sites. There is concern that the IGA in its current form has only been successful in disadvantaging Australian operators against their international competitors in their product offering. Consultations with gambling service providers Definitions There is consensus across all the gambling service providers consulted that the IGA is not clear and it is not working. The confusion stems from the definition of an event, which then impacts on whether a bet is made in-the-run (either on the outcome of the event or on contingencies within the event). The Allen Consulting Group 62

76 All the gambling service providers consulted took a conservative approach to the definition of an event. However, consultations have highlighted that there are differences in the interpretation of what constituted a micro bet. Some interpretations are provided below: Betfair interpreted in-the-run as betting on the outcome of the game and hence according to the IGA, would not be allowed after the event has started. Micro bets are events that do not have an impact on the outcome of the game but betting on the first ball of the game, in Betfair s opinion is not micro betting. Betfair indicated that if a certain bet event is allowed, it should not matter if the bet is made pre-match or in-the-run, as this will not affect the integrity of the sport. Sportsbet's interpretation (in a football context) was that no online bets would be allowed after kick off and no online betting would be allowed on the second half after kick off. However, because other gambling operators offer such products online, Sportsbet is being compelled to make same offer. Tom Waterhouse Betting said that betting is borderless and that the IGA has had little impact on controlling betting across borders. They were also unsure about what constituted in-the-run, whether it defined an event in quarters, rounds or the whole match. The IGA s definition is unclear and bookmakers have been investigated for offering in-the-run micro betting, on the instigation of sporting bodies. These bookmakers are still offering such bets for overseas games. Sportingbet/Centrebet commented that the IGA s definition is a complete mess and woeful. It is not clear when an event starts for in-the-run and micro bet. Since 2003, for a cricket match, most Australian operators have taken the approach for internet betting of switching off bets to Australia while play is ongoing. If the match is played over several days, when play stops for the day, internet betting is switched back on. Tabcorp was unclear about the definition of an event under the IGA. They had sought legal advice and clarifications twice and had received different answers. Tabcorp therefore adopts a conservative definition because they are heavily regulated unlike other operators. Tabcorp believed that some Australian operators were taking advantage of the 'grey' areas to offer online internet bet types and that clarification about the definition should be provided. Micro bets The gambling service providers highlighted that micro bets are increasing in popularity but are of very small stakes. Sportingbet/Centrebet noted that the average micro bet is $9 and that there is no money in it. Micro bets made up a small percentage of turnover. Currently in Australia, gambling service providers are prohibited from offering inthe-run bets online, including micro bets. However, gambling service providers noted that people could place such bets on overseas sites. The Allen Consulting Group 63

77 There is an appetite for consumers to place micro bets over the internet because phone betting is time consuming and makes it more difficult to place bets on the next point. The gambling service providers consulted are under constant pressure to provide such bet types, but will only do so if it was legal so as to meet customer demand. Non-provision of such products would imply that operators risk losing customers to their competitors. Consultations with sporting bodies Consultations with the various sporting bodies revealed that exposure to in-the-run and micro betting varied across sports depending on the nature of the sporting event. The AFL indicated that micro bets have been offered since the AFL started while the ARB and Netball Australia noted that they were less exposed to micro bets compared to other sports. The sporting bodies expressed a variety of views regarding the definition of what constituted an in-the-run bet. The AFL expressed the view that the IGA is unclear and the definitions should be removed, clarified or policed. The varying views stemmed from the confusion around the definition of an event. All sporting bodies tended to adopt a conservative view of an event where the entire match or game is the event. An event would start when the first whistle is blown and would end at full time or overtime when the last whistle is blown. Some sports like Netball are also bound by international rules, where an event is defined as a match. For the case of Netball, competition at the international stage is bound by the International Netball Rules. The rules state that if bets are allowed on the outcomes of quarters, then there would be a need to officially declare a result at those points in order for quarters to be considered an event. For the ANZ Championship, where the competition is between five Australian and five New Zealand teams, there is nothing stopping Netball Australian from declaring part of a match as an event. If bets were made on the outcome of an entire competition, (e.g. the winners of the AFL competition or the ANZ Championship) rather than a particular game or match, then it was clear to the sporting bodies that the competition is the event. All sporting bodies did not have an issue with bets made on the outcome of the competition, after the commencement of the competition. They thought that they should be allowed and in their opinion, not considered to be a bet made in-the-run. Sporting bodies were strongly of the opinion that they should have control over what kind of micro bets are permitted and they should be able to define an event for the purposes of regulating in-the-run betting. The rationale is that they are best placed to know what kind of micro events can be manipulated in their sports and what constitutes an event, given the way these sports are played. Focus groups Focus groups participants did not have accurate and thorough knowledge of the current Australian regulatory environment for interactive gambling. A few participants had a grasp of it but the majority, even after defining statements were read, continued to focus on what they as gamblers can do rather than what gambling operators could or could not do in Australia. This was summed up by the two-part logic expressed by the majority in that if it was unlawful, authorities will come after them and if many people are doing it, it cannot be unlawful. The Allen Consulting Group 64

78 The high visibility of gambling advertising and online gambling sites in Australia encouraged the view among online gamblers that these are legal activities. The proliferation of gambling advertising in Australia added a stamp of legitimacy to the activity, that is, it was approved or viewed favourably by the establishment, the government, and rule making bodies within the country. The complex legal wording of what is allowed and disallowed promoted confusion, incredulousness, or disbelief that any of the actions could be unlawful or in meaningful violation of the law. Participants failed to understand how it was possible that Australians are allowed to play online poker but gambling operators in the country are not allowed to offer the game. Adding to the confusion is the idea that it is not easy to tell where a gaming site is located. Some overseas sites have a local presence through offices or phone numbers. The difficulty of identifying where a website originated from has an important corollary, that there was a strong feeling that when one was on the internet, one s physical location was of no significance. You, as a gambler, are everywhere and nowhere. The site connected people. The computer connected one to the site as well as to the legality of the offering because one would be playing with people in countries where companies could offer the service. Participants were also doubtful that Australian law could have jurisdiction over online gambling sites based overseas. The doubt was neatly summed up participants who said that we could not hold other countries to Australian law: How can it be illegal for an overseas company if they are based overseas? It's like why doesn't the Australian government prosecute most of Europe for not wearing helmets on pushbikes? It is illegal in Australia not to wear a helmet, but we don't prosecute everyone overseas. It might be illegal under Australian legislation but I can't see an Australian prosecutor trying to bring a case in Australia against some company in the Netherlands or the EU you have provided gaming services to 50,000 Australians we are going to sue you because you broke the law. It is logistically impossible. I would imagine bringing a court action. A few people in the focus groups were knowledgeable of the regulations and rules that apply and some were aware of dodgy online gaming sites but most sites were trusted because they delivered what the gambler wanted great game play and choice, game involvement, social interaction, fair pay out, safety, fair odds, and easy/reliable access. The sites were approved by virtue of their popularity and incessant promotion. Possible regulatory changes Consultations with gambling service providers Platform neutrality There was consensus among the betting agencies that platform neutrality should apply to in-the-run and micro bets. The legality of such bets should not be based on the medium by which the bet is made. Betfair said that it did not make sense to apply different rules that allow in-the-run bets and micro bets to be placed via the phone and not via the internet. TOTE Tasmania agreed. The Allen Consulting Group 65

79 Sportsbet said that in-the-run online bets should be allowed as current restrictions place Australian operators at a disadvantage, relative to their international competitors. Sportingbet/Centrebet said that regulations should be technology neutral. If the Government is worried about internet betting, it is possible to place additional controls to monitor online bets e.g. betting reports generated over 24 hours, setting up a national integrity board to review these reports on betting patterns. Tabcorp supported platform neutrality and believed that there is no real difference between channels. The internet and phone were just different ways of placing bets. The internet made it easier to place bets with a possibility of placing more bets. Enforcement Betfair said that enforcement of regulations is key. Betfair understood that the Australian Federal Police submitted to the Joint Select Committee that they did not have the resources to pursue offenders. Overseas sites offer online poker and full suite of gambling activities to Australian customers and are breaking the law. These providers are not being pursued and therefore have a competitive advantage over Australian gambling service providers. On the other hand, Betfair has had to switch off certain gambling activities for Australian IP addresses due to the restrictions placed by the IGA. Sportsbet pointed out that there is a drastic lack of enforcement in terms of advertising. There have been blatant breaches such as advertising on Australian sites. PokerNights in Australia is sponsored by overseas operators. Sportingbet/Centrebet highlighted the need to strengthen the IGA by enforcing the prohibitions. It is necessary to reign in rogue domestic and overseas operators using a range of legislative restrictions so that they comply with the IGA s requirements. Regulation not prohibition Betfair supported regulation rather than prohibition. They noted that there are benefits of being regulated such as the ability to advertise and for this reason (amongst others) chose to be a licensed provider in Australia. Betfair stated that customers would rather bet using Australian sites and would also choose regulated sites over unregulated ones. TOTE Tasmania suggested legalising and regulating all forms of gambling. Regulation would imply that online gambling services could only be offered by lawfully regulated Australian gambling service providers. Gambling service providers should be taxed and should be required to apply play protection measures. This would shrink the unlawful market. TOTE Tasmania agreed with Betfair that if Australia legalised different forms of gambling and regulated it better, Australians would turn to legal sites. TOTE Tasmania stated that currently the turnover on unlawful sites is 39 times that of legal sites. Sportsbet was of the view that the Government should regulate, control and tax gambling operators. There should be a regulator instead of having complex legislation and the government should exercise control over advertising. The Allen Consulting Group 66

80 Tom Waterhouse Betting said that the gambling industry should be regulated and taxed. Overseas sites currently do not pay anything. They also said that part of the tax should go to the racing and sporting bodies. Tom Waterhouse Betting said the question should be to ask why Australia is not opening up the market, because there are good reasons to do so such as the ability to regulate and minimise harm, which meets the objectives of the IGA, which in its current form has not prevented online betting from growing tremendously. While online gambling promotes accessibility, there is no evidence that it has led to increase in market size or problem gambling. Similar to Sportsbet, Tom Waterhouse Betting said that there is a need for a national body so that there is a consistent method of tackling problem gambling. There should be a registry for sharing information on problem gambler and selfexclusion. Sportingbet/Centrebet proposed to allow Australian operators to offer all bet types under Australian regulation. Australian consumers would migrate from overseas sites to Australian sites provided: there is sufficient marketing regarding protection measures and dispute resolution via regulator; Australian providers bring their service to the international level; and Australian operators provide the services that the customers want. Tabcorp believed that there should be a licensed regime so that Australian operators can offer the same services and enable Australian operators to compete on a level playing field where player protection standards can be assured. Sportsbet indicated that if it was legal to offer online in-the-run and micro bets in Australia, they would do so. They said there would be an increase in uptake with Australian customers substituting gambling on offshore sites to onshore sites. Code of conduct Tabcorp proposed that a national code of conduct for wagering operators could be developed but noted that it is likely that regulation would work better. Consultations with gambling counsellors Relationships Australia expressed concerns that legalising current prohibitions would lead to an increase in the number of people experiencing problems. They expect that legalisation would be accompanied by significant promotion through many domains. They thought that this might lead to people starting gambling, who would not otherwise. Legalisation may further normalise gambling, especially with people becoming 'acculturated' that gambling is not risky. There is a concern that legalisation would equate to safety. Relationships Australia also noted that there might be some advantages in regulating in terms of being able to control gambling service providers. If tax levels were set at a low level for Australian online gambling providers so as to make them competitive, there is concern whether the level of revenue being considered will take into account the potential social costs, which are hard to quantify. Relationships Australia recognised that more research and more thought is needed. The Allen Consulting Group 67

81 The Responsible Gambling Advocacy Centre was of the opinion that inducements and advertising needed to be tightly controlled. They predicted that legalisation of current prohibited online gambling activities would lead to an increase in advertising. This would be very problematic, as it would likely introduce gambling to a whole new group of people. Sports betting advertising has had a huge backlash in the community. There will be a need to maybe follow South Australia s model of family-friendly advertising where advertising during sports events is not allowed. The Centre also recognised that inducements were a big issue as they change people's perceptions about gambling. For example, practice games available on Facebook and phone applications that children could play are a particular issue, especially when they could then be link to paid sites, which many were not aware they were on. Such sites could also teach gambling behaviour that is misguided such as the ability to always win on practice games but not on the paid games. Facebook has recently relaxed its controls in relation to allowing gambling providers to link on its pages. Turning Point noted that an advantage of taking a strongly regulated approach would be the ability to prohibit advertising and promotion of gambling (and winning), as is the case with EGM gambling. When EGM gambling started in the early 90 s it was promoted similarly to current advertising of sports betting. This facilitated a period of normalisation of use of the product, which is currently occurring with young men and this emerging form.. The Gambling Impact Society noted that if online gaming is made legal, free practice games should have the same characteristics as 'paid' games in that free games should not have better odds so as to lure consumers into thinking it is easy to win while gambling. They also said that there is a need to strengthen precommitment online and make support services more prominent (not just the bare minimum). Dynamic warning messages could be implemented. Focus groups There was scepticism in the focus groups that access to overseas sites can be prohibited. Many view unfettered website access as a basic freedom and others assumed people can circumvent any governmental blockages. One person mentioned the blocking of access to child pornography sites but this did not trigger a round of supporting statements for governmental control of what people can do on the web when gambling. Full or partial prohibition of access to gaming sites raised mentions of nanny statism and the invocation of attempts by politicians to establish betting precommitment limits for EGM players. The participants disapproved of such measures. The introduction of domestically controlled online gaming sites drew a measure of interest. Some who previously indicated that it did not matter where the site is located or who said they typically do not pay attention, mentioned that Australian regulated sites would be safer, more secure, would raise revenue, increase advertising, and create local jobs. There was a feeling though, that Australian sites would be playing catch-up with big established overseas sites. They would be playing catch up so they would be advertising big-time. The Allen Consulting Group 68

82 It cannot be assumed people would flock to a domestic site when participants were, for the most part, satisfied with the overseas sites with which they were familiar. Participants expressed a range of views: I would not swap my Full Tilt just to go to an Australian site. But I think a lot of new gamblers would probably choose the Australian site over an overseas sides if that was available. In my view the fact that it is an Australian or Macedonian website as long as the trust I feel like I'm going to get my money that there is some regulation behind it makes no difference. There was some agreement with the idea that Australian regulated online gaming sites would increase the level of gambling in the country but it seemed to be tied up with the idea of advertising/promotion. That is, the existence of the local sites in and of themselves would not grow the market; it would require advertising. Local sites were said to be appealing to new online gamblers but less to established ones. Analysis In discussion with stakeholders (sporting bodies and gambling service providers), two major point of contention were the uncertainty over the definition of an event, for the purposes of prohibiting in-the-run betting, and the fact, for any given definition, that in-the-run bets made using the voice function of (say) a smart phone are lawful under the IGA, while the same bets made using the web browser function of the same device are unlawful. One gambling service provider suggested that an in-the-run bet using an App could be lawful because an App uses voice technology. Taking the last point first, the non-neutrality of the current in-the-run regulations clearly affects gambling service providers. Their view, which the authors of this report find to be reasonable, is that if the Government deems in-the-run betting to be either sufficiently dangerous in terms of problem gambling, or for the integrity of sports, then it should be banned altogether. However, if in-the-run betting is not dangerous when made by telephone, it isn t dangerous when made online. This seems obvious, unless evidence exists that can show that the slower nature of inthe-run betting by telephone mitigates dangers that exist when these bets are made online. However, in the absence of such evidence (and none exists as far as the authors of this report are aware) then the current in-the-run regulations are merely interference in the business models of gambling service providers for which there is little if any justification. Sporting bodies have no direct stake in this non-neutrality question but agree with the logic that regulation should be technology neutral. The confusion around the definition of an event for the purposes of regulating inthe-run betting affects both gambling service providers and sporting bodies. Since there is no clear definition in the wording of the IGA, and in the absence of any case law, gambling service providers have to make their own judgements. This obviously leads to the possibility of inconsistent offerings, possibly legally inconsistent offerings, in the market by gambling service providers. The Allen Consulting Group 69

83 The confusion created by the absence of a statutory definition of an event is important because of the different rules applying to in-the-run betting that is conducted online and over the telephone. Because in-the-run betting (the whole event or a micro subset of it) is lawful when made over the telephone, it doesn't matter, for the purpose of telephone betting, whether e.g. the second half of a football match is an event in itself. But it does matter with online betting, because if it is a discrete event, then under the IGA a bet could be made online on the outcome of the second half, after the match has started but before the second half has started. If it is not an event, i.e. the only event is the match itself, then such a bet is not permitted under the IGA, because it would be an in-the-run bet. This lack of clarity not only creates confusion. Some gambling service providers claim that it puts them at a competitive disadvantage vis-a-vis their international competitors. This is because these international competitors accept online in-the-run bets from Australian residents, while Australian gambling service providers cannot, notwithstanding that the IGA prohibits all online gambling service providers (Australian and foreign) from offering these services to Australian residents. 28 It is difficult for a statute to define a sporting event, since each sport has its own nuances. One possible way to clarify the definition of an event, sport by sport, would be for the definitions to be decided by the sporting bodies. Finding Finding 8: Issues that arise from having different rules regarding the same services delivered online and via the telephone ( In-the-run betting TOR #3) Among gambling service providers, there exists a great deal of confusion around the definition of an event for the purposes of not breaching the prohibitions in the IGA against in-the-run betting. Some also believe that the current rules place Australian gambling service providers at a competitive disadvantage vis-a-vis their international competitors. Similarly, sporting bodies also believe that the IGA is unclear in this regard. With smartphones (or other mobile devices) enabling bets to be made online or by a voice call using the same device, the sense of having different rules regarding the same services delivered online or by telephone is diminished even further. All gambling service providers and sporting bodies consulted believe that regulations should be platform-neutral. 28 According to Australian online gambling service providers, Australian authorities are unable to enforce these provisions of the Act against foreign online providers The Allen Consulting Group 70

84 Finding 9: Additional measures that might be applied to in-the-run and micro betting to preserve integrity of sports events and consumer protection ( In-the-run betting TOR #6) Based on discussions with sporting bodies, consideration could be given to allowing sporting bodies to define an event for the purposes of regulating inthe-run betting. 4.5 Limiting unlawful provision of online gambling services Measures that have been put forward that could discourage the provision and use of unlawful overseas online gambling services in Australia and their effectiveness are discussed below. The findings below reflect the views of the gambling service providers consulted. Consultations with gambling service providers Implementing financial restrictions Betfair said that that if the Australian Government blocked credit card transactions made with Australian gambling service providers, this would give overseas competitors a great advantage. All gambling service providers noted that this is a possible measure but would not be highly effective. Betfair and Sportsbet highlighted that the United States had used banks to block transactions and this had not worked, as it required a huge amount of cooperation from banks. Sportsbet and Sportingbet/Centrebet also pointed out that people could circumvent these measures by using e-wallets such as PayPal and that gamblers in Norway were circumventing such measures. Block access to site All gambling service providers believed this measure would be ineffective as it is easy for customers to hide their IP addresses and not be detected, although it might have some effect on the everyday person. It would be a form of censorship and it is not possible to block the internet. Sportingbet/Centrebet highlighted that if one was to look at it from the overseas operators' point of view, it would be in the interest of these overseas operators to advise customers on how to circumvent the blockage and might even help potential customers set up their accounts and pay for proxy servers. Other measures TOTE Tasmania suggested geo-blocking, which would involve overseas sites blocking Australians from assessing their websites. Enforcement would be assisted by the threat of arrest for non-complying executives should they travel to Australia. It noted that it was possible to block at the product level. Hence, if placing certain types of bets is unlawful in the jurisdictions that the customer is from, then these bets should be blocked. TOTE Tasmania believed this would be effective. The Allen Consulting Group 71

85 4.6 International regulation of online gambling With limited legal offerings available in Canada, Latin America, Asia and Africa, and the United States banning online sports betting 29, attention must turn to regulatory approaches in Europe. While Europe has a diverse range of regulatory approaches, the five largest economies in the European Union have moved to or are moving towards a local licensing regulatory regime for online gambling. While the United Kingdom has adopted a more free market approach to the regulation of online gambling, many of its European neighbours have adopted a more restrictive approach through a need to regulate internet gambling at the point of consumption, to collect taxes and to ensure that both players and operators are protected from black market offerings. These jurisdictions are commonly known as ring fenced markets. Offshore jurisdictions differ from regulated national markets in that they rely on customers and revenues from outside of their jurisdiction. There are a number of jurisdictions which specialise in offshore licensing such as: Alderney; Isle of Man; Gibraltar; First Cagayan in the Philippines; Kahnawake in Quebec, Canada; Antigua; and Barbuda and Costa Rica among others. Many of the world s largest online gambling companies have a licence in one or more of these jurisdictions. Monopoly markets are quite common, but in most instances they are limited to state lotteries, although there are some jurisdictions such as the northern European jurisdictions of Norway, Sweden and Finland that offer a broader range of products under the monopoly. While online sports betting monopolies are not the norm, there are still numerous examples of jurisdictions restricting this activity to monopoly regulation. The European Parliament has now spoken against monopoly regulation for online gambling on the basis that monopolies rarely ensure adequate supply. According to the European Parliament, without adequate supply, many consumers will resort to black market offerings. The United States and Germany have led the way in attempting to restrict internet gambling. The United States famously took action and largely eliminated from its market two of the largest poker operators PokerStars and FullTilt, who were accessing the United States market without a licence. Many other jurisdictions have prohibitions such as China and various Asian jurisdictions, however, most of the action taken against offshore operators has been sporadic at best, meaning that offshore operators consider these markets undeclared and they continue to offer their products to these markets. Figure 4.1 sums up the different types of online gambling regulations adopted by countries internationally. 29 The United States Department of Justice provided advice on 23 December 2011 that the Federal Wire Act of 1961 only applies to sports betting. Previously, the Department of Justice had asserted that under the Wire Act, all forms of Internet gambling (especially online poker) are illegal. he United States has in recent times successfully prosecuted online poker service providers using other legislations such as the Unlawful Internet Gambling Enforcement Act and Illegal Gambling Business Act. The Allen Consulting Group 72

86 Figure 4.1 INTERNATIONAL ONLINE GAMBLING REGULATION Source: GamblingCompliance Ring-Fencing: an Emerging Trend Ring-fencing is emerging as a trend for internet gambling regulation in Europe. 30 The European Parliament now recognises that combating unlawful gambling and strengthening technical and legal instruments for identifying and sanctioning unlawful operators is a best practice as well as promoting high quality, competitive legal offerings and fostering cooperation between regulatory authorities. The ring-fencing architecture of five European jurisdictions (Italy, France, Belgium, Denmark and Spain) is examined in this section. Three jurisdictions have ringfencing arrangements currently in place: Italy the country that pioneered the regulation of ring-fenced online gambling. France the largest country to introduce a ring-fenced regime. Belgium a jurisdiction, which has pioneered the model of requiring a landbased licence for the operation of online gambling. Denmark and Spain are about to launch their ring-fenced online gambling markets. Italy (AAMS) decided to regulate internet gambling because AAMS was of the view that on the internet, strict prohibition would not work well and that by regulating customers could play in a safe and controlled environment, in which the regulating authority can try to avoid frauds and manage the players' complaints. This was preferable to having customers playing with unknown and uncontrolled offshore operators. 30 Italy first introduced online gambling local licensing. Since then France, Denmark, Spain, Romania, Poland, Belgium among others, have introduced regulatory regimes with similar measures. The UK, Ireland and others have indicated that they will be moving towards a similar model. The Allen Consulting Group 73

87 Italy was the first to introduce a ring-fencing regulatory model for internet gambling. It is widely perceived as the market leader in terms of local licensing models. Italy has gradually regulated its market in three phases over a number of years (starting in 2006) and offers many types of games with the exception of online slot machines and betting exchanges. Its primary method of limiting access to clandestine offerings is through ISP blocking and a competitive regulatory regime. Italy recognises that it has been a very long process and that it is not over yet. France followed Italy's lead by introducing a ring-fencing model in Despite this, its model is somewhat onerous on issues such as taxation and legal offerings. In this regard, it does not allow online casinos and has an effective tax rate for sports betting of 8.5 per cent of turnover. Criticism has been levelled at the government that the payout rates and taxation levels for sports betting have created a product, which is not competitive, and have driven consumers back to unlicensed operators. Belgium passed a law opening its online gaming market to local licensing in 2009 with the new regulatory regime coming into effect on January Belgium introduced local licensing for online gambling on the basis that only terrestrial based operators can apply for an online licence with the first temporary online sports betting license awarded in October Belgium s reason for regulating the market was to prevent young people from gambling, prevent and control problem gambling and the generation of taxation revenue. Unlike France and Italy who believe that it could not prevent access to unlicensed offerings, Belgium believes that this is possible through blocking measures, advertising restrictions and enforcement measures. While their regulatory regime is still in its infancy, Belgium believes that linking online licences to land-based licences would allow them to apply their regulatory expertise to online application. It also believes that a level of trust has been established with the land-based operators. Despite an expected strict approach to regulation and enforcement, Belgium has a low tax rate of between 11 and 15 per cent of gross gaming revenue. Following licences going live in January 2012, Denmark has one of the most liberal local licensing regimes in the world, with most games allowed and a tax rate of 20 per cent of gross gaming revenue. The key objectives of the law, among others are, consumer protection, combating criminality and fraud and retaining the existing distribution of profits to charitable institutions. Being a small nation, Denmark also provides a useful example of how cross border liquidity for poker can apply to a local licensing model. Spain is currently in the process of licensing online operators at a national level for the first time. The first round of licensing will allow cash poker, tournament poker, bingo, roulette, black jack, sport mutual betting, fixed odds betting, horse racing but not slot machines or betting exchanges, and will have a tax rate of 25 per cent of gross gaming revenue for most games. Details of the architecture of regulation and taxation for the five jurisdictions are provided in Table 4.2 and Table 4.3. The Allen Consulting Group 74

88 Despite many architectural differences, all the ring-fenced jurisdictions have ISP blocking as a limiting measure and all except Italy have payments blocking. Italy is currently exploring ways to track payments. There is also a common requirement for all licensees to have a dot country domain name and each jurisdiction has strong advertising restrictions and enforcement measures against unlicensed offerings. Is Ring Fencing Effective? The effectiveness of ring fencing (licensing, regulation and taxation) is really the same thing as the effectiveness of the measures aimed at sanctioning unlicensed operators. These are discussed later in this chapter. The Allen Consulting Group 75

89 Table 4.2 THE ARCHITECTURE OF REGULATION AND TAXATION JURISDICTIONS WITH RING-FENCING IN PLACE Features Italy France Belgium Permitted games Pool betting and fixed odds on sports and horse racing Lotteries Roulette Poker (cash and tournament) Baccarat Black Jack Bingo poker. International liquidity is forbidden hence poker players can only play with players registered on a site licensed by ARJEL and only on a.fr site. Sports betting Horse race betting Monopoly operator Francaise des Jeux also offers online the games that it is authorised to offer land-based such as bingo and instant scratch cards. All games that are allowed in casino can be played online. This includes Poker, Blackjack, Roulette (French, English and American), Reel Slots, Baccarat, Chemin de Fer, Craps, Punto Banco, Sic Bo, Bingo, Keno and Wheel of Fortune. sports and horse race betting are also allowed. In-play/micro betting allowed? Yes In-play or live betting is allowed but not micro betting. Not decided yet if live betting will be allowed, but micro betting has been ruled out. Taxation Depends on the type of gambling. Sports betting based on turnover over determined period. Applicable tax rate depends on amount collected. Skill games with cash prize: 3 per cent of collections (entry fees) Fixed offs with case prizes (cash poker and casino games mainly): 20 per cent of gross gaming revenue. Licensing costs Bank guarantee of 1.5m Licence cost 300,000 Server location Within the European Economic Area (EEA). Sports betting: 8.5 per cent Horse betting: 14.4 per cent poker: 2 per cent Additional 1 per cent level across all sectors of gambling to cover additional social costs of problem gambling. 5,000 for a first licence, 8,000 for two licences or 10,000 for three licences. Due to compliance cost associated with the data protection vault, the cost of operating in France is said to be over 1m. The frontal server or.fr gateway must be located in France but the actual game server can be in the EEA. 11 per cent of gross gambling revenue (GGR) in the Walloon regions. The other two regions have different rates (13 per cent in Brussels and Flanders). According to Gaming Commission president Marique, tax breaks in these regions mean that the rate is 11% or very near all across the country. Corporate tax rates are also applied to operators, currently at 33.99%. Casino (A+): 17,840 per annum VLT games (B+): 8,920 per annum betting: (F1+): 10,180 per annum To be situated in a permanent establishment located on the Belgian territory. The Allen Consulting Group 76

90 Features Italy France Belgium Blocking measures Advertising restrictions ISP blocking Payments blocking Use of only a.it. No.com and.net website suffixes. Advertising of unlawful gaming activities is prohibited by general rules of advertising rather than gaming regulation. ISP blocking Advertising bans Penalties on unlawful operators such as a maximum prison term of 7 years and a fine of up to 200,000. Advertising by an unlicensed operator can be subject to a 100,000 fine. ISP blocking Payments blocking Advertising bans on unlicensed gambling Prosecution of gaming authorities in Alderney and Gibraltar if they facilitate unlawful gambling by allowing their licensees to continue their operations in Belgium. Source: GamblingCompliance Table 4.3 THE ARCHITECTURE OF REGULATION AND TAXATION JURISDICTIONS SOON TO IMPLEMENT RING-FENCING Features Denmark Spain Permitted games Wagering, apart from horse and dog race wagering. Casino games including roulette, prize paying gambling machines, baccarat, punto banco, black jack, gaming on gaming machines as well as poker. Lotteries (monopoly of Danske Spil) In-play/micro betting allowed? Pool Betting, fixed odds and betting exchanges on sports and horse racing Any other form of betting different to sporting events or horse racing Raffles Lotteries Other games (casino games mainly but this is a wide category which can, in theory, incorporate any type of gambling activity) Contests Awaiting final approval for Roulette, Poker (cash and tournament), Baccarat, Black Jack and Bingo. Yes To date draft regulations for fixed odds sport betting allow in-play betting and micro betting. However, the details of how this activity will be regulated, is not yet available. Taxation Wager licence holders must pay a tax of 20 per cent of the GGR. casino licence holders must also pay a tax of 20 per cent of GGR. Pool betting on sports: 22 per cent turnover Fixed odds sports betting: 25 per cent GGR Betting exchanges on sport: 25 per cent GGR Pool betting horse racing: 15 per cent turnover Fixed odds horse racing: 25 per cent GGR Other forms of pool betting: 15 per cent turnover The Allen Consulting Group 77

91 Features Denmark Spain Licensing costs Wager licence or an online casino licence application fee DKK If applying for both, it will cost Annual fee based on annual taxable gaming revenue: Not exceeding DKK 5m DKK Equal to or greater than DKK 5m, but not exceeding DKK 10m DKK Equal to or greater than DKK 10m, but not exceeding DKK 25m DKK Equal to or greater than DKK 25m, but not exceeding DKK 50m DKK Equal to or greater than DKK 50m, but not exceeding DKK 100m DKK Equal to or greater than DKK 100m DKK Server location To be located in Denmark with possibility for the Danish Gambling Authority to give its approval for the server to be based in another country. Blocking measures Advertising restrictions ISP blocking Payments blocking Advertising ban where the promotion of participation in games without a licence is an offence and is liable to a fine. Other forms of fixed odd betting: 15 per cent GGR Other forms of betting exchanges: 25 per cent GGR Raffles: 20 per cent GGR Contest: 20 per cent turnover Other games: 25 per cent GGR Random Combination numbers: 10 per cent paid prizes Technical reports assessing compliance of technical standards: 38,000 Registration Services: 2,500 Licence and authorisation application: 10,000 for each licence and 100 for each authorisation Auditing inspections: 5,000 Administrative fee to cover the operations of the regulator: 0.1 per cent of turnover Gaming operators will be required to set up financial guarantees for each gaming licence. Two different types of licences are required to operate in Spain: A general licence and a singular licence. - General licences will require a guarantee for up to 2.2m. This amount will change after the first year of operation based on GGR results but will be of a minimum value of 1. - For the first year, the guarantee for a singular licence will be based on a percentage of the forecasted turnover or GGR, depending on the type of gaming operation. After the first year, the guarantee will be based on turnover or GGR from the previous year. Servers may be located anywhere as the long as the regulator is able to access the information contained therein. The main regulatory framework for online gambling in Spain however has granted jurisdiction to the regulator to establish secondary servers on Spanish soil. ISP blocking Payments blocking Advertising agencies are bound to check whether a gaming operator has the legal right to operate and advertise in the country. Source: GamblingCompliance The Allen Consulting Group 78

92 The United Kingdom Position The Gambling Act 2005, which came into effect in September 2007 provides that any operators offering their services in the United Kingdom with "equipment based in Britain to facilitate remote gambling" must obtain a licence and pay taxes in the United Kingdom. However, an exemption was created for EEA based operators and those offering their services from a white list of approved jurisdictions such as Antigua, Tasmania, Alderney and the Isle of Man. This exemption has created a situation where despite the fact that the Gambling Commission has issued over 400 online gambling licences since 2005, very few of these operators are based in the United Kingdom for tax purposes, preferring tax havens such as Alderney, Malta, Gibraltar or the Isle of Man, in order to avoid the United Kingdom gambling tax of 15 per cent of gross gaming revenues as well as the United Kingdom's heavy corporate tax regime. The United Kingdom government confirmed in the summer of 2011 that the recognition of the right of European and other white listed foreign operators to advertise in the United Kingdom would be brought to an end. As part of a reform of online gambling regulations mandatory domestic licensing and taxation will be adopted in the United Kingdom. In its current state the United Kingdom is an exception rather than the norm for the regulation of a country s domestic online gambling market. It is set to follow a long line of jurisdictions, and is likely to follow Italy's lead and ring-fence their market. Best practice taxation Of the jurisdictions examined which regulate online gambling, many have opted for a tax rate of around 20 per cent of gross profits. For example: Italy has a tax of 20 per cent of gross profits for cash games, Denmark has a tax of 20 per cent of gross profits, Belgium has a tax of per cent of gross profits, UK has a tax of 15 per cent of gross profits, and Spain has a tax of 25 per cent of gross profits. While this should not be regarded necessarily as best practice it is an accepted trend, and a rate that operators see as acceptable. 31 In contrast, France is the best example to show that a high turnover tax for private operators is ineffective in channelling players away from the black market. Much criticism has been levelled at France s taxation treatment of sports betting. There is a requirement for a payout ratio of 85 per cent and with tax set at 8.5 per cent of turnover (tax of 7.5 per cent + 1 per cent betting levy). When referring to the 2011 revenue figures, this left the 30-plus sports books to share 6.5 per cent of turnover, or around 48m between them. The contention that players are returning to non-licensed websites has found an evidential basis as a result of the statistics ARJEL has released. ARJEL published results in April 2011 showing that sports betting revenues which had enjoyed a promising start, had dropped by over 26 per cent from the previous quarter. 31 This is evidenced by the Remote Gaming Association s support of the Danish regulatory regime for online gambling in the recently determined state-aid case. See the following FT article: The Allen Consulting Group 79

93 Following the release of ARJEL s first set of annual statistics on July 22, 2011, ARJEL president Jean-Francois Vilotte questioned the current turnover tax model: Regarding taxes, we have now realised that the taxation model where a percentage of stakes is levied does not work. ARJEL must ensure that in the revision process the law must be adapted to the market to ensure the legal offer remains attractive to the player, therefore some changes are needed to ensure the black market does not become a problem, particularly as applied to the sports betting sector. i This is also illustrated by looking at the decline in active sports betting accounts in France. In the week ending October 24, 2010 horseracing had 124,000 active accounts, poker had 270,000 and sports betting 162,000. In week ended March 27, 2011 horseracing had 132,000 active accounts, poker had 313,000 and sports betting 73,000; changes of 5.8 per cent, 15.8 per cent and minus 55 per cent respectively. The European Parliament in its response to the European Commission s Green Paper consultation stated that: The central objective must therefore be to contain that black (and grey) market to a large extent. 32 With this in mind, two studies by MAG Consultants Association show how contrasting approaches towards taxation of online gambling in Italy and France can affect how consumers are channelled away from the black market. The first MAG study examining Italy argues that by creating a competitive taxation system, the government managed to limit the black market and consequently increased the level of consumer protection as well as the state income. 33 In contrast, the second MAG study examining France argues that restrictions and high taxation have contributed to the black market which represents 57 per cent of the entire online gambling market in France. 34 In conclusion, there is a trend in Europe that suggests a taxation rate of about 20 per cent on gross gaming revenue appears to be consistent with creating a competitive regime that can channel consumers away from the black market. In contrast, the example of a high turnover tax in France indicates that this type of taxation model has the opposite effect. In-the-run and micro betting Three principal regulated betting markets (the United Kingdom, France, Italy) have adopted positions on in-play betting where the United Kingdom and Italy allows inplay and micro betting while France only allows in-play betting Jürgen Creutzmann, Report on online gambling in the Internal Market, Committee on the Internal Market and Consumer Protection (IMCO), October 14, &lg=EN&fragDocu=FULL Overview of the Italian Regulatory Framework for Gaming, Evolution of the Italian Gaming Regulation , March 2010 < Jeux en ligne in the French Market, Key features, strengths and weaknesses of the French legal gaming offer, February 2011, The Allen Consulting Group 80

94 Other jurisdictions including Spain, Belgium, Denmark, and Poland are still assessing their positions on the activity. While they have not yet regulated online sports betting, Germany and Greece are also known to be considering the regulation of in-play betting. Figure 4.2 highlights the status quo for online sports betting local licensing jurisdictions in December At this point all the European regulators that have assessed in-play betting activities have determined that there are no significant differences between in-play and traditional ante-post betting and have decided to regulate it in the same way, and under the umbrella of existing betting regulation. There remains the possibility though that soon-to-be regulated markets will take a more proscriptive approach. In Greece and Germany, the possibility remains that in-play could be banned altogether. The latest example of a prospective regulator in-play has come in Spain, where while in-play has been included in the draft regulations, a limit of 200 per day has been placed on the players. Effectiveness of approaches with respect to harm minimisation, consumer protection and integrity of sport As discussed, European regulators do not generally consider that separate harm minimisation, consumer protection and sport integrity issues arise with in-the-run betting. Regulators acknowledge the risk of that in-the-run betting poses for sports integrity, but say that they lack specific evidence that the integrity of sports events in their jurisdictions, has been compromised by in-the-run betting per se. These regulators are of the view that since measures regulating online gambling have been introduced relatively recently, it is too soon to evaluate their effectiveness, including with respect to in-the-run betting. Furthermore, regulations are jurisdiction-specific, but online gambling can occur across borders, so it is difficult to isolate the effects of national regulations. The Allen Consulting Group 81

95 Figure 4.2 ONLINE SPORTS BETTING LOCAL LICENSING: APPROACHES TO IN-PLAY Source: GamblingCompliance Limiting access to unlicensed online gambling Payments blocking Payments blocking is most prominently utilised by Norway and the United States, where payments providers such as financial institutions are required to block transactions related to unlicensed online gambling. Between 2006 and April 2011, the United States internet gambling market seemed not only to thrive but grew in the face of the Unlawful Internet Gambling Enforcement Act (UIGEA). Despite the recent enforcement actions, it is accepted that hundreds of offshore websites continue to accept bets from US gamblers. Details of the recent Black Friday investigation in the United States have shown that the payments blocking under the UIGEA have made it more difficult for unlicensed operators to process payments and deposits, although not impossible. This was despite Treasury estimates that the record keeping burden for financial institutions would be approximately one million hours. The Allen Consulting Group 82

96 Norway s payments blocking regulations came into effect on June 1, 2010 with Norway becoming the first jurisdiction to introduce the measure in Europe. 35 The current situation in Norway is that only the country s two gaming monopolies Norsk Tipping and Norsk Risk Toto offer participation in their games via remote channels. Norway conducted a preliminary study into the effectiveness of payments blocking in February It found that while 35 per cent of gamblers said that it had become more difficult to access online gambling sites and 52 per cent indicated that they had circumvented the measures and gambled on offshore sites. A just-released follow up report 36 has concluded that: The intention with the payments ban was not to stop gambling on the Internet, but to create a hurdle to limit the access to overseas gaming sites. To circumvent the ban, overseas companies have implemented payment possibilities via third party solutions that allow for the use of Norwegian credit cards online. There has also been an increase in marketing of overseas companies targeting the Norwegian market. However payment transactions still have, to a certain degree, become more difficult. Twenty eight per cent of players said that it has become more difficult to play online while 33 per cent said that they play less on foreign websites. Surveys show that the numbers of gamblers playing on overseas websites are at the same level as previous years. Turnover has also levelled out since the ban came into force. The payments ban has had an effect on the recruitment of new players to non-licensed Norwegian gaming. This is evident where the chosen payment solutions are difficult to use. There are signs that Norway has become a less attractive market for smaller operators and other companies that wish to respect Norwegian legislation. Some companies have withdrawn for the Norwegian market and/or have stopped accepting Norwegian cards as a payment solution. The larger operators with a substantial customer base still regard Norway as an attractive market and have implemented alternative payment solutions. In general, critics of payments blocking argue that operators using e-wallets and gamblers using foreign accounts can circumvent the measure. ISP blocking Internet Service Providers (ISPs) blocking, utilised most prominently by Italy, where ISPs are required by law or court order as in France to block unlicensed websites. Many others have followed or are following in Italy s path including France, Spain, Denmark, Belgium, Poland, Germany and Cyprus Norway has taken action besides payment blocking. For example in May 2011 the gambling regulator commenced extra territorial action against Eurolotto. In addition the Norwegian tax authorities have also recently taken action against Absolute Poker claiming 180 million Kroner in unpaid value added tax from Madeira Fjord, a shell company set up in Norway in 2007 to channel dividends to Absolute shareholders. The Allen Consulting Group 83

97 Italy has instigated a blacklist approach whereby the regulator identifies unlawful gambling sites and communicates this to the ISP, which must block these sites. The list is produced on a monthly basis. Currently there are over 3,000 sites on the blacklist and this number grows by approximately 100 sites per month. There are up to three million attempts to access the blocked sites each day. France has taken an alternative approach whereby the regulator identifies a specific site and requests the ISP to block that site. Where the ISP fails to comply, the regulator can seek a court order to force compliance. The effectiveness of ISP blocking has been questioned because there are proven ways to circumvent the measure such as, change of the URL by the operator or a change of the gambler s internet settings. Despite this, there are some advantages to ISP blocking, from the perspective that the regulator has the ability to communicate through a page re-direct that there are unlawful and legal offerings. This allows the player to choose a website regulated in the jurisdiction of consumption. Advertising restrictions Advertising restrictions are seen as a key measure to limit access to unlicensed operators. This measure has been used in the United States and many European countries with some effect. The Danish and United Kingdom regulators indicated that advertising restrictions would serve to be more effective than technical measures such as payments blocking and ISP blocking. In the United States, the Department of Justice has taken firm action against those that facilitate online gambling through advertising. In 2007, Microsoft, Google and Yahoo made a US$31.5 million settlement for promoting unlawful online gambling. The settlement resolved claims by the Department that the firms made profits by promoting online gambling on their websites between 1997 and This is one of a number of cases against bodies that have purported to advertise or facilitate online gambling in the US. Despite this, large poker operators have advertised their services in the US through allowing their free play.net sites to sponsor poker tournaments. Denmark, which also has ISP blocking and payments blocking expects that their advertising ban on unlicensed operators will be the most effective of all of their ring fencing measures. According to Mark D Andrea of the United Kingdom Gambling Commission: I don t think you can ever get a 100 per cent watertight market, but strict advertising measures along with regulation that protects consumers but also allows operators to compete is perhaps the best measure. In the United Kingdom, with a lack of control over offshore operators, controlling advertising is a key priority and a defining feature under the existing regulations at least until the new point of consumption approach is introduced. The forms of advertising blocking are described below. The Allen Consulting Group 84

98 In the United States where there has been a ban on internet gambling 37, action has been instigated by the Department of Justice (DOJ) to curb the promotion and advertising of internet gaming. In these instances the charges have generally been aiding and abetting illegal online gambling. Examples include: A DOJ investigation of Microsoft, Google and Yahoo in Missouri in There was a settlement agreement paid (US$31.5m) by the companies to settle the allegations of promoting internet gambling. A DOJ action against Vulcan Sports Media which owns the Sporting News for promoting online gambling between 2000 and The case was settled in 2006 when Sporting News paid $7.2m to the US government. The DOJ seized $3.2m from the Discovery Network for receiving payment by PartyPoker and Sportingbet for advertising space. In 2006 the DOJ issued guidance to land-based casinos hosting poker tournaments stating that it is forbidden to advertise a.com site in conjunction with its freeplay.net site. In the United Kingdom, the Advertising Standards Association (ASA) investigates complaints about advertisements, which are alleged to be in breach of the Committee of Advertising Practice (CAP) and Broadcast Committee of Advertising Practice (BCAP) codes. Where complaints are upheld the ASA requires advertisements to be amended or removed. The advertising codes apply to all gambling operators including remote operators and advertisers permitted to advertise in Great Britain. The aim of the codes is to ensure that gambling advertising is socially responsible. Guidance for operators as to what is socially responsible behaviour can be found in the Gambling Industry Code for Socially Responsible Gambling. The codes also ensure that gambling is not aimed at children or vulnerable people. In France, until their licences have been issued, online operators remain barred from advertising their brand names on French territory. Once they have been granted a licence, Article 7 of the online gambling law states that any advertisement from a legal operator shall be: 1) Accompanied by a warning message against gambling addiction, and a message referring to the information and assistance system planned under section 29; 2) Prohibited in publications aimed at minors; 3) Prohibited on audiovisual programs presented as for minors; 4) Prohibited in online programs aimed at minors; 5) Prohibited in movie theatres during the broadcast of works available to minors. Further rules have been set up in Decree No of June 8, 2010 on advertising The ban is not absolute e.g. lottery tickets can be lawfully sold online Available at The Allen Consulting Group 85

99 The French regulator, the ARJEL 39, is given wide powers under the law to pursue anyone illegally advertising online gambling, with fines of 100,000 to 400,000. Criminal sanctions against online operators can reach three years imprisonment and a fine of 90,000. If the illegal operations are found to have been organised on a larger scale with the participation of more than one company, the fine can reach 300,000 and imprisonment of up to seven years. Among others, the Conseil Superieur de l'audiovisuel CSA already has had occasion to notice W9 (a digital television channel) for broadcasting an advertisement for the PMU 40 on a screen interrupting the Simpsons program which can be regarded as being aimed at minors. ARJEL also sent a notice to RTL 41 for broadcasting for Francaise des Jeux without any warning message. In Italy, the only statute expressly regulating advertising of gaming services is contained in article 4 of Law No. 401 of December according to which media companies that advertise the services of operators non-authorised in Italy are punished with a fine and the imprisonment up to three months. As of today in Italy there are no particular rules on advertising of authorised gaming products. In addition, there is a general prohibition on unlicensed gambling and the opening of gambling houses under article of the Criminal Code. The TULPS 42 Act also criminalises operators who are not in possession of a licence or concession from offering betting. A violation of this Act can result in a number of penalties. In Denmark, promotion of participation in games without a licence is an offence and is liable to a fine. Section 59(2) of the Gaming Act. The Gaming Act also sets up various requirements regarding the marketing of games. Among others, such marketing policies must present the chance of winning in a correct and balanced way so as not to create an impression that the chance of winning is greater than it actually is and must not be aimed at children and young people under the age of 18 (Section 36(1) of the Gaming Act). A licensee can offer bonuses but not in the way that explicitly encourages player to increase its gaming activity or to win back a lost stake (Chapter 6 of Executive Order on Betting and Casino). In Spain, advertising of online activities is clearly forbidden under the general Spanish regulatory framework of advertising when those games lack the compulsory administrative authorisation. The promotion or advertising activities will therefore be considered as an illegal activity according to Article 3 (e) and 8 of Law 34/1988, of General Advertising. Law 13 adopted this same principle incorporating into Article 7 (1) of Law 13/ Autorité de Régulation des Jeux en Ligne (the regulator of online gambling) Pari Mutuel Urbain (the state betting agency) Radio Luxembourg. Despite the name, this is a leading French radio network. Since 1966 it has been known simply as RTL. Testo Unico delle Leggi Pubbliche di Sicurezza: Consolidated Act of Public Safety Laws The Allen Consulting Group 86

100 It is also necessary to consider that advertising in general must comply with Spanish rules that provide special protection to minors: either by means of illegal advertising established in article 3 of the Law 34/1988 on General Advertising (based on article 18.4 of the Spanish Constitution regarding the protection of the minors and youth); or else by means of article 5 of Organic Law of 1/1996 on Protection of minors. Law 1/1996 states that advertising or issuing of messages targeting minors, must be regulated by a special procedure, and that it must not harm their personal development. Direct Enforcement Measures The Black Friday 43 indictments in the United States are a useful example of how enforcement can be used to limit access to online gambling sites. One of the key measures that were used by the United States Attorney for the Southern District of New York was the seizure of assets. 75 foreign and domestic bank accounts were seized under indictments, which sought $1.5 billion from PokerStars, $1 billion from Full Tilt Poker and $500 million from Absolute Poker and Ultimate Bet. In addition to the bank seizures, the law enforcement agencies seized the domain names of the operators and when players sought to access the sites they were left with a message from the Department of Justice stating that the domain name had been seized by the Federal Bureau of Investigation. Most European jurisdictions also have pecuniary penalties for offering unlicensed online gambling. Diplomatic Pressure Other key measures to limit access have been achieved through diplomatic pressure such as the case where Belgium threatened regulators in Alderney and Gibraltar with prosecution in Belgium. This led the Alderney regulator to issue a notice to its licensees that offering services without a licence in Belgium is a violation of Belgian law. International Co-operation International co-operation is also being touted as a key measure for ensuring that customers can be channelled to legal regulated offerings in compliance with local law. While this is a new phenomenon, bi-lateral agreements and memorandums of understanding, such as between the regulators in Italy and France, or Nevada and Alderney are set to be among the first of many more in the years ahead. Moreover, the European Parliament has strongly recommended the type of agreement Italy and France have entered and the assistance such co-operation has for the regulation of online gambling. Following the signing of the agreement between Italy and France, regulators from Germany, Belgium, Hungary, Italy, the Netherlands, Norway and Poland all met in Belgium in July 2011 to discuss their own possible tie-ups and the launch of a new think tank for regulators. 43 Friday 25 April, The Allen Consulting Group 87

101 On February 27, 2012 around 50 gambling regulators met in Brussels to meet with the EU executive about how they could work together on online gambling. The European Commission team has scheduled two more meetings with regulators in mid-april 2012 and the end of May 2012 before it presents a non-legislative communication in the European summer. While the Commission is pushing for more memoranda of understanding, European gambling regulators have tended to be apprehensive about entering into binding arrangements. Despite this, a number of agreements have been signed since the draft was submitted. For example, Denmark has signed memorandums of understanding with Alderney, Jersey, Isle of Man and Gibraltar. Effectiveness of international regulation: an assessment The consensus amongst European regulators and stakeholders is that there is no single measure which can work by itself as an effective tool method of stopping unlicensed online gambling. Rather, they support a portfolio of measures. A joint submission from French online regulator ARJEL and the French Ministry of Finance noted that no singular measure is sufficient: There is no way to ensure a seamless control of illegal sites. Taken separately none of the means identified... is sufficient. 44 Aside from the direct enforcement measures seen recently in the United States, the most prominent appearing to be payments blocking and advertising restrictions. ISP blocking is not favoured, as it is relatively easily circumvented e.g. while web site names can be blocked, IP addresses cannot. What needs emphasis at this time is that these measures are those that are thought to be the most likely to succeed. There is no evidence yet that any of them will work in the long term, as unregulated gambling sites evolve and attempt to evade the regulatory net. Finally, while the benchmark of what constitutes regulatory success has yet to be defined, as many European stakeholders point out, it is not reasonable to set 100 per cent success as the benchmark. Rather, regulation of unlicensed online gambling could be considered successful if it stops a significant proportion of unlicensed online gambling, at reasonable cost. 44 Submission to Greenpaper consultation by Arjel and the French Government, July 2011 < The Allen Consulting Group 88

102 Findings Finding 10: Examples of best practice in other countries that have introduced regulated access to online gambling (Access to online gambling TOR #8) It is too soon to tell what could be classified as best practice, but ring fencing (whereby online gambling service providers are brought inside the tent ) is an emerging trend in Europe. European regulators are confident that ring fencing regimes will provide an effective means of controlling online gambling though none claims that any regulatory solution is or can be infallible. The architecture of ring fencing includes permitted games, a taxation regime, licensing and regulations on server location. The variation in particulars of ring fencing across European countries reflects the lack of a Euroconsensus, e.g. UK regulators taking the view that in-play betting poses no significant difference to traditional betting in relation to harm minimisation and integrity issues; on the other hand both France and Italy have tight restrictions on micro betting. A taxation rate of about 20 per cent on gross gaming revenue appears to be consistent with creating a competitive regime that can channel consumers away from the black market. In contrast, the example of a high turnover tax in France indicates that this type of taxation model has the opposite effect. Finding 11: Examples of best practice in other countries of limiting access to unregistered online gambling services providers (Access to online gambling TOR #9) Various methods are use overseas to limit access. These include payments blocking, ISP blocking, advertising restrictions, direct enforcement measures, diplomatic pressure and international co-operation. Payments and advertising restrictions are most prominent. The effectiveness of these measures has yet to be conclusively determined but payments blocking and advertising restrictions appear to be having the intended effect of restricting unlawful online gambling in some countries, such as the US. The Allen Consulting Group 89

103 Finding 12: Approaches taken overseas to [micro and in-the-run] betting ( In-the-run betting TOR #4) Three principal betting markets have adopted positions on in-the-run (or in play) betting. The United Kingdom and Italy allow in-play including micro betting while France only allows in-play betting but not micro betting. Other European jurisdictions are still considering their positions. To date in-the-run betting has been assessed as being no different in principle to ante-post betting and is regulated the same way, under the umbrella of general betting regulation. It is too soon to judge the effectiveness of overseas approaches to in-the-run and micro betting on harm minimisation, consumer protection and sports integrity. 4.7 Consumer response to regulation on online sites Participants in the focus groups were questioned about their knowledge about whether they know if they are betting on Australian or overseas gambling websites. Participants were also asked if this is of any particular concern to them, specifically whether they were more willing to place online bets with an Australian regulated site rather than an overseas site. Knowledge of whether online gambling sites were Australian owned or based overseas was not particularly strong. There was uncertainty over how to clearly identify site ownership from a URL and a substantial lack of caring about where the site was located. The domain name.com.au signalled local ownership but some mentioned that a foreign parent company could have a local.com.au address. Participants indicated that the ownership did not matter as long as it was a trusted reliable site with good game play, plenty of game options and good payout: I know.com.au s I assume it s Australian registered at least. I wouldn't know about ownership. And that wouldn't worry me because I'm basically, at the moment I only bet on Australian horse racing, I feel confident that it is okay. I think it is Australian because it says.com.au, but I don't care whether it is or it is not. As long as I can deposit and as long as I can withdraw, and once you have made a withdrawal then you feel confident the system works. The Allen Consulting Group 90

104 For some participants, large overseas sites have advantages because of safety in numbers. Large means established and secure; for others, a local site is more safe, secure and trustable. Some overseas sites were called dodgy but this word was never used to describe domestic sites. The security of the transaction, while tied in with bank transfers, credit and debit cards, was generally felt to be trustworthy on all sites. Some players do however protect themselves by owning cards/accounts that were dedicated to gambling activities, i.e., the monies are separated from other accounts. The idea that Australian sites traded in the local dollars whereas overseas sites often traded in US dollars was not a compelling reason for most to play locally based sites. The currency conversions and fees that may be imposed by overseas sites do not appear to be prominent features of players decisions. While some gambling venues/methods such as the TAB have long historical connections with some players, there is little patriotic feeling about online sites: To have it as Australian is not like it is football meat pies kangaroos and poker sites, like if there is no national pride or anything associated that it. The Allen Consulting Group 91

105 Finding Finding 13: For those people who play online, preferences to play on a regulated if one was available rather than on an unregulated (Access to online gambling TOR #5) Australian gambling consumers aren t very well informed about what sites are regulated and if so how they are regulated. They do have a preference for what they perceive to be safe sites, based on size and reputation, and appear to be prepared to manage the risks themselves. More research is needed on whether, given sufficient information and opportunity, they would actually choose a safe, regulated site over an unregulated site (which is similar in other respects). Would prevalence increase if a regulated site were available? A question in the terms of reference for this report is: what is the likelihood that those people who do not currently gamble online would do so if a regulated site was available? Direct evidence to answer this hypothetical, counter factual question does not exist, since the Roy Morgan data by definition relates to online gamblers and the focus group participants for this study were drawn from the Roy Morgan database of online gamblers. However, the focus group evidence suggests, indirectly and tentatively, that there would not be a large increase in prevalence in the presence of a regulated site. This is because: there does not appear to be a lot of consumer awareness about what sites are regulated or not consumers do not really know, or much care, about whether sites are Australian or foreign (unless the sites are based in an obviously disreputable country like Nigeria or other places that are known or thought to host internet scams) i.e. to consumers, the internet transcends national boundaries there already exist sufficient gaming (especially poker) sites that they trust. The Allen Consulting Group 92

106 Chapter 5 Minimising harms from Internet gambling 5.1 Rationale for harm minimisation Gambling in general can have negative criminal, social and economic impacts on society and on the individuals consuming gambling services. Internet gambling is of particular concern due to its unique characteristics such as anonymity and jurisdiction issues. These characteristics make it difficult to monitor and prevent vulnerable groups, such as underage persons, from accessing such services and make it difficult to prevent consumers of such services from being subjected to criminal activities such as fraud. Hence it is important that online harm minimisation measures are put in place to offer individuals who choose to conduct their gambling activities online the same level, if not more, of consumer protection and assurance that are available to terrestrial gamblers. 5.2 Current approach to harm minimisation Literature review From a harm minimisation focus, the IGA targets the supply of online gaming, rather than its demand, by prohibiting the provision of online gambling services to Australian customers but not outlawing Australians from accessing online gaming services through non-australian based sites that are prohibited under the IGA or preventing Australian-based companies from providing online gambling services to customers from other countries. In the Netbets report of the Senate Select Committee on Information Technologies (2000:66) which preceded the Interactive Gambling Act, the Committee suggested that managed liberalisation of interactive gambling must incorporate at least the following harm minimisation policies: Player and third party exclusions and the identification of problem gamblers, through data sharing by online gaming providers, subject to privacy legislation. Time limits on gambling and the continuity of gambling activity, which might include mandatory breaks in play and slowing down of games. Links to problem gambling information, such as that provided at the time by Lasseters with its provision for online chat with a Lasseters employee about problem gambling, and a link to Amity Community Services for more in-depth counselling. Warnings about the risks associated with gambling to be provided to gamblers as part of the log-in process with acknowledgement of the message being a requirement for progressing through the log-in process. Advertising code of conduct similar to those existing for terrestrial gambling products and services. The Allen Consulting Group 93

107 Player manipulation to be avoided by prohibition of features such as an indication that players have had a near miss, which encourages people to continue gambling in the belief that losses are construed as almost wins. Improved customer information about time spent gambling and the potential for taking breaks, clear indications of odds and level of player return and consumers having ready access to their financial records and betting history. National public education campaigns to address risk factors associated with online gambling. Shortly after the introduction of the Interactive Gambling Act in Australia, the United Kingdom Department for Culture, Media & Sport released its position paper on the future regulation of remote gambling (2003) in which it affirmed that one of the core elements of good gambling regulation is player protection and that this applied as much, if not more, to interactive gambling than land-based gambling. The Department suggested that an underlying principle of its planned gambling reforms was informed adult choice, and in the context of interactive gambling, that meant that information is made available to the player and the information must be as accurate as possible, including rules of play, game representation, and rates of return. The Responsible Remote Gambling Measures, is a set of 134 measures grouped into nine objectives aimed at safeguarding a high level of consumer protection and ensuring that remote gambling operators behave responsibly in the European Union. These were published in February 2011 by CEN, the European Committee for Standardization, one of three European Standardization Organizations officially recognised by the EU, with members across 31 European countries (Remote Gambling Association, 2011). CEN Workshop Agreements (CWAs) are selfregulatory agreements intended to complement existing national and EU regulation. This CWA aimed to inform policy makers of the standards required to maintain a responsible, safe and secure remote gambling environment. The CWA was proposed and undertaken by a wide range of experts and stakeholders involved in different aspects of online gambling. It was formally launched in May 2010, with over 25 registered participating stakeholders and was based on more than 600 specific contributions submitted. The nine objectives are: The protection of vulnerable customers including clear and accessible customer information and the ability for players to impose deposit limits, self-exclusion or cooling off periods. The prevention of underage gambling including operator and third-party age and ID verification as well as the use of filtering programs. Combating fraudulent and criminal behaviour the implementation and enforcement of strict security measures and the reporting of any suspected transactions to the authorities. These serve as a complement to the provisions of the 3rd anti-money Laundering Directive (Directive 2005/60/EC). The Allen Consulting Group 94

108 Protection of customer privacy and safeguarding of information including the secure storage of credit card details and a confidentiality clause in employment contracts prohibiting the unauthorised disclosure of information. These measures are in compliance with the Directive on Data Protection (Directive 95/46/EC) and the e-privacy Directive (Directive 2009/136/EC) as applicable. Prompt and accurate customer payments including the logging of all information regarding receipts and payments and the use of appropriate checks and verification. Fair gaming including proper procedures for ensuring games are random and fair, and identifying suspicious sports betting transactions and patterns which might pose a threat to the integrity of sporting competitions. Responsible marketing including ensuring advertising is not aimed at underage individuals and does not suggest gambling is a means of solving financial difficulties. Commitment to customer satisfaction and support including procedures for the proper handling of customer complaints and the availability of third-party mediation. Secure, safe and reliable operating environment including risk-based internal and external security reviews that should be conducted at least annually or in the event of material changes as well as regular training and awareness programs for compliance personnel. These measures were adopted by 30 gambling service providers by October The authors of this report have been unable to locate any evaluation reports on their effectiveness. Gainsbury and Wood (2011) also note the benefits of regulation, suggesting that it could include prominently displayed account information, tools to enable time and money limit pre-commitments, notifications about risky behaviour, self-exclusion protocols, age checks, credit betting restrictions and self-assessment tools. Monaghan (2009) has observed in relation to harm minimisation measures that they are both inconsistent in their design and inconsistently implemented in the online gambling environment, and has suggested that pop-up messages encouraging players to be aware of their own behaviour whilst gambling may be an appropriate responsible gambling strategy as it assists players to gamble within appropriate time and expenditure limits. She suggested that the use of pop-up messages is supported by evidence of their effectiveness in communicating information that is applied to guide behaviour online and in promoting responsible gambling on EGMs. Player information is, as noted above, a key component of previous discussions of harm minimisation practice in relation to interactive gambling. In addition, Parke, Rigbye and Parke (2008), in their comprehensive analysis of research on responsible gambling features, suggested that participants who regularly used responsible gambling features, such as pre-commitment and forms of limit setting, experienced more value in their play, because they were able to gamble longer and win more, without having to increase expenditure. The Allen Consulting Group 95

109 Confirming Parke, Rigby and Parke s (2008) observations on the positive perceptions of responsible gambling features, Griffiths, Wood and Parke (2009) examined players' attitudes and behaviour toward using the social responsibility tool PlayScan designed by the Swedish gaming company Svenska Spel. Via PlayScan, players have the option to utilise various social responsibility control tools (e.g., personal gaming budgets, self-diagnostic tests of gambling habits, selfexclusion options). A total of 2,348 participants took part in an online questionnaire study. Participants were clientele of the Svenska Spel online gambling Web site. Results showed that just over a quarter of players (26 per cent) had used PlayScan. The vast majority of those who had activated PlayScan (almost 9 in 10 users) said that PlayScan was easy to use. Over half of PlayScan users (52 per cent) said it was useful; 19 per cent said it was not. Many features were seen as useful by online gamblers, including limit setting (70 per cent), viewing their gambling profile (49 per cent), self-exclusion facilities (42 per cent), self-diagnostic problem gambling tests (46 per cent), information and support for gambling issues (40 per cent), and gambling profile predictions (36 per cent). In terms of actual (as opposed to theoretical) use, over half of PlayScan users (56 per cent) had set spending limits, 40 per cent had taken a self-diagnostic problem gambling test, and 17 per cent had used a self-exclusion feature. Player Information In relation to electronic gaming machines (EGMs) an early study (Lesieur 1984) suggested that a video screen displaying the amount a gambler has lost or won, rather than the number of credits they have available to them, would help gamblers better understand the real monetary impact of their gambling behaviours. Schellink & Schrans (2002) found that exposure to pop-up messages at 60-minute intervals was associated with a small reduction in session length and a decrease in expenditure among high-risk players. 45 In a follow-up study, Schrans et al. (2004) found that a pop-up message after every 30 minutes produced no significant improvement over a 60-minute interval message. Benhsain, Taillefer and Ladouceur (2004) reported that electronic roulette players who received messages reminding them of the independence among game outcomes entertained fewer erroneous verbalisations and showed less motivation to continue to play than did gamblers who did not receive such reminders. Steenbergh Whelan, Meyers, May, and Floyd (2004) examined whether the presentation of a warning message before an electronic roulette playing session could influence the strength of erroneous thoughts in occasional gamblers. The decrease in the strength of erroneous thoughts confirmed the usefulness of the message. However, it had no impact on the amount of money gambled. Similarly, although Cloutier, Ladouceur, & Sevigny (2006) found that pop-up messages regarding erroneous beliefs produced a significant decrease in these erroneous beliefs at post-test, there is no indication that this learning was translated into subsequent play. 45 This was the only study that examined pop-up messages and gambling expenditure. The Allen Consulting Group 96

110 Overall, these results indicated that pop-up messages effectively captured gambler s attention during play, communicate information that is comprehended and influence gambling-related thoughts, but there is less evidence that they have any sustained impact on behaviour. It has also been suggested that the method of displaying signs, whether static or mobile, influences awareness and recall of harm minimisation messages (Monaghan 2009). The authors of a focus group study of messages on EGMs (Consumer Contact 2003) have identified the following three messages as having most impact on gamblers and therefore the potential to encourage responsible gambling behaviour: have you spent more money on gambling than intended? are you gambling longer than planned? have you felt bad or guilty about your gambling? Having found that the player information lost some of its salience when linked to a message about help seeking, the authors recommended that responsible gambling messages and helpline messages should be separated and distinct. Player protection measures in general Haefeli, Lischer, & Schwarz (2011), in challenging the perception that online gambling is inherently more risky than other forms of gambling, suggested that the feasibility of player protection measures in the online sector might actually be an explanation as to why there is a discrepancy between the theoretically possible very risky behaviour identified in this area and the moderate behaviour that is in fact observed. They provide the following table (Table 5.1) in support of their contention about the feasibility of, if not necessarily the use of, a range of harm minimisation measures available in both land-based gambling and online gambling environments. Table 5.1 PROTECTIVE MEASURES FOR GAMBLERS IN LAND-BASED AND ONLINE GAMBLING Protective measure Land-based Exclusion Partial exclusion from single types of games Not possible Common practice Self-exclusion Common practice Common practice Prescribed exclusion Common practice Common practice Limitation Limit to gambling volume Not possible Common practice Limit to gambling time Not possible Possible Limit to gambling frequency Possible Possible Design of the gaming structure Pop-up messages Possible (for EGMs) Possible Succinct presentation of the gambling time Possible Common practice Succinct presentation of the gambling volume Not possible Common practice Succinct presentation of the gambling frequency Possible Common practice The Allen Consulting Group 97

111 Protective measure Land-based Information offering Awareness material and responsible gambling advice Common practice Common practice Self-tests Possible Common practice Interactive self-help tools Not possible Possible Contact with qualified support structure Common practice Common practice Under-age protection Access limitations Handling credit Possible (but generally not implemented) Common practice No award of credit Common practice Common practice Source: Haefeli, J., Lischer, S. & Schwarz, J. 2011, p Importantly, Haefeli, Lischer and Schwarz (2011) argued an empirical justification for the potential of online gambling sites being able to identify problematic gambling behaviour from analysis of actual gambling behaviour using readily available tracking data on patterns of gambling and expenditure as well by monitoring communications such as s between the gambling service provider and the consumer. In this way, they suggested the online gambling context as lending itself well to early detection of problem gambling. Consultations with gambling service providers All gambling service providers interviewed provided a combination of the following harm minimisation measures on their online gambling sites: information regarding problem gambling e.g. self assessment test, contact details or links to helpline; pre-commitment measures such as setting limits on deposits, losses or amount bet in a session; account based transactions requiring 100 point ID verification process; self-exclusion programs; suspension of account for a specified period of time; staff trained to comply with responsible gambling requirements; integrity agreements with sporting bodies who are able to veto bet types; and funding for helplines and research into problem gambling. Usage of the harm minimisation measures listed above on a voluntary basis. Some gambling service providers indicated the utilisation of harm minimisation measures was low. For example: For Betfair, about 12 per cent of customers set account limits (deposit or loss). Betfair has 100,000 active members, which translates to 12,000 members setting limits. The Allen Consulting Group 98

112 Sportsbet noted that in 2011, 1.6 per cent of active members set deposit limits and 962 members have self-excluded (0.5 per cent). Even though utilisation was low, Sportsbet had no evidence to suggest that there was an increase in problem gambling online, particularly in wagering. Tom Waterhouse Betting reported that there was a higher incidence of people suspending their account compared to self-exclusion. At any one time, about 0.3 per cent of their active members suspend their account, which translates to 30 people. 3 out of 100,000 members have self-excluded. Tabcorp commented that harm minimisation measures provided were not utilised a lot because it is voluntary. About 100 out of 200,000 customers use pre-commitment measures. Focus groups All participants seemed proud of their ability to bet sensibly and keep the behaviour under control. Gambling money was budgeted for and spending was monitored like any other category of expenditure: I have a very strict budget and I know how much I'm spending on my groceries each week, if I have anything left over, there is always something that has to be paid off, gambling comes at the very, very end of that list. I set a limit, you say right I'm going to spend 100 bucks no more, and when it gets to 100 bucks if you have lost it, walk away. Some gamblers controlled their spending by paying the most attention to wagering when special events are on like the Melbourne Cup. Awareness of gambling management tools was higher than their usage. Some had heard of loss limits and gambling time limits: A loss limits, set yourself a limit, $100, hundred and 50 bucks, you reach that you stop. End of story just stop. They have a time limit on some of them that says you have been playing for so long You can lock yourself out after a period of time so that if you have been really bad you can lock yourself out. Not that I have but I am tempted to. Sites that provided information about gambling controls were preferable to the imposition of those controls. The key idea was that gamblers wanted the choice to opt in or not. Participants liked voluntary measures rather than requirements or mandatory restrictions: We don't want to be restricted; we are adults. We will make our choice. There is one strategy I did start using when I started playing Texas hold 'em was real money, I only used 20% of my stash or stack on the table at a time on the table. Harm minimisation measures implemented in overseas jurisdictions This section offers insights on the various harm minimisation measures implemented by selected overseas jurisdictions including Italy, France, Belgium, Denmark and Spain. This is supplemented with interviews with regulators. The Allen Consulting Group 99

113 Regulators were asked two questions: What harm minimisation/player protection measures are in place in your jurisdiction (e.g. bet limits, exclusion policies)? How effective have these harm minimisation/player protection measures been? Table 5.2 provides an international comparison of online gambling harm minimisation measures and a summary of the views expressed by the regulators regarding effectiveness. It should be noted that Norway is different from the other jurisdictions in that currently no forms of interactive gaming are permitted in Norway. However one may use the internet as a channel of distribution for existing terrestrial gaming. At present only Norway s two state monopoly companies Norsk Tipping and Norsk Rikstoto offer participation in their games via remote channels. The Norwegian Government has asked Norsk Tipping to draft a proposal for possible remote interactive gaming in Norway. This is in line with principles in Norwegian gaming law that the largest forms of gaming should be offered by state controlled entities. The Government is of the opinion that this is the best means to protect consumers from criminal activities. In-the-run and micro betting With regards to harm minimisation measures relating to in-play betting (including in-the-run and in-the-run micro betting), there are only a few international jurisdictions that have addressed the issue. Only Italy and France have devised betting strategies surrounding in-play betting, to not only address integrity issues but also for player protection reasons. With France does not allow micro betting, some types of in-play bets are permitted: goals scored, goal scorers and match outcome. These types of bets are set by the sporting bodies that liaise with ARJEL (France s online gambling governing authority) over what is permitted. In addition, most in-play bets in Italy must be on the final outcome of the game. The UK has not addressed in-play betting from a regulatory perspective, stating that they do not believe it should be given different regulatory treatment. Mark D'Andrea from the United Kingdom Gambling Commission does give some indication as to why they have taken this approach: In-play brings betting a little bit closer to the gaming environment where you can push the button and get a result. The measures that we have designed for both the gambling and betting environments have been player spend limits, knowing transaction history etc., are designed to stop problem gambling no matter what the product is. We think that in-play betting is covered by the measures for gaming and betting, although we don t have any player protection measures specifically available for in-play betting, aside from educational such as the rules for each product and so on. The Allen Consulting Group 100

114 Table 5.2 INTERNATIONAL COMPARISON OF HARM MINIMISATION MEASURES Country Harm minimisation measures Regulator interview on effectiveness Italy Licensee certification process covering 60 pages of technical standards, that range from the fairness of the game, the security of the IT systems, to the proper management of the gaming accounts. Dedicated bank account for gaming activities where funds are protected through a bank guarantee. Real-time controls and processing via a central control system managed by the Italian authority for every single gaming transaction. Mandatory self-limitation. Self-exclusion program. Underage gambling prohibited. Licensees must provide contact details of helpline dedicated to problem gamblers. Other measures being considered include real-time alerting system that would warn a single player about a possible compulsive gaming behaviour. France Registration requires presentation of physical identification documents to ensure minors are not able to play online. At registration, operator required to check player s name against the national exclusion list. regulatory agency ARJEL checks that operator has not registered excluded player. Operator legally required to meet the following requirements: - regular pop-up warnings about problem gambling; - no advertising to minors; - players must be made aware of prevention and treatment options; and - players must be able to self-exclude. Players must set mandatory betting limit within 7 days of setting an account. Activation of player account is dependent on setting this limit. Most of the harm minimisation measures have been introduced recently, and it is too early to verify their effectiveness. The first feedback seems to be quite positive. The effectiveness of the controls such as betting limits is questionable because even if the player is required to indicate betting limits, the operator cannot fix these limits. The player sets the limits. Perhaps the legislature would do well to fix a maximum amount. With regards to the effectiveness of self-exclusion and prohibition of play, the system of self-exclusion from a site works well since there are 1.5 per cent of player accounts that have been subject to a request for self-exclusion. However, the player retains the ability to play on other sites. If they exclude themselves voluntarily, they can still open another account on another site and will not be excluded. If the player is on the national exclusion list, he can still play on unlawful websites somewhere. These are limits to the legislation. What might be more logical would be to prevent the player from playing on every sites from the time he has shown the desire to stop playing. The Allen Consulting Group 101

115 Players are able to exclude themselves permanently or voluntarily on a per account per site basis. This is separate from the national exclusion list. Players prohibited from gambling in a physical casino are automatically prohibited from playing online. Belgium Limit on hourly losses. Limit on the number of bonuses or gifts, which can be awarded to players. National exclusion list must be applied to online players. Ban of any form of credit or advances with the same rules imposed on land-based casinos and gaming halls. Pan-European discussion group put in place on player protection, which includes regulators from seven countries. Denmark The Danish Gambling Authority has created a register of self-excluded persons, which any Dane can join and subsequently will be unable to create and/or use gambling accounts with licensed operators. To participate in online gaming, a player must be registered as a customer of the licensee. Registration requires the provision of player identification information, which is kept for five years after the end of the customer relationship. Customer verification must be continuously monitored. Licensee must meet the following requirements: - prohibit underage gaming; - provide information on responsible gaming; - facilitate access to self-administered test for gaming addiction; - provide information on treatment centre; - ability to set limits on deposits; - temporary or permanent exclusions program; - bonuses must be explained in a "clear, lucid manner within the immediate context of the offer". With regards to the effectiveness of warning messages, there is a single message that runs on sites or marketing materials with a phone number next to it. The number does not work very well as most players think it's the customer service number. They have not understood that is it a helpline. What has emerged is that the message is not deterrent enough. It has been suggested to amend the content of messages as it has been done in the fight against obesity - with different messages, which can be easily memorized by players. Overall these measures work fairly well. What has worked really well, rather than the messages, is system in place for opening player account. Checks are performed to ensure that the player is allowed to play and not a minor. Not available. Unable to comment since the new legislation has not yet been implemented. The Allen Consulting Group 102

116 Norway Players are limited to NOK kroner (Euros 1250) per day for all gaming on Norsk Tipping`s products via the internet. All players have to be registered. The possibility of self-exclusion is also in place. Surveys prove that there are few problems connected to gaming licensed in Norway. Most problem gambling is related to remote gaming without a Norwegian licence offered from servers outside Norway. United Kingdom Player identification to prevent underage gambling, duplicate accounts and betting by individuals involved in an event. Communication of account activity in an easily comprehensible manner. Pre-commitment measures. Feedback on player behaviour e.g. self-test, alert systems. Self-exclusion options. Customer support The effectiveness issue is complicated as most of the research we do is on high level information such as participation and may not specifically look at our controls for remote gambling, in addition most of the operators are not bound by our requirements as they are not licensed by us. In addition, the white listed jurisdictions and the other European remote jurisdictions have similar measures in place and while some of these are enforced to a lesser extent they are quite similar. We do have limited research on these issues, however what we can go off is our recording of complaints by customers. If self-exclusion is not enforced by a jurisdiction, customers may be left dealing with the operator, which is a lower level of protection. Self-exclusion is quite powerful but the borderless nature of the internet means that it may not be a watertight solution. Spain Operators must create a responsible gaming policy which adheres to a set of responsible gaming principles. Operators need to meet the following requirements: - provide the public with information to make informed and conscious decisions regarding gaming activities and to promote moderate and responsible gaming attitudes; - publicise rules regarding the nature of each game; - prohibit participation of minors and people on national exclusion lists; - ban on providing credit to participants; and - ban gaming activities to those under the age of 18. Source: GamblingCompliance The Allen Consulting Group 103

117 5.3 Assessment of harm minimisation effectiveness measures Because they have implemented only recently, it is too soon to tell whether the harm minimisation measures discussed in this chapter have been effective. As far as the authors of this report are aware, there has been no study yet of their effectiveness. In interviews, European regulators offered the following observations: Most of the abovementioned measures have been introduced recently, and it is too early to verify their effectiveness. Anyway, the first feedback seems to be quite positive (Italy) Can t say because the new legislation has not yet been implemented (Denmark) I can t give you a good answer there The effectiveness issue is complicated as most of the research we do is on high level information such as participation and may not specifically look at our controls for remote gambling (Spain) Surveys prove that there are few problems connected to gaming licensed in Norway. Most problem gambling is related to remote gaming without a Norwegian licence offered from servers outside Norway. (Norway) Further complicating the assessment of harm minimisation measures is the fact that only four European states provide nationwide prevalence statistics for problem gambling. These are the UK, Belgium, Netherlands and Estonia. It is expected by European stakeholders that as more jurisdictions regulate online gambling, more studies on the effectiveness of harm minimisation measures will become available, However, at the present time, while a variety of measures has been put in place, there is no robust evidence as to which are the most effective. Finding Finding 14: Effectiveness of different harm minimisation measures (Access to online gambling TOR #7) The research literature, while sparse, suggests a number of measures which could be effective in reducing harms from online gambling, including pop-up messages, spending pre-commitment and social responsibility response tools (e.g. personal budgets and self-exclusion options). Australian gambling service providers offer a variety of voluntary harm minimisation measures, such as pre-commitment and self-exclusion. The use of these is generally low, which could be interpreted in a number of ways: they might be ineffective, or they might not be needed. Overseas, harm minimisation measures have been introduced only quite recently and it is too soon to tell whether they are working. The Allen Consulting Group 104

118 5.4 Substitution effect if online in-the-run betting (including micro betting) are allowed Gambling service providers were of the opinion that allowing online in-the-run and in-the-run micro betting was unlikely to lead to an increase incidence of problem gambling and was also unlikely to encourage more online gambling leading an increase in the gambling market (unless there is a major innovation). The reasons highlighted by gambling service providers were that: consumers would substitute between different betting products; Australian consumers would choose to bet on Australia sites rather than overseas sites; and the gambling market size would not increase. Shifting between types of gambling and mediums of betting Sportsbet stated that there was no evidence to suggest that having more betting opportunities (for example via micro bets) would lead to problem gambling. Sportsbet suggested that problem gambling usually occurred on EGM because more bets per minute could be made and that the United Kingdom also found no evidence suggesting that gambling online leads to high prevalence in problem gambling. Tom Waterhouse Betting believed that there would be a substitution effect from other bet types. It would be a split between different types of bets and across different operators. If current prohibitions were made legal, they would move into this space so as to offer customers the full suite of products. Competition makes it necessary for a gambling service provider to offer the most product options to prevent clients from betting with a competitor. Tabcorp was of the opinion that if such bets were allowed online, there would be a transfer of customers from phone betting to internet betting for these types of bets. While Tabcorp recognised that it might lead to increase in problem gambling but did not think it was likely because people were aware of the limited amount of resource they could afford to place bets. Shifting between operators Betfair, TOTE Tasmania and Tabcorp believed that if certain types of prohibited online gambling activities were allowed and regulated in Australia, Australians would choose to bet on Australian sites and also choose regulated sites over unregulated ones with more protection measures. The Allen Consulting Group 105

119 Sportingbet/Centrebet believed that Australian consumers would migrate from overseas sites to Australian sites provided: there is sufficient marketing regarding protection measures and dispute resolution via regulator; Australian providers bring their service to the international level; and Australian operators provide the services that the customers want. Gambling market size Sportsbet believed there could be an increase in the market size if online in-the-run and micro bets were legalised in Australia. Tom Waterhouse Betting offered a different view in that unless there was a major innovation, the market was unlikely to grow. The gambling market has been fairly constant over the past years. If online in-the-run or in-the-run micro bets were made available, it would make it more competitive on the internet, as the gambling pie is constant. Tabcorp did not believe that there would be an increase in the actual pool of money (and hence the gambling market) used to bet because of the transfer effect (from betting on overseas sites to local sites) and also due to the limited amount of money anyone could afford to lose. The effect would be a transfer of that amount of money from one mode to another and from one operator to another. Views of problem gambling counsellors Problem gambling counsellors did not have views on substitution per se, but some did believe that the continuous nature of in-the-run online betting could lead to more betting overall. The Allen Consulting Group 106

120 Appendix A Research specification A.1 Access to Gambling The research report should cover information on: 1. current prevalence of online gambling by Australians on Australian based sites and overseas based sites. This should cover both online gambling that is allowed by the IGA as well as online gambling that is prohibited to be provided under the IGA (including online poker card playing) 2. the relative prevalence of problem gambling amongst Australian online gamblers on both allowed and prohibited services 3. relative frequency of different payment methods used by Australian online gamblers using both allowed and prohibited services 4. problem online gambling risk factors including demographic and other related risk factors and whether there are different risk factors associated with different types of online gambling such as online poker games (both tournament online poker and cash games) or sports wagering 5. for those people that already gamble online, preferences to play on a regulated site if one was available rather than on an unregulated site 6. for those that do not currently gamble online, likelihood of gambling on a regulated site if a regulated site was available 7. effectiveness of different harm minimisation measures for online gambling including those adopted overseas as well as those suggested by the Productivity Commission: a. player identification to prevent underage play, duplicate accounts and betting by individuals involved in an event b. communication of account activity in an easily comprehendible and meaningful format c. pre-commitment strategies for time and money d. education about games, statistical probabilities of winning and responsible gambling including practical strategies e. dynamic warnings f. feedback on player behaviour including self-tests and alert systems which identify potentially problematic play g. self-exclusion options h. customer support The Allen Consulting Group 107

121 8. examples of best practice in other countries that have introduced regulated access to online gambling, including the architecture of regulation and taxation. 9. examples of best practice in other countries of limiting access to unregistered online gambling service providers A.2 In-the-run betting The research report should cover information on: 1. the prevalence of in-the-run betting and micro betting in Australia and overseas, whether using telephone or online betting services or other services 2. the extent to which these types of gambling raise additional risks from a problem gambling perspective, including whether there are different problem gambling risks associated with betting on the final outcome of an event after the event has started compared to micro or ball by ball betting 3. the issues that arise from having different rules regarding the same services delivered online and via the telephone 4. approaches taken overseas to these types of online wagering, including regulatory measures, harm minimisation measures and measures to protect consumers and the integrity of sport 5. the extent to which permitting either of these two types of wagering online is likely to create a greater level of risk in terms of problem gambling, consumer protection and the integrity of a sports event this should be considered in terms of accessing these services both online or via the telephone 6. what additional measures might be applied to in-the-run betting and micro betting to preserve the integrity of sports events and consumer protection The Allen Consulting Group 108

122 Appendix B Terms of Reference for 2011 Act Review Having regard to the issues facing the enforcement of the Interactive Gambling Act 2001 (the IGA), the Department of Broadband, Communications and the Digital Economy is to undertake a review of the operation of the IGA, with reference to: the growth of online gambling services (both regulated and unregulated) in Australia and overseas, and the risk of this to the incidence of problem gambling; the development of new technologies, including smart-phones, and the convergence of existing technologies that may accelerate the current trend towards the take-up of online gambling services in Australia and overseas; the adequacy of the existing provisions of the IGA, including technical, operational and enforcement issues relating to the prohibition of interactive gambling services and the advertising of such services; consideration, where appropriate, of technology and platform neutrality including current distinctions relating to 'betting on the run' and micro betting international regulatory approaches to online gambling services including consideration of their effectiveness and cost; examination of the social, tax, jurisdictional and enforcement aspects of regulated access to interactive gambling services currently prohibited under the IGA; harm minimisation strategies for online gambling; and the findings of the Joint Select Committee on Gambling Reform inquiry into interactive and online gambling and gambling advertising and the Productivity Commission Inquiry Report on Gambling (2010), and any other relevant matters. In undertaking the review, the department will consult with key stakeholders, states and territories and the broader Australian community. The department will commission additional research as needed. The department is to provide a report of its findings to the Minister for Broadband, Communications and the Digital Economy by the first half of 2012, subject to the Joint Select Committee on Gambling Reform reporting by the end of The Allen Consulting Group 109

123 Appendix C Roy Morgan Research Single Source Database Player Profile C.1 How to read the tables The explanation to the acronyms used in the tables are listed below: The uc represents the actual number of people interviewed. The wc represents the total population. The wc is shown in thousands, which is indicated by the POPN ('000) at the top of the table. You need to add 3 zeros when reading the weighted count. The v% shows what percentage of the column group belongs to the row group. The ix are indices that look at the propensity of people to behave in certain ways or have a particular attitude versus the total group of respondents. Indices provide a measure against the average of the Total column variable selected (base = 100). Scores above 100 indicate the group is over-represented versus the total, whereas scores below show under representation versus the total. The se represents Standard Error. The cl represents confidence limits, which are measured at 95%. To account for sampling error, the confidence limits for the mean are displayed. This tells us the range by which the mean might vary, 95% of the time. The sig represents significance testing, set at 99% (***), 95% (**) and 90% (*). The significance tests performed are two-tailed test of each column against the total column. The tables have been filtered to only those Australians aged 18+ who were interviewed in the October September 2011 quarters. A dash (=) indicates that there were no responses. Additional explanation on some of the row variables surveyed is provided below: Discretionary expenditure A large number of questions have been selected from the Roy Morgan Single Source database that deal with a variety of issues such as expenditure, leisure, income and entertainment. The questions selected primarily measure discretionary type expenditure including proposed purchases. Sources of information derive from questions on credit card, travel and accommodation, fast food, wine, proposed spending on items. Household income is also taken into account. Responses to each question are scored for each respondent with factors applied to the discretionary level of spend as well The Allen Consulting Group 110

124 Then for each person a total spending score is calculated based on their combined responses to the series of discretionary expenditure questions. Three groups have been created (each one representing approximately one third of the population 14yrs +) according to their level of discretionary expenditure big, medium and light spenders. Socio economic scale Each respondent is given a score of no more than 60 according to their status in each of the following categories education level of respondent, income of respondent and occupation of respondent. The respondent s scores for each of these three categories are tallied to give a score out of 180. We then look at a frequency distribution of the scores and divide the population into five even groups of 20%, i.e. quintiles. The AB quintile is the highest level - people in this quintile have the highest scores. C.2 Demographic characteristics Data is provided in Table C.1. C.3 Attitudes and Leisure & Entertainment Spend Data are provided in Table C.2 and Table C.3. C.4 Types of Gambling Data is provided in Table C.4. C.5 Frequency of Bets Placed in the last 3 months Data on the frequency of any bet placed is provided in Table C.5 while data related to the frequency of placing racing bets and sporting bets are presented in Table C.6 and Table C.7. C.6 Average Spend on Bets in the last 3 months Data on the average spend any bet placed is provided in Table C.8 while data related to the average spend on racing bets and sporting bets are presented Table C.9 and Table C.10. The Allen Consulting Group 111

125 Table C.1 DEMOGRAPHIC CHARACTERISTICS Characteristics Total Population 18+ Total Gamblers (last 12 months) Gamble but not online Interactive Gamblers (online or phone) Gamblers (Wagering and Gaming) Gaming Wagerers Sample size uc 36,386 12,270 13,391 1,278 1, Population '000 wc 17,187 6,724 6, Age Average Age mn sig = = *** *** *** *** *** uc wc v% 11.9% 11.0% 11.1% 9.2% 9.3% 17.3% 7.2% se 0.2% 0.4% 0.4% 1.1% 1.1% 3.3% 1.1% ix sig *** ** *** ** * *** uc wc v% 18.1% 17.7% 16.7% 23.9% 25.7% 29.5% 25.3% se 0.3% 0.5% 0.5% 1.6% 1.7% 3.9% 1.9% ix sig = *** *** *** *** *** uc wc v% 28.4% 28.1% 27.3% 35.6% 36.6% 33.3% 37.9% se 0.3% 0.6% 0.5% 1.8% 1.9% 4.1% 2.1% The Allen Consulting Group 112

126 Characteristics Total Population 18+ Total Gamblers (last 12 months) Gamble but not online Interactive Gamblers (online or phone) Gamblers (Wagering and Gaming) Gaming Wagerers ix sig = ** *** *** = *** uc wc v% 23.7% 25.9% 26.5% 22.6% 22.0% 14.0% 23.4% se 0.3% 0.6% 0.5% 1.6% 1.6% 3.0% 1.8% ix sig *** *** = = *** = 65 and Over uc wc v% 17.9% 17.4% 18.4% 8.8% 6.4% 6.0% 6.2% se 0.3% 0.5% 0.5% 1.1% 1.0% 2.1% 1.0% ix sig = = *** *** *** *** Sex Men uc wc v% 49.1% 51.3% 49.0% 72.5% 72.5% 62.8% 75.7% se 0.4% 0.6% 0.6% 1.7% 1.8% 4.2% 1.9% ix sig *** = *** *** *** *** Women uc The Allen Consulting Group 113

127 Characteristics Total Population 18+ Total Gamblers (last 12 months) Gamble but not online Interactive Gamblers (online or phone) Gamblers (Wagering and Gaming) Gaming Wagerers wc v% 50.9% 48.7% 51.0% 27.5% 27.5% 37.2% 24.3% se 0.4% 0.6% 0.6% 1.7% 1.8% 4.2% 1.9% ix sig *** = *** *** *** *** Country of birth Australia uc wc v% 74.4% 80.9% 80.8% 82.4% 81.3% 78.3% 82.0% se 0.3% 0.5% 0.5% 1.4% 1.5% 3.6% 1.7% ix sig *** *** *** *** = *** Asia uc wc v% 8.0% 3.7% 3.6% 4.8% 5.4% 6.9% 5.1% se 0.2% 0.2% 0.2% 0.8% 0.9% 2.2% 1.0% ix sig *** *** *** *** = *** Europe uc wc v% 11.2% 10.2% 10.6% 7.4% 7.9% 7.2% 8.0% se 0.2% 0.4% 0.4% 1.0% 1.1% 2.2% 1.2% ix The Allen Consulting Group 114

128 Characteristics Total Population 18+ Total Gamblers (last 12 months) Gamble but not online Interactive Gamblers (online or phone) Gamblers (Wagering and Gaming) Gaming Wagerers sig *** * *** *** * *** New Zealand uc wc v% 2.7% 3.0% 2.9% 3.5% 3.6% 4.1% 3.3% se 0.1% 0.2% 0.2% 0.7% 0.7% 1.7% 0.8% ix sig * = = = = = Other uc wc v% 3.7% 2.1% 2.1% 1.9% 1.9% 3.5% 1.5% se 0.1% 0.2% 0.2% 0.5% 0.5% 1.6% 0.5% ix sig = *** *** *** *** = *** Marital status Married/De Facto uc wc v% 66.2% 66.9% 66.8% 68.0% 68.2% 55.9% 71.7% se 0.3% 0.6% 0.6% 1.7% 1.8% 4.3% 1.9% ix sig = = = = ** *** Single/Not Married uc wc v% 33.8% 33.1% 33.2% 32.0% 31.8% 44.1% 28.3% The Allen Consulting Group 115

129 Characteristics Total Population 18+ Total Gamblers (last 12 months) Gamble but not online Interactive Gamblers (online or phone) Gamblers (Wagering and Gaming) Gaming Wagerers se 0.3% 0.6% 0.6% 1.7% 1.8% 4.3% 1.9% ix sig = = = = ** *** Income of respondent Average Income mn sig = *** * *** *** * *** Under $30,000 uc wc v% 48.4% 44.7% 46.2% 33.6% 31.7% 55.3% 25.6% se 0.4% 0.6% 0.6% 1.8% 1.8% 4.3% 1.9% ix sig *** *** *** *** = *** $30,000 - $49,999 uc wc v% 19.6% 20.9% 21.3% 17.5% 18.1% 18.6% 18.5% se 0.3% 0.5% 0.5% 1.4% 1.5% 3.4% 1.7% ix sig *** *** = = = = $50,000 - $69,999 uc wc v% 13.5% 14.5% 14.1% 18.9% 19.0% 14.9% 20.3% se 0.3% 0.4% 0.4% 1.5% 1.5% 3.1% 1.7% ix The Allen Consulting Group 116

130 Characteristics Total Population 18+ Total Gamblers (last 12 months) Gamble but not online Interactive Gamblers (online or phone) Gamblers (Wagering and Gaming) Gaming Wagerers sig *** * *** *** = *** $70,000 - $89,999 uc wc v% 8.5% 9.4% 8.8% 13.4% 13.9% 6.5% 15.6% se 0.2% 0.4% 0.3% 1.3% 1.4% 2.1% 1.6% ix sig *** = *** *** = *** $90,000 - $109,999 uc wc v% 4.4% 4.4% 4.1% 6.3% 6.4% 1.9% 7.2% se 0.2% 0.3% 0.2% 0.9% 1.0% 1.2% 1.1% ix sig = = ** ** ** *** $110,000+ uc wc v% 5.6% 6.2% 5.5% 10.5% 10.9% 2.8% 12.8% se 0.2% 0.3% 0.3% 1.1% 1.2% 1.4% 1.4% ix sig ** = *** *** ** *** Education level Primary School uc wc v% 1.9% 1.9% 2.1% 1.5% 0.8% 1.4% 0.6% The Allen Consulting Group 117

131 Characteristics Total Population 18+ Total Gamblers (last 12 months) Gamble but not online Interactive Gamblers (online or phone) Gamblers (Wagering and Gaming) Gaming Wagerers se 0.1% 0.2% 0.2% 0.5% 0.4% 1.0% 0.3% ix sig = = = *** = *** Some Secondary/Tech. uc Intermediate/Form 4/Year 10 wc v% 13.1% 14.4% 15.2% 9.4% 8.4% 13.3% 7.3% se 0.2% 0.4% 0.4% 1.1% 1.1% 2.9% 1.1% ix sig *** *** *** *** = *** uc wc v% 10.6% 13.1% 13.8% 9.8% 8.9% 12.9% 7.7% se 0.2% 0.4% 0.4% 1.1% 1.1% 2.9% 1.2% ix sig *** *** = = = ** 5th form/leaving/year 11 uc Finished Tech./Matric/HSC/Year 12 wc v% 5.1% 5.9% 6.1% 6.2% 6.0% 4.8% 6.3% se 0.2% 0.3% 0.3% 0.9% 0.9% 1.9% 1.1% ix sig *** *** = = = = uc wc The Allen Consulting Group 118

132 Characteristics Total Population 18+ Total Gamblers (last 12 months) Gamble but not online Interactive Gamblers (online or phone) Gamblers (Wagering and Gaming) Gaming Wagerers v% 19.6% 23.0% 22.0% 25.7% 26.6% 30.9% 25.3% se 0.3% 0.5% 0.5% 1.6% 1.7% 4.0% 1.9% ix sig *** *** *** *** *** *** Some/ Now at University uc wc v% 10.3% 9.3% 9.1% 11.3% 11.1% 12.7% 10.7% se 0.2% 0.4% 0.3% 1.2% 1.2% 2.9% 1.3% ix sig *** *** = = = = Have Diploma or Degree uc wc v% 39.3% 32.4% 31.6% 36.1% 38.2% 23.9% 41.9% se 0.4% 0.6% 0.6% 1.8% 1.9% 3.7% 2.1% ix sig *** *** * = *** = Work status of respondent Full Time uc wc v% 40.4% 44.8% 43.1% 58.3% 60.9% 43.1% 65.8% se 0.4% 0.6% 0.6% 1.8% 1.9% 4.3% 2.1% ix sig *** *** *** *** = *** The Allen Consulting Group 119

133 Characteristics Total Population 18+ Total Gamblers (last 12 months) Gamble but not online Interactive Gamblers (online or phone) Gamblers (Wagering and Gaming) Gaming Wagerers Part Time uc wc v% 20.4% 18.3% 19.1% 14.6% 15.2% 20.5% 14.2% se 0.3% 0.5% 0.5% 1.3% 1.4% 3.5% 1.5% ix sig *** *** *** *** = *** TOTAL Now Employed uc wc v% 60.8% 63.2% 62.2% 72.9% 76.1% 63.6% 80.0% se 0.4% 0.6% 0.6% 1.7% 1.7% 4.2% 1.7% ix sig *** *** *** *** = *** Home Duties uc wc v% 7.2% 6.4% 6.3% 4.4% 4.6% 6.9% 3.9% se 0.2% 0.3% 0.3% 0.8% 0.8% 2.2% 0.8% ix sig *** *** *** *** = *** Don't Work uc wc v% 3.4% 3.3% 3.3% 3.0% 2.9% 5.7% 2.2% se 0.1% 0.2% 0.2% 0.6% 0.7% 2.0% 0.6% ix The Allen Consulting Group 120

134 Characteristics Total Population 18+ Total Gamblers (last 12 months) Gamble but not online Interactive Gamblers (online or phone) Gamblers (Wagering and Gaming) Gaming Wagerers sig = = = = = * Looking for Full Time work uc wc v% 2.4% 2.3% 2.4% 2.2% 1.9% 6.4% 0.7% se 0.1% 0.2% 0.2% 0.5% 0.5% 2.1% 0.4% ix sig = = = = * *** Looking for Part Time Work uc wc v% 2.0% 1.7% 1.6% 1.9% 2.1% 4.1% 1.5% se 0.1% 0.2% 0.2% 0.5% 0.6% 1.7% 0.5% ix sig * *** = = = = Retired uc Students - not in employment wc v% 20.6% 20.9% 22.0% 13.0% 10.3% 9.1% 10.2% se 0.3% 0.5% 0.5% 1.2% 1.2% 2.5% 1.3% ix sig = *** *** *** *** *** uc wc v% 3.6% 2.2% 2.1% 2.5% 2.1% 4.2% 1.6% se 0.1% 0.2% 0.2% 0.6% 0.6% 1.7% 0.5% The Allen Consulting Group 121

135 Characteristics Total Population 18+ Total Gamblers (last 12 months) Gamble but not online Interactive Gamblers (online or phone) Gamblers (Wagering and Gaming) Gaming Wagerers ix sig *** *** * *** = *** TOTAL Not Employed uc wc v% 39.2% 36.8% 37.8% 27.1% 23.9% 36.4% 20.0% se 0.4% 0.6% 0.6% 1.7% 1.7% 4.2% 1.7% ix sig *** *** *** *** = *** Occupation of respondent Professional/Manager uc wc v% 21.3% 21.8% 20.3% 32.1% 34.0% 21.3% 37.8% se 0.3% 0.5% 0.5% 1.7% 1.9% 3.5% 2.1% ix sig = *** *** *** = *** White Collar Workers uc wc v% 18.3% 17.6% 18.4% 13.5% 14.4% 14.7% 14.0% se 0.3% 0.5% 0.5% 1.3% 1.4% 3.1% 1.5% ix sig * = *** *** = *** Skilled Workers uc The Allen Consulting Group 122

136 Characteristics Total Population 18+ Total Gamblers (last 12 months) Gamble but not online Interactive Gamblers (online or phone) Gamblers (Wagering and Gaming) Gaming Wagerers wc v% 6.9% 8.6% 8.3% 10.0% 10.1% 7.3% 11.0% se 0.2% 0.4% 0.3% 1.1% 1.2% 2.3% 1.4% ix sig *** *** *** *** = *** Farm Owner uc wc v% 0.4% 0.4% 0.4% 0.2% 0.2% 0.2% 0.1% se 0.0% 0.1% 0.1% 0.1% 0.2% 0.4% 0.2% ix sig = = ** * = * Others (incl. Semi/Unskilled) uc wc v% 13.8% 14.8% 14.9% 17.1% 17.5% 20.1% 17.0% se 0.3% 0.5% 0.4% 1.4% 1.5% 3.5% 1.6% ix sig *** *** ** ** * ** Full Time Workers uc wc v% 40.4% 44.8% 43.1% 58.3% 60.9% 43.1% 65.8% se 0.4% 0.6% 0.6% 1.8% 1.9% 4.3% 2.1% ix sig *** *** *** *** = *** The Allen Consulting Group 123

137 Characteristics Total Population 18+ Total Gamblers (last 12 months) Gamble but not online Interactive Gamblers (online or phone) Gamblers (Wagering and Gaming) Gaming Wagerers Part Time Workers uc wc v% 20.4% 18.3% 19.1% 14.6% 15.2% 20.5% 14.2% se 0.3% 0.5% 0.5% 1.3% 1.4% 3.5% 1.5% ix sig *** *** *** *** = *** TOTAL Not Employed uc wc v% 39.2% 36.8% 37.8% 27.1% 23.9% 36.4% 20.0% se 0.4% 0.6% 0.6% 1.7% 1.7% 4.2% 1.7% ix sig *** *** *** *** = *** TOTAL uc Current living arrangements wc v% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% se n/a n/a n/a n/a n/a n/a n/a ix sig n/a n/a n/a n/a n/a n/a Live Alone uc wc v% 10.0% 10.2% 10.5% 7.2% 6.5% 6.2% 6.3% se 0.2% 0.4% 0.4% 1.0% 1.0% 2.1% 1.0% The Allen Consulting Group 124

138 Characteristics Total Population 18+ Total Gamblers (last 12 months) Gamble but not online Interactive Gamblers (online or phone) Gamblers (Wagering and Gaming) Gaming Wagerers ix sig = * *** *** * *** Partner And No Children uc wc v% 29.2% 31.2% 32.0% 28.1% 26.3% 22.9% 27.2% se 0.3% 0.6% 0.6% 1.7% 1.7% 3.6% 1.9% ix sig *** *** = * * = Partner And Children uc wc v% 36.8% 36.0% 35.1% 41.8% 43.9% 36.0% 46.2% se 0.4% 0.6% 0.6% 1.8% 2.0% 4.1% 2.2% ix sig = *** *** *** = *** Single Parent uc wc v% 4.8% 4.7% 5.0% 3.0% 3.1% 3.5% 2.8% se 0.2% 0.3% 0.3% 0.6% 0.7% 1.6% 0.7% ix sig = = *** ** = *** With Parents uc wc v% 9.0% 8.5% 8.2% 10.0% 10.1% 13.2% 8.8% The Allen Consulting Group 125

139 Characteristics Total Population 18+ Total Gamblers (last 12 months) Gamble but not online Interactive Gamblers (online or phone) Gamblers (Wagering and Gaming) Gaming Wagerers se 0.2% 0.4% 0.3% 1.1% 1.2% 2.9% 1.2% ix sig = *** = = = = Boarder uc wc v% 0.6% 0.7% 0.7% 0.3% 0.3% 0.4% se 0.1% 0.1% 0.1% 0.2% 0.2% 0.3% ix sig = = * = = Shared Household uc wc v% 9.4% 8.6% 8.3% 10.0% 10.4% 18.9% 8.8% se 0.2% 0.4% 0.3% 1.1% 1.2% 3.4% 1.2% ix sig *** *** = = *** = Other uc wc v% 0.7% 0.5% 0.5% 0.4% 0.3% 0.9% 0.2% se 0.1% 0.1% 0.1% 0.2% 0.2% 0.8% 0.2% ix sig ** ** = = = ** Socio-economic scale AB Quintile uc The Allen Consulting Group 126

140 Characteristics Total Population 18+ Total Gamblers (last 12 months) Gamble but not online Interactive Gamblers (online or phone) Gamblers (Wagering and Gaming) Gaming Wagerers wc v% 21.2% 18.6% 17.7% 25.9% 27.6% 11.9% 31.3% se 0.3% 0.5% 0.5% 1.6% 1.8% 2.8% 2.0% ix sig *** *** *** *** *** *** C Quintile uc wc v% 20.4% 20.4% 19.9% 22.5% 23.2% 22.1% 24.0% se 0.3% 0.5% 0.5% 1.6% 1.7% 3.6% 1.8% ix sig = = = * = ** D Quintile uc wc v% 20.1% 20.7% 20.5% 21.8% 21.9% 19.4% 22.3% se 0.3% 0.5% 0.5% 1.5% 1.6% 3.4% 1.8% ix sig = = = = = = E Quintile uc wc v% 19.4% 20.1% 20.4% 17.5% 16.8% 25.8% 14.8% se 0.3% 0.5% 0.5% 1.4% 1.5% 3.8% 1.5% ix sig = ** = * * *** The Allen Consulting Group 127

141 Characteristics Total Population 18+ Total Gamblers (last 12 months) Gamble but not online Interactive Gamblers (online or phone) Gamblers (Wagering and Gaming) Gaming Wagerers FG Quintile uc wc v% 18.8% 20.2% 21.4% 12.3% 10.4% 20.9% 7.6% se 0.3% 0.5% 0.5% 1.2% 1.2% 3.5% 1.1% ix sig *** *** *** *** = *** Discretionary expenditure Big spenders uc wc v% 35.1% 40.2% 38.3% 53.0% 55.2% 44.5% 59.1% se 0.4% 0.6% 0.6% 1.9% 2.0% 4.3% 2.1% ix sig *** *** *** *** ** *** Medium spenders uc wc v% 32.7% 32.1% 32.9% 28.1% 28.0% 26.0% 28.1% se 0.3% 0.6% 0.6% 1.7% 1.8% 3.8% 1.9% ix sig = = *** *** * ** Light spenders uc wc v% 32.2% 27.7% 28.8% 18.9% 16.8% 29.5% 12.8% se 0.3% 0.6% 0.5% 1.5% 1.5% 3.9% 1.4% The Allen Consulting Group 128

142 Characteristics Total Population 18+ Total Gamblers (last 12 months) Gamble but not online Interactive Gamblers (online or phone) Gamblers (Wagering and Gaming) Gaming Wagerers ix sig *** *** *** *** = *** Discretionary expenditure Own Home uc wc v% 37.2% 36.0% 37.3% 30.1% 27.6% 24.6% 27.8% se 0.4% 0.6% 0.6% 1.7% 1.8% 3.7% 1.9% ix sig ** = *** *** *** *** Paying Off uc wc v% 33.4% 35.2% 34.5% 40.1% 41.2% 26.4% 44.7% se 0.3% 0.6% 0.6% 1.8% 1.9% 3.8% 2.2% ix sig *** ** *** *** * *** Rent uc wc v% 28.0% 27.4% 26.9% 28.2% 29.5% 48.7% 25.7% se 0.3% 0.6% 0.5% 1.7% 1.8% 4.3% 1.9% ix sig = *** = = *** = Other/Not Stated uc wc The Allen Consulting Group 129

143 Characteristics Total Population 18+ Total Gamblers (last 12 months) Gamble but not online Interactive Gamblers (online or phone) Gamblers (Wagering and Gaming) Gaming Wagerers v% 1.4% 1.4% 1.3% 1.6% 1.7% 0.3% 1.9% se 0.1% 0.1% 0.1% 0.5% 0.5% 0.5% 0.6% ix sig = = = = ** = Source: Roy Morgan Research Single Source Database The Allen Consulting Group 130

144 Table C.2 GAMBLING ATTITUDES Characteristics Total Population 18+ Total Gamblers (last 12 months) Gamble but not online Interactive Gamblers (online or phone) Gamblers (Wagering and Gaming) Gaming Wagerers Sample size uc 36,386 12,270 13,391 1,278 1, Population '000 wc 17,187 6,724 6, I play to win uc I generally go to the same place each time (Revised Oct10) My preferred form of gambling wc v% 8.0% 20.2% 17.1% 51.4% 50.6% 26.6% 57.2% se 0.2% 0.5% 0.5% 1.9% 2.0% 3.8% 2.1% ix sig *** *** *** *** *** *** uc wc v% 3.9% 9.9% 8.7% 21.4% 21.5% 14.3% 24.1% se 0.1% 0.4% 0.3% 1.5% 1.6% 3.0% 1.9% ix sig *** *** *** *** *** *** uc wc v% 4.5% 11.2% 8.8% 39.6% 38.4% 16.2% 44.4% se 0.2% 0.4% 0.3% 1.8% 1.9% 3.2% 2.2% ix sig *** *** *** *** *** *** I usually do it on the spur of uc The Allen Consulting Group 131

145 Characteristics Total Population 18+ Total Gamblers (last 12 months) Gamble but not online Interactive Gamblers (online or phone) Gamblers (Wagering and Gaming) Gaming Wagerers the moment wc I decide how much I am going to spend before I participate I normally travel more than 15 minutes to get to my usual place I don't gamble my winnings (Until Sep10) v% 2.8% 7.0% 6.2% 14.7% 15.7% 10.9% 17.6% se 0.1% 0.3% 0.3% 1.3% 1.4% 2.7% 1.6% ix sig *** *** *** *** *** *** uc wc v% 8.1% 20.5% 18.4% 42.8% 41.9% 22.1% 48.0% se 0.2% 0.5% 0.5% 1.8% 1.9% 3.6% 2.2% ix sig *** *** *** *** *** *** uc wc v% 1.0% 2.4% 2.3% 4.0% 4.2% 4.5% 4.3% se 0.1% 0.2% 0.2% 0.7% 0.8% 1.8% 0.9% ix sig *** *** *** *** ** *** uc wc v% 3.3% 8.3% 7.9% 13.6% 13.8% 6.4% 15.5% se 0.2% 0.5% 0.4% 2.0% 2.3% 4.1% 2.5% ix sig *** *** *** *** = *** The Allen Consulting Group 132

146 Characteristics Total Population 18+ Total Gamblers (last 12 months) Gamble but not online Interactive Gamblers (online or phone) Gamblers (Wagering and Gaming) Gaming Wagerers I use my winnings to play again (From Oct10) uc wc v% 2.9% 7.4% 4.6% 32.6% 34.2% 22.3% 39.2% se 0.2% 0.4% 0.4% 2.3% 2.4% 4.2% 2.8% ix sig = *** *** *** *** *** Win or lose, I still enjoy it uc wc v% 7.5% 19.1% 16.5% 45.3% 44.7% 22.8% 51.0% se 0.2% 0.5% 0.5% 1.8% 2.0% 3.6% 2.2% ix sig *** *** *** *** *** *** I love the excitement uc wc v% 4.4% 11.2% 9.2% 30.5% 30.9% 19.4% 34.9% se 0.2% 0.4% 0.4% 1.7% 1.8% 3.4% 2.1% ix sig *** *** *** *** *** *** I play to socialise uc wc v% 3.2% 8.4% 7.1% 16.8% 17.5% 15.2% 18.9% se 0.1% 0.4% 0.3% 1.4% 1.5% 3.1% 1.7% ix The Allen Consulting Group 133

147 Characteristics Total Population 18+ Total Gamblers (last 12 months) Gamble but not online Interactive Gamblers (online or phone) Gamblers (Wagering and Gaming) Gaming Wagerers I play to win a large jackpot and don t mind risking a bit of money to get it sig *** *** *** *** *** *** uc wc v% 1.1% 3.0% 2.3% 9.2% 8.8% 5.8% 10.0% se 0.1% 0.2% 0.2% 1.1% 1.1% 2.0% 1.3% ix sig *** *** *** *** ** *** Can't say uc TOTAL placed a bet in last 12 months Source: Roy Morgan Research Single Source Database wc v% 7.7% 19.4% 20.4% 13.0% 12.4% 10.1% 12.5% se 0.2% 0.5% 0.5% 1.2% 1.3% 2.6% 1.4% ix sig *** *** *** *** = *** uc wc v% 21.9% 55.0% 52.3% 90.7% 89.5% 48.9% 100.0% se 0.3% 0.6% 0.6% 1.1% 1.2% 4.3% n/a ix sig *** *** *** *** *** *** The Allen Consulting Group 134

148 Table C.3 LEISURE AND ENTERTAINMENT SPEND Characteristics Total Population 18+ Total Gamblers (last 12 months) Gamble but not online Interactive Gamblers (online or phone) Gamblers (Wagering and Gaming) Gaming Wagerers Base Total Leisure and Entertainment ($) uc wc mn cl +/ / / / / / / sig n/a n/a n/a n/a n/a n/a Gambling ($) uc wc mn cl +/ / / / / / / v% 11.7% 17.9% 17.9% 26.8% 26.4% 19.2% 27.7% se 0.6% 0.7% 1.3% 2.2% 2.4% 2.8% 2.7% ix sig *** *** *** *** *** *** Going out ($) uc wc mn cl +/ / / / / / / v% 52.4% 50.7% 50.1% 44.7% 45.3% 47.2% 44.5% se 0.6% 0.8% 1.0% 1.8% 1.9% 3.3% 2.1% ix sig ** *** *** *** = *** The Allen Consulting Group 135

149 Characteristics Total Population 18+ Total Gamblers (last 12 months) Gamble but not online Interactive Gamblers (online or phone) Gamblers (Wagering and Gaming) Gaming Wagerers Entertainment at home ($) uc wc mn cl +/ / / / / / / v% 35.9% 31.4% 32.0% 28.4% 28.3% 33.5% 27.8% se 0.6% 0.8% 0.9% 1.5% 1.6% 2.9% 1.7% ix sig *** *** *** *** = *** Percentage of total leisure and entertainment dollars spend on gambling TOTAL gave spent in the last 7 days* uc wc v% 81.6% 88.2% 88.3% 90.3% 89.9% 78.3% 93.1% se 0.3% 0.4% 0.4% 1.1% 1.2% 3.6% 1.1% ix sig *** *** *** *** = *** 0% uc wc v% 60.7% 44.0% 44.9% 32.7% 33.5% 37.8% 32.8% se 0.4% 0.7% 0.6% 1.8% 1.9% 4.6% 2.1% ix sig *** *** *** *** *** *** 1-9% uc wc The Allen Consulting Group 136

150 Characteristics Total Population 18+ Total Gamblers (last 12 months) Gamble but not online Interactive Gamblers (online or phone) Gamblers (Wagering and Gaming) Gaming Wagerers v% 8.4% 11.0% 11.0% 9.6% 10.2% 10.2% 9.9% se 0.2% 0.4% 0.4% 1.1% 1.3% 2.9% 1.3% ix sig *** *** = = = = 10-19% uc wc v% 7.5% 10.6% 10.5% 11.9% 12.3% 6.3% 13.4% se 0.2% 0.4% 0.4% 1.3% 1.4% 2.3% 1.5% ix sig *** *** *** *** = *** 20-29% uc wc v% 5.7% 9.0% 8.8% 11.3% 11.5% 9.2% 12.1% se 0.2% 0.4% 0.4% 1.2% 1.3% 2.7% 1.5% ix sig *** *** *** *** = *** 30-39% uc wc v% 3.4% 5.3% 5.0% 9.3% 9.1% 12.1% 8.2% se 0.1% 0.3% 0.3% 1.1% 1.2% 3.1% 1.2% ix sig *** *** *** *** *** *** 40-49% uc The Allen Consulting Group 137

151 Characteristics Total Population 18+ Total Gamblers (last 12 months) Gamble but not online Interactive Gamblers (online or phone) Gamblers (Wagering and Gaming) Gaming Wagerers wc v% 2.1% 3.3% 3.2% 5.2% 5.1% 5.9% 5.2% se 0.1% 0.2% 0.2% 0.9% 0.9% 2.2% 1.0% ix sig *** *** *** *** * *** 50-59% uc wc v% 2.1% 3.5% 3.3% 4.8% 4.8% 6.4% 4.4% se 0.1% 0.2% 0.2% 0.8% 0.9% 2.3% 0.9% ix sig *** *** *** *** * ** 60-69% uc wc v% 1.0% 1.6% 1.6% 2.1% 2.1% 3.5% 2.1% se 0.1% 0.2% 0.2% 0.6% 0.6% 1.8% 0.6% ix sig *** *** ** * = * 70-79% uc wc v% 0.7% 1.2% 1.2% 1.3% 1.0% 1.6% 0.8% se 0.1% 0.1% 0.1% 0.4% 0.4% 1.2% 0.4% ix sig *** *** = = = = The Allen Consulting Group 138

152 Characteristics Total Population 18+ Total Gamblers (last 12 months) Gamble but not online Interactive Gamblers (online or phone) Gamblers (Wagering and Gaming) Gaming Wagerers 80-89% uc wc v% 0.4% 0.8% 0.7% 1.7% 1.5% 0.2% 1.7% se 0.1% 0.1% 0.1% 0.5% 0.5% 0.4% 0.6% ix sig *** *** *** ** = ** 90-99% uc wc v% 0.2% 0.4% 0.3% 0.9% 1.0% 1.1% se 0.0% 0.1% 0.1% 0.4% 0.4% 0.5% ix sig *** * ** * ** 100% uc wc v% 7.8% 9.4% 9.5% 9.3% 7.9% 6.7% 8.4% se 0.2% 0.4% 0.4% 1.1% 1.1% 2.4% 1.2% ix sig *** *** = = = = Note: * Total gave spent in the last 7 days represent the number of people who gave a response on the amount spent on gambling in the last 7 days. The various percentages under Total gave spent in the last 7 days indicate that for those who provided a response, the percentage of an individual s total Leisure and Entertainment spent that was allocated to gambling. Source: Roy Morgan Research Single Source Database The Allen Consulting Group 139

153 Table C.4 TYPES OF GAMBLING Characteristics Total Population 18+ Total Gamblers (last 12 months) Gamble but not online Interactive Gamblers (online or phone) Gamblers (Wagering and Gaming) Gaming Wagerers Sample size uc Population ( 000) wc Types of gambling done in last 12 months Poker Machines at a Venue (Revised Jan10) Poker Machines (From Jan10) uc wc v% 27.0% 68.8% 69.9% 57.6% 57.0% 78.7% 53.0% se 0.3% 0.6% 0.6% 1.8% 2.0% 3.5% 2.2% ix sig *** *** *** *** *** *** uc wc v% 0.5% 1.2% 11.7% 13.1% 54.3% 2.5% se 0.1% 0.1% 1.2% 1.4% 4.3% 0.7% ix sig = = = = *** Total Poker Machines uc wc v% 27.0% 68.9% 69.9% 58.8% 58.2% 85.0% 53.5% se 0.3% 0.6% 0.6% 1.8% 1.9% 3.1% 2.2% ix sig *** *** *** *** *** *** The Allen Consulting Group 140

154 Characteristics Total Population 18+ Total Gamblers (last 12 months) Gamble but not online Interactive Gamblers (online or phone) Gamblers (Wagering and Gaming) Gaming Wagerers Keno uc Casino Table Games at a Venue (Revised Jan10) Casino Table Games (From Jan10) Total Poker Machines/Keno/Casino Table Games wc v% 9.4% 24.2% 23.5% 28.1% 28.1% 33.4% 27.3% se 0.2% 0.5% 0.5% 1.7% 1.8% 4.1% 1.9% ix sig *** *** *** *** *** *** uc wc v% 5.0% 12.9% 11.5% 22.6% 23.9% 37.3% 22.1% se 0.2% 0.4% 0.4% 1.6% 1.7% 4.2% 1.8% ix sig *** *** *** *** *** *** uc wc v% 0.6% 1.5% 13.7% 15.4% 63.7% 4.6% se 0.1% 0.2% 1.3% 1.5% 4.2% 0.9% ix sig = = = = *** uc wc v% 29.8% 76.3% 76.4% 70.3% 70.7% 100.0% 65.1% se 0.3% 0.5% 0.5% 1.7% 1.8% n/a 2.1% ix The Allen Consulting Group 141

155 Characteristics Total Population 18+ Total Gamblers (last 12 months) Gamble but not online Interactive Gamblers (online or phone) Gamblers (Wagering and Gaming) Gaming Wagerers sig *** *** *** *** *** *** Placed a Bet uc wc v% 21.9% 55.0% 52.3% 90.7% 89.5% 48.9% 100.0% se 0.3% 0.6% 0.6% 1.1% 1.2% 4.3% n/a ix sig *** *** *** *** *** *** Lottery Tickets uc wc v% 50.6% 71.0% 71.7% 69.4% 68.5% 58.9% 70.5% se 0.4% 0.6% 0.5% 1.7% 1.8% 4.3% 2.0% ix sig *** *** *** *** ** *** Scratch Tickets uc wc v% 23.9% 37.7% 37.7% 35.1% 34.9% 37.9% 33.9% se 0.3% 0.6% 0.6% 1.8% 1.9% 4.2% 2.0% ix sig *** *** *** *** *** *** Total Lottery/Scratch Tickets uc wc v% 55.8% 78.3% 79.2% 72.3% 71.4% 61.4% 73.4% se 0.4% 0.5% 0.5% 1.7% 1.8% 4.2% 1.9% The Allen Consulting Group 142

156 Characteristics Total Population 18+ Total Gamblers (last 12 months) Gamble but not online Interactive Gamblers (online or phone) Gamblers (Wagering and Gaming) Gaming Wagerers Total gambled in last 12 months Events bet on in last 12 months ix sig *** *** *** *** = *** uc wc v% 64.2% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% se 0.4% n/a n/a n/a n/a n/a n/a ix sig *** *** *** *** *** *** Horse Racing uc wc v% 20.5% 51.6% 49.3% 81.9% 80.5% 44.4% 89.7% se 0.3% 0.6% 0.6% 1.4% 1.6% 4.3% 1.3% ix sig *** *** *** *** *** *** Harness Racing (Trots) uc wc v% 2.80% 7.20% 5.40% 23.30% 23.50% 11.80% 26.90% se 0.10% 0.30% 0.30% 1.60% 1.70% 2.80% 1.90% ix sig *** *** *** *** *** *** Greyhound Racing uc wc The Allen Consulting Group 143

157 Characteristics Total Population 18+ Total Gamblers (last 12 months) Gamble but not online Interactive Gamblers (online or phone) Gamblers (Wagering and Gaming) Gaming Wagerers TOTAL Placed a bet on a Race v% 3.60% 9.10% 7.20% 26.80% 27.60% 19.90% 30.60% se 0.10% 0.40% 0.30% 1.60% 1.80% 3.50% 2.00% ix sig *** *** *** *** *** *** uc wc v% 21.3% 53.5% 51.1% 84.4% 83.2% 46.6% 92.6% se 0.3% 0.6% 0.6% 1.3% 1.5% 4.3% 1.1% ix sig *** *** *** *** *** *** AFL uc wc v% 1.8% 4.5% 2.5% 22.4% 23.4% 11.9% 27.3% se 0.1% 0.3% 0.2% 1.5% 1.7% 2.8% 1.9% ix sig *** *** *** *** *** *** Rugby League uc wc v% 1.6% 4.1% 2.5% 19.3% 20.4% 11.5% 23.2% se 0.1% 0.3% 0.2% 1.5% 1.6% 2.8% 1.8% ix sig *** *** *** *** *** *** Rugby Union uc The Allen Consulting Group 144

158 Characteristics Total Population 18+ Total Gamblers (last 12 months) Gamble but not online Interactive Gamblers (online or phone) Gamblers (Wagering and Gaming) Gaming Wagerers wc v% 0.4% 1.1% 0.4% 7.5% 8.3% 3.7% 9.6% se 0.0% 0.1% 0.1% 1.0% 1.1% 1.6% 1.3% ix sig *** = *** *** ** *** Soccer uc wc v% 0.9% 2.4% 1.0% 13.4% 15.0% 6.6% 17.5% se 0.1% 0.2% 0.1% 1.3% 1.4% 2.1% 1.6% ix sig *** = *** *** *** *** Tennis uc wc v% 0.5% 1.0% 0.5% 6.4% 7.0% 4.4% 8.2% se 0.0% 0.1% 0.1% 0.9% 1.0% 1.8% 1.2% ix sig *** = *** *** ** *** Cricket uc wc v% 0.5% 1.2% 0.6% 7.5% 7.9% 5.6% 9.1% se 0.1% 0.1% 0.1% 1.0% 1.1% 2.0% 1.2% ix sig *** = *** *** *** *** The Allen Consulting Group 145

159 Characteristics Total Population 18+ Total Gamblers (last 12 months) Gamble but not online Interactive Gamblers (online or phone) Gamblers (Wagering and Gaming) Gaming Wagerers Other Sports (From Oct10) uc wc v% 0.6% 1.6% 0.4% 11.6% 13.0% 5.7% 15.2% se 0.1% 0.2% 0.1% 1.5% 1.6% 2.3% 2.0% ix sig = * *** *** * *** Other Event (From Oct10) uc TOTAL Placed a bet on Sport (revised Oct10) TOTAL placed a bet in last 12 months wc v% 0.1% 0.4% 0.1% 2.5% 2.8% 1.1% 3.0% se 0.0% 0.1% 0.1% 0.7% 0.8% 1.0% 0.9% ix sig = = *** *** = *** uc wc v% 3.6% 8.9% 5.5% 41.7% 43.7% 20.4% 50.6% se 0.1% 0.4% 0.3% 1.8% 2.0% 3.5% 2.2% ix sig *** *** *** *** *** *** uc wc v% 21.9% 55.0% 52.3% 90.7% 89.5% 48.9% 100.0% se 0.3% 0.6% 0.6% 1.1% 1.2% 4.3% n/a ix The Allen Consulting Group 146

160 Characteristics Total Population 18+ Total Gamblers (last 12 months) Gamble but not online Interactive Gamblers (online or phone) Gamblers (Wagering and Gaming) Gaming Wagerers Used internet to place bet TOTAL Used Internet to place bet (From Jan10) NOT Used Internet to place bet (From Jan10) sig *** *** *** *** *** *** uc n/a wc n/a v% 3.3% 8.4% 79.3% 88.9% 21.4% n/a se 0.1% 0.4% 1.7% 1.6% 3.5% n/a ix n/a sig = = = *** n/a uc wc v% 17.4% 44.6% 48.4% 14.1% 5.9% 24.4% se 0.3% 0.6% 0.7% 1.3% 0.9% 3.7% ix sig = *** *** *** * Can't Say (From Jan10) uc Source: Roy Morgan Research Single Source Database wc v% 0.8% 2.1% 2.2% 1.1% 0.7% 3.0% se 0.1% 0.2% 0.2% 0.4% 0.3% 1.5% ix sig = *** = = = The Allen Consulting Group 147

161 Table C.5 FREQUENCY OF ANY BETS PLACED IN LAST 3 MONTHS Characteristics Total Population 18+ Total Gamblers (last 12 months) Gamble but not online Interactive Gamblers (online or phone) Gamblers (Wagering and Gaming) Gaming* Wagerers Sample size uc 4,916 3,850 4, Population ( 000) wc 2,393 2,214 1, Average no. of bets placed in the last 3 months (+/- 0.83) (+/- 0.97) 8.92 (+/- 0.73) (+/- 2.48) (+/- 2.72) (+/- 9.33) (+/- 2.81) 3 or more times a week uc wc v% 11.0% 12.1% 6.2% 29.7% 30.2% 29.9% 31.1% se 0.6% 0.7% 0.5% 1.9% 2.1% 6.6% 2.2% ix sig *** *** *** *** *** *** Approx. 2 times a week uc wc v% 7.6% 8.2% 6.4% 13.0% 12.4% 15.8% 12.1% se 0.5% 0.6% 0.5% 1.4% 1.5% 5.3% 1.5% ix sig ** *** *** *** = *** Approx. once a week uc wc v% 17.5% 17.7% 16.0% 24.1% 23.5% 14.8% 23.8% se 0.7% 0.9% 0.8% 1.8% 1.9% 5.1% 2.0% ix The Allen Consulting Group 148

162 Characteristics Total Population 18+ Total Gamblers (last 12 months) Gamble but not online Interactive Gamblers (online or phone) Gamblers (Wagering and Gaming) Gaming* Wagerers sig = *** *** *** = *** Approx. twice a month uc wc v% 3.3% 3.7% 3.2% 3.7% 3.9% 9.0% 3.8% se 0.4% 0.4% 0.4% 0.8% 0.9% 4.1% 0.9% ix sig ** = = = = = Approx. once a month uc wc v% 5.7% 5.4% 5.5% 6.4% 6.7% 4.3% 6.9% se 0.5% 0.5% 0.5% 1.0% 1.1% 2.9% 1.2% ix sig = = = = = = Less than once a month uc TOTAL Approx. once a month or less wc v% 49.5% 47.5% 56.6% 21.0% 21.0% 24.5% 20.1% se 1.0% 1.1% 1.1% 1.7% 1.9% 6.2% 1.9% ix sig *** *** *** *** *** *** uc wc v% 55.2% 52.9% 62.1% 27.3% 27.6% 28.8% 27.0% se 1.0% 1.1% 1.1% 1.9% 2.0% 6.6% 2.1% The Allen Consulting Group 149

163 Characteristics Total Population 18+ Total Gamblers (last 12 months) Gamble but not online Interactive Gamblers (online or phone) Gamblers (Wagering and Gaming) Gaming* Wagerers ix sig *** *** *** *** *** *** Can't say uc TOTAL placed a bet in last 3 months wc v% 5.4% 5.4% 6.2% 2.2% 2.4% 1.6% 2.3% se 0.4% 0.5% 0.5% 0.6% 0.7% 1.8% 0.7% ix sig = *** *** *** ** *** uc wc v% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% se n/a n/a n/a n/a n/a n/a n/a ix sig n/a n/a n/a n/a n/a n/a Note: * Results for online gaming target group should be interpreted with caution as the data analysis is based on a very small sample size Source: Roy Morgan Research Single Source Database The Allen Consulting Group 150

164 Table C.6 FREQUENCY OF RACING BETS PLACED IN LAST 3 MONTHS Characteristics Total Population 18+ Total Gamblers (last 12 months) Gamble but not online Interactive Gamblers (online or phone) Gamblers (Wagering and Gaming) Gaming* Wagerers Sample size uc 4,916 3,850 4, Population ( 000) wc 2,393 2,214 1, Average no. of bets placed in the last 3 months (+/- 0.71) (+/- 0.83) 8.07 (+/- 0.67) (+/- 2.09) (+/- 2.28) (+/- 8.18) (+/- 2.35) 3 or more times a week uc wc v% 7.9% 8.6% 4.9% 20.9% 21.1% 18.0% 21.8% se 0.5% 0.6% 0.5% 1.8% 1.9% 5.7% 2.0% ix sig *** *** *** *** * *** Approx. 2 times a week uc wc v% 6.6% 6.9% 5.6% 12.0% 10.5% 15.5% 10.3% se 0.5% 0.6% 0.5% 1.4% 1.4% 5.3% 1.5% ix sig = *** *** *** * *** Approx. once a week uc wc v% 16.5% 17.0% 14.4% 26.6% 25.6% 15.9% 26.0% se 0.7% 0.9% 0.8% 1.9% 2.0% 5.4% 2.1% ix The Allen Consulting Group 151

165 Characteristics Total Population 18+ Total Gamblers (last 12 months) Gamble but not online Interactive Gamblers (online or phone) Gamblers (Wagering and Gaming) Gaming* Wagerers sig = *** *** *** = *** Approx. twice a month uc wc v% 3.7% 4.1% 3.5% 4.3% 4.5% 5.7% 4.2% se 0.4% 0.5% 0.4% 0.9% 1.0% 3.4% 1.0% ix sig *** = = = = = Approx. once a month uc wc v% 3.8% 3.8% 3.9% 2.9% 2.9% 2.5% 2.9% se 0.4% 0.4% 0.4% 0.7% 0.8% 2.3% 0.8% ix sig = = = = = = Less than once a month uc TOTAL Approx. once a month or less wc v% 55.3% 53.2% 60.9% 29.2% 30.9% 39.1% 30.5% se 1.0% 1.1% 1.1% 2.0% 2.2% 7.2% 2.2% ix sig *** *** *** *** ** *** uc wc v% 59.0% 56.9% 64.8% 32.0% 33.8% 41.6% 33.4% se 1.0% 1.1% 1.1% 2.0% 2.2% 7.3% 2.3% The Allen Consulting Group 152

166 Characteristics Total Population 18+ Total Gamblers (last 12 months) Gamble but not online Interactive Gamblers (online or phone) Gamblers (Wagering and Gaming) Gaming* Wagerers ix sig *** *** *** *** ** *** Can't say uc TOTAL placed a bet in last 3 months wc v% 6.3% 6.5% 6.8% 4.1% 4.4% 3.3% 4.3% se 0.5% 0.6% 0.6% 0.9% 1.0% 2.6% 1.0% ix sig = ** *** ** = ** uc wc v% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% se n/a n/a n/a n/a n/a n/a n/a ix sig n/a n/a n/a n/a n/a n/a Note: * Results for online gaming target group should be interpreted with caution as the data analysis is based on a very small sample size. Source: Roy Morgan Research Single Source Database The Allen Consulting Group 153

167 Table C.7 FREQUENCY OF SPORTING BETS PLACED IN LAST 3 MONTHS Characteristics Total Population 18+ Total Gamblers (last 12 months) Gamble but not online Interactive Gamblers (online or phone) Gamblers (Wagering and Gaming) Gaming* Wagerers Sample size uc 4,916 3,850 4, Population ( 000) wc 2,393 2,214 1, Average no. of bets placed in the last 3 months (+/- 1.71) (+/- 1.97) 9.19 (+/- 1.82) 16.7 (+/- 2.69) (+/- 2.79) (+/- 7.05) (+/- 2.86) 3 or more times a week uc wc v% 12.7% 14.1% 4.1% 20.5% 21.8% 21.1% 21.8% se 1.8% 2.1% 1.5% 3.0% 3.1% 9.5% 3.2% ix sig ** *** *** *** = *** Approx. 2 times a week uc wc v% 10.4% 10.6% 8.0% 12.9% 13.0% 20.2% 12.7% se 1.6% 1.8% 2.1% 2.5% 2.5% 9.3% 2.5% ix sig = = * = = = Approx. once a week uc wc v% 21.2% 22.0% 24.8% 16.3% 17.4% 21.3% 17.5% se 2.2% 2.5% 3.3% 2.7% 2.8% 9.5% 2.9% ix The Allen Consulting Group 154

168 Characteristics Total Population 18+ Total Gamblers (last 12 months) Gamble but not online Interactive Gamblers (online or phone) Gamblers (Wagering and Gaming) Gaming* Wagerers sig = * ** * = = Approx. twice a month uc wc v% 8.9% 11.1% 8.3% 8.7% 9.5% 9.8% 9.0% se 1.5% 1.9% 2.1% 2.1% 2.2% 6.9% 2.2% ix sig *** = = = = = Approx. once a month uc wc v% 4.5% 4.3% 1.8% 7.1% 7.4% 15.1% 7.6% se 1.1% 1.2% 1.0% 1.9% 2.0% 8.3% 2.0% ix sig = ** ** ** = *** Less than once a month uc TOTAL Approx. once a month or less wc v% 34.4% 29.6% 42.6% 29.4% 25.7% 10.8% 26.1% se 2.5% 2.7% 3.8% 3.4% 3.3% 7.2% 3.4% ix sig *** *** ** *** *** *** uc wc v% 38.9% 33.9% 44.3% 36.5% 33.1% 25.9% 33.7% se 2.6% 2.8% 3.8% 3.5% 3.5% 10.2% 3.6% The Allen Consulting Group 155

169 Characteristics Total Population 18+ Total Gamblers (last 12 months) Gamble but not online Interactive Gamblers (online or phone) Gamblers (Wagering and Gaming) Gaming* Wagerers ix sig *** ** = ** = * Can't say uc TOTAL placed a bet in last 3 months wc v% 8.0% 8.3% 10.4% 4.9% 5.3% 1.7% 5.3% se 1.4% 1.6% 2.3% 1.6% 1.7% 3.0% 1.7% ix sig = * ** * ** * uc wc v% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% se n/a n/a n/a n/a n/a n/a n/a ix sig n/a n/a n/a n/a n/a n/a Note: * Results for online gaming target group should be interpreted with caution as the data analysis is based on a very small sample size. Source: Roy Morgan Research Single Source Database The Allen Consulting Group 156

170 Table C.8 AVERAGE SPEND ON ANY BETS PLACED IN LAST 3 MONTHS Characteristics Total Population 18+ Total Gamblers (last 12 months) Gamble but not online Interactive Gamblers (online or phone) Gamblers (Wagering and Gaming) Gaming* Wagerers Sample size uc 4,916 3,850 4, Population ( 000) wc 2,393 2,214 1, Average spend on bets placed in the last 3 months (+/ ) (+/ ) (+/ ) (+/ ) (+/ ) 1, (+/ ) (+/ ) $500 or more uc wc v% 0.3% 0.3% 0.2% 0.7% 0.6% 0.6% se 0.1% 0.1% 0.1% 0.3% 0.4% 0.4% ix sig = = = = = $200 - $ uc wc v% 0.8% 0.7% 0.5% 1.5% 1.8% 5.6% 1.8% se 0.2% 0.2% 0.2% 0.5% 0.6% 3.3% 0.6% ix sig = * * * = * $100 - $ uc wc v% 2.7% 2.7% 2.1% 5.1% 5.0% 6.7% 4.9% se 0.3% 0.4% 0.3% 0.9% 1.0% 3.6% 1.0% ix The Allen Consulting Group 157

171 Characteristics Total Population 18+ Total Gamblers (last 12 months) Gamble but not online Interactive Gamblers (online or phone) Gamblers (Wagering and Gaming) Gaming* Wagerers sig = *** *** *** = *** $50 - $99.99 uc wc v% 7.9% 8.4% 7.1% 11.5% 11.5% 10.5% 11.5% se 0.5% 0.6% 0.6% 1.4% 1.5% 4.4% 1.5% ix sig * *** *** *** = *** $20 - $49.99 uc wc v% 20.4% 20.5% 19.6% 23.1% 23.4% 23.8% 23.5% se 0.8% 0.9% 0.9% 1.8% 1.9% 6.2% 2.0% ix sig = * * * = * $5 - $19.99 uc wc v% 45.5% 45.4% 47.0% 40.7% 39.4% 40.8% 39.4% se 1.0% 1.1% 1.1% 2.1% 2.2% 7.1% 2.3% ix sig = *** *** *** = *** Can't say uc wc v% 15.8% 15.2% 16.2% 13.8% 14.2% 8.6% 14.1% se 0.7% 0.8% 0.8% 1.5% 1.6% 4.1% 1.6% The Allen Consulting Group 158

172 Characteristics Total Population 18+ Total Gamblers (last 12 months) Gamble but not online Interactive Gamblers (online or phone) Gamblers (Wagering and Gaming) Gaming* Wagerers ix sig = = = = * = TOTAL placed a bet in last 3 months uc wc v% 6.6% 6.7% 7.3% 3.7% 4.1% 3.9% 4.1% se 0.5% 0.6% 0.6% 0.8% 0.9% 2.8% 0.9% ix sig = *** *** *** = *** Note: * Results for online gaming target group should be interpreted with caution as the data analysis is based on a very small sample size. Source: Roy Morgan Research Single Source Database The Allen Consulting Group 159

173 Table C.9 AVERAGE SPEND ON RACING BETS PLACED IN LAST 3 MONTHS Characteristics Total Population 18+ Total Gamblers (last 12 months) Gamble but not online Interactive Gamblers (online or phone) Gamblers (Wagering and Gaming) Gaming* Wagerers Sample size uc 4,916 3,850 4, Population ( 000) wc 2,393 2,214 1, Average spend on bets placed in the last 3 months (+/ ) (+/ ) (+/ ) (+/ ) (+/ ) 1, (+/- 1,015.45) (+/ ) $500 or more uc wc v% 0.4% 0.4% 0.2% 1.1% 1.1% 1.9% 1.2% se 0.1% 0.2% 0.1% 0.5% 0.5% 2.0% 0.5% ix sig = * ** * = * $200 - $ uc wc v% 0.7% 0.6% 0.6% 1.0% 1.1% 2.4% 1.1% se 0.2% 0.2% 0.2% 0.4% 0.5% 2.3% 0.5% ix sig = = = = = = $100 - $ uc wc v% 2.8% 2.9% 2.2% 5.6% 5.6% 7.8% 5.5% se 0.3% 0.4% 0.3% 1.0% 1.1% 3.9% 1.1% ix The Allen Consulting Group 160

174 Characteristics Total Population 18+ Total Gamblers (last 12 months) Gamble but not online Interactive Gamblers (online or phone) Gamblers (Wagering and Gaming) Gaming* Wagerers sig = *** *** *** = *** $50 - $99.99 uc wc v% 7.9% 8.2% 7.4% 10.4% 10.0% 16.1% 9.8% se 0.5% 0.6% 0.6% 1.3% 1.4% 5.4% 1.4% ix sig = * ** * = = $20 - $49.99 uc wc v% 20.1% 20.6% 19.4% 22.9% 23.5% 22.5% 23.5% se 0.8% 0.9% 0.9% 1.8% 2.0% 6.1% 2.0% ix sig = * * * = * $5 - $19.99 uc wc v% 45.4% 45.4% 46.5% 42.1% 40.7% 36.3% 41.0% se 1.0% 1.1% 1.1% 2.2% 2.3% 7.1% 2.4% ix sig = ** * ** = ** Can't say uc wc v% 16.1% 15.2% 16.7% 13.0% 13.7% 9.0% 13.6% se 0.7% 0.8% 0.8% 1.5% 1.6% 4.2% 1.7% The Allen Consulting Group 161

175 Characteristics Total Population 18+ Total Gamblers (last 12 months) Gamble but not online Interactive Gamblers (online or phone) Gamblers (Wagering and Gaming) Gaming* Wagerers ix sig ** = ** = * = TOTAL placed a bet in last 3 months uc wc v% 6.6% 6.6% 7.1% 3.8% 4.3% 4.1% 4.3% se 0.5% 0.6% 0.6% 0.8% 0.9% 2.9% 1.0% ix sig = *** *** *** = ** Note: * Results for online gaming target group should be interpreted with caution as the data analysis is based on a very small sample size. Source: Roy Morgan Research Single Source Database The Allen Consulting Group 162

176 Table C.10 AVERAGE SPEND ON SPORTING BETS PLACED IN LAST 3 MONTHS Characteristics Total Population 18+ Total Gamblers (last 12 months) Gamble but not online Interactive Gamblers (online or phone) Gamblers (Wagering and Gaming) Gaming* Wagerers Sample size uc 4,916 3,850 4, Population ( 000) wc 2,393 2,214 1, Average spend on bets placed in the last 3 months (+/ ) (+/ ) (+/ ) (+/ ) (+/ ) 1, (+/- 1,623.89) (+/ ) $500 or more uc wc v% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% se 0.2% 0.1% 0.2% 0.2% 0.2% 0.2% ix sig = = = = = $200 - $ uc wc v% 0.8% 0.8% 0.3% 1.2% 1.2% 7.3% 1.3% se 0.5% 0.5% 0.4% 0.8% 0.8% 6.0% 0.9% ix sig = = = = = = $100 - $ uc wc v% 2.0% 2.2% 0.4% 3.4% 3.7% 3.8% se 0.7% 0.9% 0.5% 1.3% 1.4% 1.5% ix The Allen Consulting Group 163

177 Characteristics Total Population 18+ Total Gamblers (last 12 months) Gamble but not online Interactive Gamblers (online or phone) Gamblers (Wagering and Gaming) Gaming* Wagerers sig = ** ** ** ** $50 - $99.99 uc wc v% 7.3% 7.7% 5.0% 9.6% 9.8% 1.5% 9.9% se 1.4% 1.6% 1.7% 2.2% 2.2% 2.8% 2.3% ix sig = * * * * * $20 - $49.99 uc wc v% 16.9% 16.6% 14.7% 19.1% 19.3% 21.1% 19.6% se 2.0% 2.2% 2.7% 2.9% 3.0% 9.5% 3.0% ix sig = = = = = = $5 - $19.99 uc wc v% 50.4% 49.9% 54.9% 46.0% 45.6% 63.4% 44.6% se 2.7% 3.0% 3.8% 3.7% 3.7% 11.2% 3.8% ix sig = * * * = ** Can't say uc wc v% 13.4% 13.3% 12.2% 15.5% 14.7% 1.8% 15.1% se 1.8% 2.0% 2.5% 2.7% 2.7% 3.1% 2.7% The Allen Consulting Group 164

178 Characteristics Total Population 18+ Total Gamblers (last 12 months) Gamble but not online Interactive Gamblers (online or phone) Gamblers (Wagering and Gaming) Gaming* Wagerers ix sig = = = = *** = TOTAL placed a bet in last 3 months uc wc v% 8.8% 9.2% 11.9% 5.1% 5.5% 4.9% 5.7% se 1.5% 1.7% 2.5% 1.6% 1.7% 5.0% 1.8% ix sig = ** ** ** = ** Note: * Results for online gaming target group should be interpreted with caution as the data analysis is based on a very small sample size. Source: Roy Morgan Research Single Source Database The Allen Consulting Group 165

179 References AC Nielson. 2007, Prevalence of gambling and problem gambling in New South Wales, Sydney: NSW Office of Liquor, Gaming and Racing. Bargh, J. A. & Mckenna, K. Y. A. 2004, The Internet and Social Life, Annual Review of Psychology, 55, Benhsain, K., Taillefer, A., & Ladouceur, R. 2004, Awareness of independence of events and erroneous perceptions while gambling, Addictive Behaviors, 29, Braverman, J., LaBrie, R. A., & Shaffer, H. J. 2011, A Taxometric Analysis of Actual Internet Sports Gambling Behavior, Psychological Assessment March, 23(1), Broda, A., LaPlante, D.A., Nelson, S. E., LaBrie, R.A., Bosworth, L.B. & Shaffer, H.J. 2008, Virtual harm reduction efforts for Internet gambling: effects of deposit limits on actual Internet sports gambling behaviour, Harm Reduction Journal, 5, 27. Cloutier, M., Ladouceur, R., & Sevigny, S. 2006, Responsible gambling tools: Popup messages and pauses on video lottery terminals, The Journal of Psychology, 140, 5, Consumer Contact 2003, Testing of harm minimization messages for gambling machines, Report for the Department of Gaming and Racing, Sydney: Author. Davidson, T., & Rodgers, B. 2010, 2009 Survey of The Nature and Extent of Gambling, and Problem Gambling, in the Australian Capital Territory, Adelaide: Australian National University & Australian Capital Territory Gambling and Racing Commission. Department for Culture, Media & Sport 2003, The future regulation of remote gambling: A DCMS position paper, London: Author Department of Communications, Broadband and the Digital Economy (DBCDE) 2011, Review of the Interactive Gambling Act 2001: Call for submissions. Department of Families, Housing, Community Services and Indigenous Affairs (FaHSCIA) 2009, Review on Current and Future Trends in Interactive Gambling Activity and Regulation. Desai, R.A., Desai, M.M., & Potenza, M.N. 2007, Gambling, health and age: Data from the National Epidemiologic Survey on Alcohol and Related Conditions, Psychology of Addictive Behaviors, 21, Dimaggio, P., Hargittai, E., Neuman, W. R. & Robinson', J. P. 2001, Social Implications of the Internet, Annual Review of Sociology, 27, The Allen Consulting Group 166

180 Dowling, N. A., & Brown, M. 2010, Commonalities in the psychological factors associated with problem gambling and internet dependence, Cyberpsychology, Behavior, and Social Networking. (Available: e-commerce and Gambling Regulation and Assurance 2007, An exploratory investigation into the attitudes and behaviours of internet casino and poker players. (Retrieved 25th November, 2011 from European Professional Football League (EPFL) 2011, Green Paper Submission, 29th July 201. European Union Elite Athletes Association 2011, Green Paper Submission. Gainsbury and Blaszczynski 2011, Submission to the Joint Select Committee on Gambling Reform: Inquiry into the prevalence of interactive and online gambling in Australia and gambling advertising, accessed 10 th November 2011 ( Gainsbury, S. & Wood, R. 2011, Internet gambling policy in critical comparative perspective: the effectiveness of existing regulatory frameworks, International Gambling Studies, 11,3, Gambling Compliance/ Gambling Data 2011, In-Play Betting Report, September European Commission (EC) 2011, Green Paper on online gambling in the Internal Market. Gambling Commission (GC) 2008, Survey data on remote gambling participation, Birmingham: Gambling Commission. Gambling Policy Directorate and Office of the Government Statistician 2008, Queensland gambling household survey, , Brisbane: Queensland Treasury. Global Betting & Gaming Consultants (GBGC) 2011, E-gaming to Pass US$30bn GGY in 2011, dated 8 February 2011, accessed on 10 th November 2011 ( Goh, L. Y. Q., Phillips, J. G., & Blaszczynski, A. 2011, Computer-mediated communication and risk-taking behaviour, Computers in Human Behavior, 27(5), doi: /j.chb Griffiths M.D., & Barnes, A. 2008, Internet gambling: An online empirical study among gamblers, International Journal of Mental Health Addiction, 6, Griffiths, M., Wardle, H., Orford, J., Sproston, K., & Erens, B. 2011, Internet Gambling, Health, Smoking and Alcohol Use: Findings from the 2007 British Gambling Prevalence Survey, International Journal of Mental Health and Addiction, 9(1), Griffiths, M.D, Wood,R.J. & Parke, J. (2009). Social responsibility tools in online gambling: A survey of attitudes and behavior among internet gamblers." CyberPsychology & Behavior, 12, 4, Griffiths, M.D. & Parke, J. 2002, The social impact of internet gambling, Social Science Computer Review, 20, The Allen Consulting Group 167

181 Griffiths, M.D. & Parke, J. 2007, Betting on the couch: A thematic analysis of Internet gambling using case studies, Social Psychological Review, 9(2), Griffiths, M.D. & Wood, R.T.A. 2007, Adolescent Internet gambling: Preliminary results of a national survey, Education and Health, 25, Griffiths, M.D. 1999, Gambling technologies: Prospects for problem gambling, Journal of Gambling Studies, 15, Griffiths, M.D. 2001, Internet gambling: Preliminary results of the first UK prevalence study, Journal of Gambling Issues, 5. (Available: (Last accessed June )). Griffiths, M.D. 2003, Internet gambling: Issues, concerns and recommendations, CyberPsychology and Behavior, 6, Griffiths, M.D., Parke, A., Wood, R.T.A. & Parke, J. 2006, Internet gambling: An overview of psychosocial impacts, Gaming Research and Review Journal, 27(1), Griffiths, M.D., Parke, J., Wood, R.T.A. & Rigbye, J. 2010, poker gambling in university students: Further findings from an online survey, International Journal of Mental Health and Addiction, 8, Griffiths, M.D., Wardle, J., Orford, J., Sproston, K. & Erens, B. 2009, Sociodemographic correlates of internet gambling: findings from the 2007 British Gambling Prevalence Survey, CyberPsychology and Behavior, 12, Griffiths, M.D., Wood, R.T.A. & Parke, J. 2009, Social responsibility tools in online gambling: A survey of attitudes and behaviour among Internet gamblers, CyberPsychology and Behavior, 12, Haefeli, J., Lischer, S. & Schwarz, J. 2011, Early detection items and responsible gambling features for online gambling, International Gambling Studies, 11, 3, Hopley, A. A. B., & Nicki, R. M. 2010, Predictive Factors of Excessive Poker Playing, CyberPsychology, Behavior & Social Networking, 13(4), doi: /cyber Hopley, A., Dempsey, K., & Nicki, R. 2011, Texas Hold em Poker: A Further Examination, International Journal of Mental Health and Addiction, doi: /s Ialomiteanu, A. & Adlaf, E. 2001, Internet gambling among Ontario adults, Electronic Journal of Gambling Issues, 5. (Available: International Gaming Research Unit 2007, The global online gambling report: An exploratory investigation into the attitudes and behaviours of internet casino and poker players, Report for ecogra (e-commerce and Gaming Regulation and Assurance). Ipsos MORI 2009, British Survey of Children, the National Lottery and Gambling : Report of a quantitative survey, London: National Lottery Commission. The Allen Consulting Group 168

182 Jiménez-Murcia, S., Stinchfield, R., Fernández-Aranda, F., Santamaría, J. J., Penelo, E., Granero, R., et al. 2011, Are online pathological gamblers different from non-online pathological gamblers on demographics, gambling problem severity, psychopathology and personality characteristics?, International Gambling Studies, 11(3), doi: / LaBrie, R.A., Kaplan, S., LaPlante, D.A., Nelson, S.E., & Shaffer, H.J. 2008, Inside the virtual casino: A prospective longitudinal study of Internet casino gambling. European Journal of Public Health, doi: /eurpub/ckn021 LaBrie, R., & Shaffer, H. J. 2011, Identifying behavioural markers of disordered Internet sports gambling, Addiction Research & Theory, 19(1), doi: / LaBrie, R.A., LaPlante, D.A., Nelson, S.E., Schumann, A. & Shaffer, H.J. 2007, Assessing the Playing Field: A Prospective Longitudinal Study of Internet Sports Gambling Behavior, Journal of Gambling Studies, 23, Ladd, G. T., & Petry, N. M. 2002, Disordered gambling among university-based medical and dental patients: A focus on Internet gambling, Psychology of Addictive Behaviors, 16(1), doi: // x LaRose, R., Mastro, D., and Eastin, M.S. 2001, Understanding Internet usage: A social cognitive approach to uses and gratifications, Social Science Computer Review, 19(4), Lesieur, H. R. 1984, The Chase: Career of the Compulsive Gambling (2nd ed.), Rochester, VT: Schenkman Books, Inc. Lloyd, J., Doll, H., Hawton, K., Dutton, W. H., Geddes, J. R., Goodwin, G. M., et al. 2010, Internet Gamblers: A Latent Class Analysis of Their Behaviours and Health Experiences, Journal of Gambling Studies, 26(3), Lorains, FK, Cowlishaw, S, Thomas, S. 2011, Prevalence of co-morbid disorders in problem and pathological gambling, Addiction, 106, Matthews, N., Farnsworth, W.F. & Griffiths, M.D. 2009, A pilot study of problem gambling among student online gamblers: Mood states as predictors of problematic behaviour, CyberPsychology and Behavior, 12, McBride, J., & Derevensky, J. 2009, Internet gambling behavior in a sample of online gamblers, International Journal of Mental Health and Addiction, 7, McCormack, A., & Griffiths, M. 2010, Motivating and Inhibiting Factors in Gambling Behaviour: A Grounded Theory Study, International Journal of Mental Health and Addiction, first: doi: /s Monaghan, SM 2009, Responsible gambling strategies for Internet gambling: the theoretical and empirical base of using pop-up messages to encourage selfawareness, Computers in Human Behavior, 25, 1, Office of Economic and Statistical Research (OESR) 2011, Australian Gambling Statistics: 27 th Edition, Queensland Treasury. Parke, J., Rigbye, J. & Parke, A. 2008, Cashless and card-based technologies in gambling: A review of the literature, Birmingham: The Gambling Commission Parliamentary Joint Select Committee on Gambling Reform 2011, Interactive and online gambling and gambling advertising, Second Report. The Allen Consulting Group 169

183 Productivity Commission (PC) 2010, Inquiry Report on Gambling. Remote Gambling Association 2011, gambling: Key objectives for a successful regulatory and tax framework, London: Author Schellink, T. & Schrans, T. 2002, Atlantic Lottery Corporation Video Lottery Responsible Gaming Feature Research: Final Report, Halifax, Nova Scotia, Focal Research Consultants. School for Social and Policy Research 2006, Northern Territory gambling prevalence survey 2005, Darwin: Charles Darwin University. Schrans, T., Grace, J., & Schellinck, T. 2004, 2003 NS VL responsible gaming features Evaluation: Final report, Halifax, NS: Nova Scotia Gaming Corporation. Retrieved August 12, (Available: VL-RGF-Nov pdf) Senate Select Committee on Information Technologies 2000, Netbets: A review of online gambling in Australia, Canberra: Commonwealth of Australia. Smeaton, M. & Griffiths, M.D. 2004, Internet gambling and social responsibility: An exploratory study, CyberPsychology and Behavior, 7, South Australian Centre for Economic Studies 2008, Social and economic impact study into gambling in Tasmania, Adelaide: Department of Treasury and Finance. South Australian Department for Families and Communities 2006, Gambling prevalence in South Australia: October to December 2005, Adelaide. Steenbergh, T. A., Whelan,J.P., Meyers,A.W., May, R.K., & Floyd, K. 2004, Impact of Warning and Brief Intervention Messages on Knowledge of Gambling Risk, Irrational Beliefs and Behaviour, International Gambling Studies, 4, United States General Accounting Office (GAO) 2002, Internet Gambling: An Overview of the Issues, Report to Congressional Requesters, December Victorian Department of Justice 2009, A Study of Gambling in Victoria Problem Gambling from a Public Health Perspective, Department of Justice, Victoria. Volberg RA, Nysse-Carris KL, Gerstein DR 2006, California Problem Gambling Prevalence Survey, Los Angeles: California Department of Alcohol and Drug Programs Office of Problem and Pathological Gambling, Wan F. and Youn S. 2004, Motivations to Regulate Gambling and Violent Game Sites: An Account of the Third-Person Effect, Journal of Interactive Advertising, Vol 5 No 1 Fall Wardle, H., Moodie, A., Spence, S., Orford, J., Volberg, R., Jotangia, D., et al. 2011, British Gambling Prevalence Survey 2010, London: The Gambling Commission. Watson, S., Liddell, P., Moore, R. S., & Eshee, W. D. 2004, The legalization of internet gambling: A consumer protection perspective, Journal of Public Policy and Marketing, 23(2), Wood, R. T., Williams, R. J., & Lawton, P. K. 2007, Why do internet gamblers prefer online versus land-based venues? Some preliminary findings and implications, Journal of Gambling Issues, 20. (Available: The Allen Consulting Group 170

184 Wood, R.T. & Williams, R.J. 2009, Internet Gambling: Prevalence, Patterns, Problems, and Policy Options, Final Report prepared for the Ontario Problem Gambling Research Centre, Guelph, Ontario, CANADA. January 5, Wood, R.T.A. & Griffiths. M.D. 2008, Why Swedish people play online poker and factors that can increase or decrease trust in poker websites: A qualitative investigation, Journal of Gambling Issues, 21, Wood, R.T.A., & Williams, R.J. 2007, Problem gambling on the internet: implications for internet gambling policy in North America, New Media & Society, 9, Wood, R.T.A., Griffiths, M.D. & Parke, J. 2007, The acquisition, development, and maintenance of online poker playing in a student sample, CyberPsychology and Behavior, 10, Xuan, Z., & Shaffer, H. 2009, How Do Gamblers End Gambling: Longitudinal Analysis of Internet Gambling Behaviors Prior to Account Closure Due to Gambling Related Problems, Journal of Gambling Studies, 25(2), doi: /s z. The Allen Consulting Group 171

185 The Allen Consulting Group 172