Gambling Operators Dodge Ad Ban in Australia

  • New South Wales bans gambling advertising and imposes a 10% tax on online gambling
  • Many operators prefer to continue running ads and dealing with the consequences
  • The size of the fines pale in comparison to the revenues their ads generate
  • There are calls for repeating offenders to be stripped of their licenses
Panoramic view of Sydney Harbour
Online gambling operators in New South Wales are dodging the gambling ad ban.

New South Wales cracking down

The province of New South Wales in Australia bans gambling advertising. Under the New South Wales Betting and Racing Act, it is an offense to issue “a gambling advertisement that offers any inducement to participate, or participate frequently, in any gambling activity (including an inducement to open a betting account).”

This move came amid rising levels of gambling addiction in the province and in the country as a whole. As a nation, Australians lose more money gambling than any other country by a considerable margin.

The New South Wales regulator has also been increasing its fines to disincentivize gambling operators from ignoring their ad restrictions. They are also trying to impose limits on the amount of money certain people are allowed to gamble.

A new online betting tax has been introduced. This is a point-of-consumption tax that came into effect on January 1. Its goal is to make sure that operators with licenses in other Australian provinces share the revenue they make from bettors in New South Wales with the respective provincial government. Most provinces now have this tax.

It is a 15% tax in South Australia, Western Australia, and Queensland. Victoria has an 8% rate while New South Wales went with 10%. Many global online operators have licenses in the Northern Territory due to its favorable tax laws and flat rate licensing. This new tax will help ensure that revenue is being fairly shared out among the respective provinces.

In the first full year of this tax, New South Wales is hoping to bring in additional revenue of US$74m (£57m).

Operators dodging this ban

While the province is doing its best to clamp down on problem gambling through this ad ban, the operators are finding ways around it. Under provincial law, online gambling platforms are not legally able to entice new people to sign up. The only online platforms that can advertise free bets are those solely focusing on racing.

Online gambling operators are now utilizing different websites in order to drum up new business for their platforms. This has led to the authorities coming down even tougher on the sector. On average, two cases a month are prosecuted.

Tabcorp, Sportsbet, Ladbrokes, and Bet365 have all been fined recently. In total, operators have paid approximately US$92,000 (£71,000) in fines.

The scope of these fines is nothing to the companies, which see the trade-off of breaking the ad ban as being advantageous in their favor. The increase in revenues from running these illegal ads and other shady advertising practices are significantly more than the fines they receive.

Many are therefore calling for the introduction of harsher punishments. Some want the licenses of these operators revoked if they are continually bypassing these rules. Without a strong disincentive for these companies, they will continue ignoring the provincial laws.

There is talk of increasing the current level of fines by ten times. This would see each incident resulting in a fine in the region of US$38,000 (£29,400).

Nationwide crackdown

There has been a crackdown right across Australia to reduce the levels of problem gambling. A sports betting integrity unit was created to monitor suspicious betting activity and to identify those with potential gambling issues.

There is also a potential block on the use of credit cards for making deposits to online gambling platforms. This will help problem gamblers stop falling into severe debt by using credit to fund their gambling.

The authorities are targeting offshore companies that illegally solicit Australian residents and also lowering the maximum stake on video poker machines and video lottery terminals. Finally, many provinces are introducing similar curtailments on gambling advertising as seen in New South Wales.