Online Gambling in Australia - Essay Example

?Online Gambling Table of Contents Introduction 3 Online Gambling in Australia: The roots of the same 4 Australia: The Market Leader 5 Certain Facts and figures of Online Gambling: A Major Business on Internet 5 Impact of Online Gambling 10 Legal Challenges in Australia 14 Conclusion 14 Reference 16 Bibliography 19 Introduction The public and legal gambling history of Australia began in the early period of nineteenth century. The history started off with gambling on horse racing. In the year 1810, the first publicly organised race meeting was held in New South Wales. In the year 1861, the Melbourne cup, a globally recognised race, was first introduced in Victoria. In the early twentieth century, lotteries were introduced. In the year 1920, the Golden casket lottery was established by the Queensland Government. The very first regulated online casino started off in the year 1999. Since the 1990s, the expansion of gambling has experienced a considerable growth; this has been true for Australia and several other countries (Fabiansson, 2010). At this time, the electronic gaming machines had been introduced in the hotels and casinos across Australia. In the year 1956, these were introduced in the Australian clubs. At the first stage, gaming machines were not originally introduced in the hotels as these do not have the same community focus or the same types of community engagements as the Australian clubs. For the clubs the gambling was the most significant activity to earn revenue while in hotels and casinos the trend was to serve beer and other alcohol. In this new era, the gaming machines have developed a lot to introduce a highly sophisticated computer programmed machines. The modern and technically enhanced gaming machines can be programmed to offer small wins to maintain the excitement. This also helps the participants to be hopeful of large wins. Presently, Australia seems to be one of the most attractive online gambling location in entire Oceania as the country got several licensed internet gambling sites (Diaconu, 2010). Gambling machines have grown in the popularity both among the gamblers and the suppliers. Australians have defining characteristics of club culture. It has been noticed that revenue from the gaming machines is quite higher than for casino gambling and wagering. In Australia, gaming machine gambling turnover is a major one across all the gambling forms; the turnover is around $ 107,924 million. The essay aims to provide an insight into the internet gambling in Australia with a discussion of its advantages and disadvantages. This essay starts with an introduction to the Australian online gambling industry. A conclusion has been inferred from the analysis part. Online Gambling in Australia: The roots of the same Ever since the first European settlers had arrived on shore, gambling has become an inherent part of Australian culture. British influence has given considerable contribution to give gambling a firm ground for its establishment and enlargement. Quickly it became significantly popular form of entertainment in Australia. In the 1980’s, in Australia, gambling was present in a number of organised forms. So, it was quite natural that Australia would emerge as one of those first countries who would get their hands on these newly introduced technologies, allowing them to get indulge into internet gambling. On 8th April, 1999, Australia became the first country across the globe to legalize the online gambling. “Not only was Australia the first country to legalize online gambling under a fully regulated jurisdiction, but Lasseters Online is also the world's first internet casino to be operated by a land-based casino, situated in the Northern Territory” (Online Casino Archives, 2008). Lasseters had its belief in the online gaming industry. From day one, the company realised the prospectus of the international gambling. Even before other Australian states, it has opened its doors to the international customers. The Australian government swiftly appreciated the potential market success of the internet gambling. In the year 1999, a BBC news report had revealed that after Lasseters launch its business, it became to determine the cyber-casino capitol of the world. Australia: The Market Leader Sports-betting and horse-racing have been the oldest gambling forms which have been practiced by the Australian society. Undoubtedly, Lasseters offered an online platform and presented it as favourite past-time for the Aussies. As the business has experienced enough growth and success in the market, other companies also began to follow the queue. Totalisator Agency Boards (TAB) introduced Australian sports betting through SKY satellite. In a short span of time, the remaining Australian states have begun legalising different forms of online gambling. In the process, the country has become a market leading competitor which has set the standards for the gambling sites and governing jurisdictions. Some other gambling favourites include slot machines which are termed as the ‘pokies’ by the Aussies, scratch tickets, lotteries and keno. All these forms took more time to extend their arena to the internet. Today, these forms are considered as the integral parts of online casinos in Australia. As of now, the land based gambling industry has experienced a considerable growth and is more established and able legally. Australians still provide one of the most stable online gambling markets across the globe. The country has been the home to some of the best online games telecasting (Australian Casinos Online, n.d.). Certain Facts and figures of Online Gambling: A Major Business on Internet In Australia, internet wagering and sports betting is made legal in Australia. However, there are certain games like internet casino games, online poker and gaming machines are yet to be legalised. The online gambling has become increasingly popular across the world, particularly among the young adults. In the year 2008, a Nielsen online survey on Australian Internet and Technology Report has revealed that online gambling is one of the leading activities conducted online. The online gambling is quite popular across all age groups and is one of the top online activities for the people in ages 35 years and over (Bond University, 2009). A research in the year 2001 has revealed that there were around 1400 sites which accept the real money wagers online. Since then, the number has experienced a significant growth. As of now, there are some analysts who think that in the coming future the growth rates may decline as many of the operators would close down recently as they are unable to book any profit in such a competitive environment. (Source: Online Gambling, n.d.) Reports have revealed that majority of the people participate in the casino style games. Apart from this, a considerable number of people get indulged into the sports setting sites and casinos and sports setting sites. The following is the player source and demographic estimations from a number of resources. (Source: Online Gambling, n.d.) It can be seen that most of the online gamblers fall in the age group of 26 to 34. (Source: South Australian Centre For Economic Research Studies, 2005) The above table displays the age distribution in Victoria and Western Australia. A considerable number of people fall in the age group of 30-49, which is also the major player group of online gambling. There are certain types of online gambling on the internet. In general, the online gambling can be classified into five broad categories: Sports Betting, Casinos, Off Track Betting (OTB), Lottery and Bet Matching. Sports Betting This has been an earliest form of online betting. Betting on sports is one of the major attractive forms of online gambling activities. Gamblers have more faith on the results than playing games with a computer. The results of the bet can also be verified independently. This kind of sports betting is already attached with gambling staying back at homes. The participants find it quite fun and easy to place a bet on online and watch the game on the television. Casinos: In majority of the internet gambling websites, it is not quite common to find the gambling games as blackjack, virtual three-reel slot machines, video poker, baccarat, keno, craps, roulette, video poker, pai gow poker, and Caribbean Stud. The quality of this gaming software varies broadly from one gambling site to another. A number of websites have well built software and they present the games in a safe and quality environment. Some sites do not have such sophisticated software which may not be as expected by the gamblers. Sophisticated software must include enough speed, sound and graphics in the gambling system. To participate in some of the online casino sites, the gamblers are needed to download the images and illustration on their computers before starting off with the playing. These games can be played fast and can be as entertaining as it would have been if they were indulged in a live casino with their counterparts (Hsu, 2007). Off-Track Betting (OTB): In off track betting, players used to bet on both the horse races and dog races. This type of betting refers to the betting on a race off the track. The participant can watch or listen to the live broadcast of the betting races on the television or radio or he or she can view the internet simulcasts. The betting was one the first legal gambling games. “Live horse racing is slow, with 20 to 30 minutes between races. The OTB allows bettors to place bets on races taking place at tracks in other locations or nations, creating non-stop betting action. In fact, there is no need for bettors to be physically present at the racing track. They can see the races on a screen. Similar to sports betting, the outcome of the races can be independently verified” (Kong, Ngan & Leung, n.d.). Lottery: This can be referred to as a scheme which enables the participants to get money or prizes; the influence of chance is more important in this case. In this gaming scheme one or more tickets with particular numbers on it draw prizes. Since a number of years, this kind of lottery tickets has gone online. Bet matching: Bet matching involves two persons who would exchange betting in any online gambling site. The gaming would allow the users to offer bets to other participants for or against the outcome of an event. The bets are matched with the outcomes and then the winners are announced. All these online gambling types are spreading their arena with the increase in the popularity of the same across the globe. However, the debate remains the same; whether this online gambling has positive impacts on the community and society. Impact of Online Gambling Internet gambling has become one of the fastest growing gambling forms in Australia. However, a little research has been done on the economic and social impact of such a popular activity which relatively new and increasingly popular among the Aussies. The usage of internet is quite wide with its indulgence into social and entertainment activities. Adding to these, internet is now increasingly used for playing internet gambling worldwide. According to a researcher, introduction of online gambling has some potential advantages as the platform has offered responsible gaming strategies. Adding to it, the sites would also have some corporate social responsibilities which are appropriately regulated. However, despite of all these advantages there are some more which are yet to come under light. The online gambling is highly accessible. This is fast and can be played alone at homes or any other place just with a credit card. The popularity and ease of the online gambling has encouraged unregulated sites to emerge which do not provide appropriate player protection measures (Griffiths & Parke, n.d.). These unregulated, illegal sites also can cheat on the players’ money by running the games with fraudulence. These sites can also allow the under 18 year olds to participate which can put a serious psychological impact on the youth of the country. There is no iota of doubt that in Australia, the gambling industry is highly regulated and the operators have to follow some strict protocols to offer the players a safe environment to pay in. However, there are many illegal sites which do not abide by the respective regulations and taxation rules (Southern Cross University, 2010). Online gamblers in Australia used a system of electronic cash and e-cash as mentioned by Australian Bankers’ Association. In the year 2003, The Delaware News Journal has revealed that according to the Treasury Department electronic cash was ever since the major money laundering threat. As per gaming author, Schopper, the Kyl legislation banning credit cards for online gambling would likely have incredible inadvertent consequences leading to money laundering. It would be practically impossible to criminalise the online gambling as operators are based on offshore and that is why they are beyond the reach of state laws. The online gambling demands the most powerful and untraceable money laundering systems which are still not imagined by the criminals. It would not be possible to put stringent laws or prohibit the online gambling system. This would drive the gambling underground and would put them into the hands of unscrupulous merchants. It has also been reported by ZDNet, Australia, that the act introduced in the year 2001 could not do much to stop the internet gambling (Internet Resources, 2010). The act precisely banned the online gambling; however, it has still allowed the online sports betting and lotteries to continue to exist. A survey was commenced by the Australian Casino Association to find the number of online gamblers, still visiting the overseas casinos. Chris Downy, the president of the Association, has revealed that overseas casinos are still visited by around 40 % of the online gamblers. Undoubtedly, the online gambling has become as one of the major businesses yielding great revenue amount. This can be assumed as the biggest advantage of the online gambling game. Apart from that, with the online gambling, people do not have to search for a physical gambling counter partner or nor do they have to go to any casino or horse racing clubs in order to participate in the gambling activities or place the bets on them. All these physical constraints are totally overcome by placing the gambling online. As soon as the players have a computer connected to the internet, they can play the games staying online. This surely has some advantages both for the community and for the business holders. It would not be wrong to say that in the physical casinos, a number of undesirable incidents and underworld activities can happen in there. However, in the internet domain, the chances are quite low for such disputes. This is also pretty easier for the business holders as they do not require investing capital to establish physical casinos. The same is also true for the online gambling players. Internet gambling has just made it easy for the players to participate in this virtual world of gambling (Europa, n.d.). This has definitely given the online gaming an edge with higher revenue growth. The prospective of online gambling is quite large with the increasing popularity of the online gambling among all the people of different age groups. PWC has revealed a report on the online gambling. However, they were not able to forecast the growth of specific gambling. It has been estimated that by the year 2014, the gambling revenue has been forecasted as $ 156.8 billion. (Source:PWC, n.d.) The above table displays the estimated cumulative average growth rate of the casino gaming starting from 2010till the year 2014. So, surely online gambling is going to have a positive impact on the online gaming companies. The online gambling can have a positive impact on the community; however, this is required to be thought of from a different perspective. With the increasing popularity of the online games, people would be more accustomed to the technology and internet. At the same time, community would also be profitable by the revenue yield from the online gambling processes (Bashan & White, 2002). However, there are certain other sides of this gambling process. As the gambling process has gone on the virtual world, one cannot assure the participation of appropriate age groups. The below 18 years age people are also participating in this game, which can have an adverse impact on the community. Legal Challenges in Australia In July, 2001, the Australian Parliament enacted an Interactive Gambling Act of 2011. This was followed by a year-long moratorium on the establishment and expansion of the interactive gambling industry. The act has prohibited the online gambling operators from providing an internet gambling service to the Australian residents. The act applies to interactive games and casinos on the internet. However, this is not applicable to the sports wagering and lotteries. These games are still regulated by existing state and territorial regulations. These have covered all the interactive gambling service providers including Australian and foreign owned businesses having business based on both Australia and offshore. There is a considerable amount of penalty in the case of violation of the rules and regulations. The maximum penalty for violating the laws is $220,000 AUD ($121,000 USD) per day in case of the individuals and $ 1million AUD ($606,000 USD) for the corporate bodies. The act has also made it offense to offer internet gambling services to the people in any ‘designated’ country. A designated country is the one which has asked for or already has received that designation from the Australian Minister of Communication, Information Technology. The licensed gaming operators in Australia are prohibited from offering services to the citizens of Australia (Government Accountability Office U S Government Accountability Office, 2010). Conclusion Gambling has a very long history. Since the inception, gambling has emerged as a controversial issue. A number of people argue that the gambling is required to be legalised as this is a leisure activity and a good revenue source. However, on the other hand a number of people argue that gambling should be banned as this may become addictive which would incur ethical and social costs. As, there is enough gap in the opinions regarding the legalisation of gambling, a number of different countries have adopted various policies and regulations in the arena of gambling. However, the games must be regulated in a way to prevent its adverse effects on the community. Reference Australian Casinos Online. No Date. History of Gambling In Australia. [Online]. Available at: http://www.australian-casinos-online.com/history-gambling.html [Accessed on January 31, 2011]. Basham, P. & White, K. 2002. Gambling with Our Future? The Costs and Bene?ts of Legalized Gambling. [Pdf]. Available at: http://oldfraser.lexi.net/publications/digital/gamblingwithourfuture.pdf [Accessed on January 31, 2011]. Bond University. 2009. Interactive Australia 2009. [Pdf]. 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