The growth of internet gambling and the implications for regulation and harm minimisation in Australia - Essay Example

?THE GROWTH OF INTERNET GAMBLING AND THE IMPLICATIONS FOR REGULATION AND HARM MINIMISATION IN AUSTRALIA INTRODUCTION The development of internet gavebirth to various new sources of revenues for the states and tools for entertainment for public. One of the products of internet is the online gambling which is increasing day by day. Australia is the first economy which legalise the online gambling and probably one of the first countries facing huge challenges produced by online gambling. In this report, I have discussed the growth of internet gambling in Australian economy and what are the implications of this growth on Australian government and harm minimisation in Australia. DISCUSSION AND ANALYSIS History of Gambling Industry The gambling industry in Australia was established with the entrance of new settlers in Australia and it soon became a leisure activity among various social groups. In the beginning, all original forms of gambling were prohibited however, gradually all of them were legalised (Australian Casinos Online). On April 8, 1999, the first online gambling site was developed and Australia became the first country to legalise internet gambling (Onlinecasinoarchives). The online gambling started in Australia in 1996 in the Northern Territory and in 2001, when the federal government legalised internet gambling, Interactive Gambling Act 2001 was introduced (Hsu, 2006). Since then gambling industry of Australia is expanding and growing very rapidly and it has even created a lot of challenges for the Australian economy. What Australian Government has been Doing to Control Online Gambling in Past? Internet gambling has established new challenges for the regulators because unlike traditional casinos, the online gambling websites cannot be closed (Schwarz, 1999). Therefore, because of the nature of online gambling, it could be only controlled through government regulations. Even after legalising gambling, Australian Government has always remained concerned to monitor and control online and traditional gambling. The Australian Government has taken the regulatory responsibility of online gaming and according to Interactive Gambling Act 2001, government has made domicile online gaming site illegal for the Australian residents and these websites only target the oversees community. However, despite the control through regulations and legislations, Australian Government is facing problems in control the internet gambling market in Australia (Fabiansson, 2010). Australian Gambling Regulation controls gambling in Australia. With the growing online gambling, Australian Government introduced Australian Interactive Gambling Act (IGA) 2001 which bans online gambling in Australia. According to this Act, offering interactive gambling service to an individual physically present in Australia is an offense. If a person commits this offence, he is subject to a penalty of $220,000 per day if he offers services to individuals and penalty of $1.1 million per day if he serves corporate bodies. Moreover, online wagering and lotteries are not prohibited (Humphrey, 2008). The online gambling costs are increasing and to minimise harm from gambling activities, harm minimisation strategies are in place. To achieve harm minimisation, Australian Government has adopted three strategies; first, through direct regulation of internet gambling sites; second, covering online gambling within the broader gambling regulation framework; third, achieving harm minimisation through non-regulatory approaches (FAHCSIA, 2009). Growth in Online Gambling in Australia The Australian economy realised the growing trends in traditional and internet gambling with the increase in household spending on gambling. With the expansion of gambling in Australia, the proportion of money spent on gambling per household also increased from 1.7 percent in 1982-1983 to 3.2 percent in 1997-1998 (Australian Bureau of Statistics, 2000). In 2002-2003, around Australian $18.54 million were spent on internet gambling in Australia (Hsu, 2006). Today, gambling has become the habitual activity of Australians and concerns for the government are increasing. According to Australian Gambling Council of Victoria, the cause behind one suicide every fortnight is gambling and one-third of problem gamblers fulfil their funds’ need through crime-related activities (Clark, Cho, Hoyle, & Hynes, 2010). The following table shows the top five countries in online gambling in 2007 and 2008. It is significant to note that in 2008, Australia has become the fifth top country in online gambling. Moreover, in 2007 and 2008, Australia has been the fourth or fifth number country in online casino, online bingo and online poker. Table: Top Five Countries in Gambling Industry 2007-2008 Source: Readymadecasinos, 2007/2008 Implications for Regulation and Harm Minimisation in Australia After identifying a significant growth in the online gambling trend in Australia, the objective of this essay is to identify the implications for regulations and harm minimisation. From the study of previous practices of government to monitor and control gambling, it is evident that Australian government aims to maintain a limit in gambling and reduce its growth because of the increasing crime rate and spending on gambling. However, still the statistics on online gambling shows a significant increase in gambling despite the Government regulations and harm minimisation initiatives. In the light of initiatives that Government of Australia has always been taking show that government acknowledges its role to control online gambling. However, whether the continuation of early practices and initiatives can help the government to monitor the increasing growth in online gambling or not, is still debatable. In 2000, when Australian government identified increasing trends in growth of interactive gambling, Ministry of Communications, IT and Arts announced that government would conduct a feasibility study to analyse the feasibility and consequences of interactive gambling. After the inquiry undertaken by National Office for the Information Economy, some conclusions were made which were published on March 27, 2000 (APH Australia, 2001). The first finding is that various technical methods can be used to ban online gambling however, technical methods to reduce content access are not hundred percent effective. Second, a strict legislation on domestic gambling providers can reduce the rate of internet gambling. Third, internet gambling cannot be banned through financial controls. Fourth, by restricting the access of Australian residents to internet gambling, Australian economy would get a very small economic benefit whereas, the potential benefits which gambling industry is providing would be reduced. Since this study has highlighted some very important aspects therefore, I will evaluate the implications of current growth in online gambling in Australian, in the light of the findings of this study. If Australian government aims to take more initiatives to completely ban the online gambling in Australia, regardless of the ways through which government achieves this aim, then according to the last finding of the study, government will face significant revenue shocks. The supporters of online gambling argue that by lifting the ban, such as the prohibition of gambling for eight years old, government will be better able to reduce the problem gambling. Moreover, in the long run, Australia will face the loss of gambling related commercial opportunities and tax revenues (Carter, 2010). When the opinions within Australian ministry are already segmented into two groups one as the supporters of gambling and other as the opponents, then finding an effective solution is a challenge. If Australian government give more preference towards discouraging the growth of this harmful activity then how to achieve this aim becomes a dilemma for the government. As evident from the findings, financial controls cannot ban online gambling, the next strategy could be the legislative framework. However, despite the harm minimisation initiatives and heavy monetary penalty, Australian government has been unable to limit the growth of internet gambling. According to the study, controlling the mode of online gambling becomes the last strategy for Australian government. However, as mentioned above, technical ways to reduce the access to content can never ensure 100 percent effective control. In short, online gambling appears to be another drawback of internet which is completely out of control because of its being boundaryless nature. Conclusion Based on the above discussion and analysis, it has been analysed that Australia has become one the major countries in online gambling industry. The economic benefits which gambling industry has been providing to Australia stopped the government to pursue the effective harm minimisation programs. Today, online gambling has increased the concerns for Australian regulators because of the increasing problem gambling, crime rate etc. Even the harm minimisation programs have been unsuccessful to curb the growth of increasing internet gambling. It can be projected based on the current growth of internet gambling that soon gambling will become the largest industry of Australia and concerns will further increase. If Australian government pursues stricter legislative framework and other strategies to stop the growth of internet gambling, it forgoes the huge economic benefits. If Australian government keeps pursuing the current strategies then current growth will keep its pace. On the other hand, if Australian government introduces more flexible policies, then economic issues can increase however, government can enjoy huge influx of revenues. Therefore, in which direction Australian government should go, completely depends on the long term economic strategies of the government. However, one important thing which this research essay has highlighted is that growing online gambling does have significant implications for Australian government and harm minimisation. BIBLIOGRAPHY APH Australia. (2001, September). Gambling Policy and Regulation. Retrieved January 24, 2011, from http://www.aph.gov.au/library/INTGUIDE/sp/gambling_ebrief.htm Australian Bureau of Statistics. (2000). 2000 Year Book Australia No. 82. Australia: Aust. Bureau of Statistics. Australian Casinos Online. (n.d.). History of Gambling In Australia. Retrieved January 22, 2010, from http://www.australian-casinos-online.com/history-gambling.html Carter, S. (2010). Australia upholds online gaming ban . Retrieved January 25, 2011, from http://www.egrmagazine.com/news/573182/australia-upholds-online-gaming-ban.thtml Clark, E., Cho, G., Hoyle, A., & Hynes, P. (2010). Cyber Law in Australia. Australia: Kluwer Law International. Fabiansson, C. (2010). Pathways to Excessive Gambling: A Societal Perspective on Youth and Adult Gambling Pursuits. England: Ashgate Publishing. FAHCSIA. (2009, June 23). Review of current and future trends in Interactive gambling activity and regulation. Retrieved January 23, 2010, from http://www.fahcsia.gov.au/sa/gamblingdrugs/pubs/review_trends/Documents/chap3.htm Hsu, C. H. (2006). Casino industry in Asia Pacific: development, operation, and impact. New York: Routledge. Humphrey, C. (2008, March 27). Australian Interactive Gambling Act 2001. Retrieved January 22, 2011, from http://www.gambling-law-us.com/Articles-Notes/online-gambling-australia.htm Onlinecasinoarchives. (n.d.). The Roots of Online Gambling in Australia. Retrieved January 22, 2011, from http://www.onlinecasinoarchives.com/WORLD/australia/ Readymadecasinos. (2007/2008). Online Gambling Trends. Retrieved January 24, 2011, from http://www.readymadecasinos.com/online-gambling-trends.htm Schwarz, J. M. (1999). The Internet Gambling Fallacy Craps Out. Retrieved January 22, 2011, from Berkeley Technology Law Journal: https://litigation-essentials.lexisnexis.com/webcd/app?action=DocumentDisplay&crawlid=1&crawlid=1&doctype=cite&docid=14+Berkeley+Tech.+L.J.+1021&srctype=smi&srcid=3B15&key=7ac1fc55771fc3709f93ae19e82cbee9 Read More