Unravelling Australian Online Gambling Laws

Understanding the Interactive Gambling Act 2001

The Interactive Gambling Act (IGA) of 2001 protects Australians by regulating and controlling online gambling activities within the country. With the potential harms associated with online gambling – especially now that the internet has changed the way we live, work and play – the IGA accomplished an important role promoting responsible gambling practices.

Understanding the IGA is essential for everyone: companies hoping to offer gaming services and gamblers alike. But don’t worry. We cover the objectives and key provisions of the law on this article.

2017 Update to Australian Online Gambling Laws

The Commonwealth government made a large update to the IGA in 2017 to address the proliferation of unlicensed so-called ‘offshore’ casinos and sports books. The Interactive Gambling Amendment Act 2017 went above online gambling companies and created a code for how internet service providers (ISP) are to address interactive gambling services that run afoul of the country’s regulations.

All ISPs must provide their customers with the option to filter out all identified unlicensed or illegal gambling websites. Essentially, this filter blocks consumers from accessing illegal gambling content. By shifting responsibility for blocking gambling content from the companies themselves to the ISPs, the government makes it less likely for customers to easily access offshore gambling services.

Other reforms in the 2017 amendment included restricting which gambling companies can offer their customers credit. With some exceptions, online casinos are prohibited from acting like a bank for their gamblers and can’t allow wagers without funds on deposit.

The amendment also strengthened the legal bite for any company or individual who attempts to operate or advertise illegal gambling. In addition to criminal penalties, individuals can face monetary fines up to $1,665,000, while corporations can be fined up to $8,325,000.

Consumer protection measures

In 2019, the Australian government updated the IGA to provide a national self-exclusion register for the first time. This register allows people who are struggling with problem gambling a simple method to prevent further online wagering. Once a person signs-up with the national self-exclusion register, all licensed interactive gambling companies must take steps to ensure they cannot access online wagering services.

Previously, self-exclusion registers were a hodgepodge of state and territorial lists or company by company. Now, someone having trouble controlling their gambling can simply register in one place and be blocked from all legal online gambling providers nationwide.

The self-exclusion register is not the only consumer protection used in coordination with the IGA. The Australian Department of Social Services created a National Consumer Protection

Framework for Online Wagering (NCPF) that is intended to apply uniformly throughout the Commonwealth, regardless of state or territory. The NCPF contains ten consumer protection measures that are intended to reduce the harms from problem online gambling.

These measures are varied and include references to parts of the IGA and its subsequent updates, like the self-exclusion register and general prohibition from casinos extending credit to their online customers. However, the NCPF goes further, with requirements regarding easy account closure mechanisms and prohibitions on inducements.

For example, online wagering services cannot use any rewards, benefits, or credits to convince players to sign-up for an account. The same framework also restricts casinos from making customers play promotional tokens or credits a certain number of times before being able to bank the amount.

Eventually, the NCPF intends to have all online casino and gambling companies use standard language regarding potential harms from wagering. Creating uniform language for the companies to use in advertising and marketing materials is intended to eliminate consumer confusion and clearly convey the downsides of problem gaming.

Another one of the NCPF’s provisions goes beyond the national self-exclusion register by requiring online casinos and sports books to offer pre-gambling deposit limitations.

Customers can pre-set their limits before engaging in any wagering. These limits cannot be instantaneously changed, which is supposed to give gamblers a cooling-off period before risking additional money.

All ten of the provisions in the NCPF are designed to work with the regulations contained in the original Interactive Gambling Act 2001. Combined with its subsequent updates, the IGA creates a restricted online gambling marketplace throughout the entire Commonwealth.

The role of the Australian Communications and Media Authority

Various state and territorial parties license and regulate gambling companies, but the IGA applies to every casino aiming to do online business with Australians. In fact, the Australian Communications and Media Authority (ACMA) maintains a register of all casinos licensed to offer interactive gambling anywhere within the Commonwealth.

These online gambling services are allowed to sign-up and stake players in Australia. Any online casino that is not licensed – and on the ACMA register, is offering illegal services. Luckily for you – and us, all the casinos we review are licensed and registered.

Are you a professional gambler? Keep reading

Australian gamblers are lucky as their occasional winnings are free from tax. However, professional gamblers must pay tax on their winnings. Australian courts have struggled with defining who is and who is not a professional gambler. But for most individuals, you can build your bankroll away from the tax-collector’s prying eyes.

Who is a professional gambler in Australia?

Since professional gamblers are subject to taxation on their winnings, it is critical to understand who is and who is not considered a professional gambler.

Australian courts have not been explicit about a definition. Unfortunately, this means casual gamblers may unknowingly be considered professionals, depending on their unique circumstances.

One key test for who is considered a professional gambler is whether the individual is carrying on a business of gambling. This makes sense, as “professional” indicates someone is acting in a business-like capacity.

But what are factors that lead to a conclusion you may be carrying on a business of gambling? There are three crucial questions to examine:

1. Is the activity conducted in the manner of a business operation?
2. Is the individual in possession of specialist knowledge regarding gambling?
3. How large is the gambling operation?

The answers to these three questions, taken together, will determine whether a player must pay tax on their gambling winnings.

Should you pay tax on your gambling winnings?

Gambling operators and companies operate differently and need to pay tax on their revenues. For operators licensed under the Interactive Gambling Act 2001, their business operations are taxable.

But because of the courts’ test, most gamblers will not need to pay tax on occasional gambling winnings. For gamblers who clearly are only betting on the ponies or a footy game occasionally, there is little risk. However, there are certain circumstances you should carefully avoid.

The first is betting on an industry where you have inside, special knowledge. For example, if you are employed in horse-breeding or training, you may want to avoid betting at the races. Or, if you do, consider paying tax on your winnings. Your connection to the racing industry may make your wagering professional.

The second is betting large sums of money. If you regularly throw down a few low-level sports bets, you will both avoid the tax-authority’s radar and be unlikely to be deemed professional. But tossing around a lot of dollars can draw attention. Especially for those gamblers who spend a lot of time developing betting models or doing research, large bets could create a problem.