Online apps take bite of illegal betting

Concerned: Senator Richard Di Natale wants the federal government to “clamp down” on overseas gambling operators. Photo: Pat Scala Senator Nick Xenophon wants legal loopholes to be closed.

Independent MP Andrew Wilkie wants the rules on online gambling sites to be tightened. Photo: Brendan Esposito

Apple Australia may be breaching federal online gambling laws by offering apps such as PokerStars which allow Australians to bet on casino-style games with real money.

”We don’t allow online poker in Australia for Australian people under the Interactive Gambling Act … they [Apple] have got an obligation to take down apps that are against Australian law and they should do it,” said Greens senator Richard Di Natale, a member of the gambling reform committee.

While online sports betting is flourishing, the act prohibits the provision of all online casino-style gambling to Australians.

Fairfax Media was able to download the PokerStars app from the Australian iTunes app store, deposit real money and join cash tables. Apple declined to comment.

The final report of the review of the act, released in March, found that there may be about 2200 online gambling providers illegally offering services to Australians, who lose an estimated $1 billion a year on online gambling outlets that are not licensed in Australia.

The review found that existing regulations were not adequate and recommended the legislation be amended to enable and encourage prohibited online gaming sites to become licensed. However, the government has rejected the recommendation.

Many services are hosted overseas and so operate without Australian consumer protections and regulations and do not pay any tax here. Some, like PokerStars, have an Australian office and bank accounts.

Senator Di Natale said the federal government should ”clamp down” on these operators where possible. He also expressed his concern about social gambling apps on services like Facebook, which he believes may ”normalise” gambling, particularly for children.

Some online gambling services exploit a further legal loophole by allowing Australians to pay real money for virtual currency which is then gambled but cannot be cashed out. Independent senator Nick Xenophon said this ”habituates gambling”.

”If the government is serious about … [avoiding] the kids of today becoming the gambling addicts of tomorrow they need to close this loophole,” Senator Xenophon said.

One Perth-based social gambling app operating in the grey area is Chumba Casino, which founder Laurence Escalante said crossed social gaming with online gambling by adding experience points, avatars, quests and social bonuses.

”We ‘gamify’ gambling to make it even more fun, accessible and safe,” said Mr Escalante, who recently raised $2.5 million venture capital and is seeking a gambling licence.

”[Prohibition] simply doesn’t work, and enforcing it in practical terms is difficult, if not impossible.”

Gambling reform committee chairman and independent MP Andrew Wilkie has said rather than allowing online gambling sites to be licensed in Australia, the government should ”tighten” the rules further ”and put in place strategies to deter Australians from accessing the dangerous offshore sites”.

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