ONLINE POKER: Legislation a value bet under Coalition Government

With the Federal Election just over a week away, there’s been some talk of which party’s policies – particularly relating to online poker – will best suit the Australian poker community. Respect to those who think deeply enough to consider how best to cast their vote.

Regardless of your political persuasion, $1.04 favourites are $1.04 favourites for a reason and, come September 8, we will awaken to the first images of Prime Minister Tony Abbott.

But claims that an Abbott victory will mark the end of online poker – any online poker – are somewhat inaccurate.

Any gains made under the Rudd/Gillard/Rudd Government in terms of online poker legislation (and be assured these gains were at a Departmental level, not a Ministry level) will be put on hold for a considerable amount of time as the PM tackles a long, long list of issues well ahead of your ability to sit down and play an ANZPT satellite.

Here’s another $1.04 favourite – while it may be the wish for players and those in the industry who still derive a direct or indirect benefit from dealings with the illegal offshore operators, the status quo will not remain. As stated in the Coalition’s strangely-titled ‘Policy to Help Problem Gamblers’, “the Coalition will investigate methods of strengthening the enforcement of the IGA and ensuring Australians are protected from online gambling operators”.

Remember, no laws need to change for this to occur. Despite arguments of ‘grey areas’ in the law and ‘personal freedoms’, there are enough triggers within the existing Interactive Gaming Act (2001) to make this a reality. The new Federal Government could also choose to use powers available through the Australian Crime Commission (as the Labor Government was advised to use at the time of Black Friday) or myriad banking and financial laws to cease transactions between financial institutions and the illegal offshore sites.

Few in the poker community understand the level of dismay and frustration among lawful Australian gaming and wagering operators that illegal online poker, casino sports betting and bingo operators have been able to generate almost $800m per year for much of the past decade with virtually no Federal Government or Australian Federal Police intervention.

The Australian Wagering Council (AWC), which comprises the membership of Australia’s most prominent and respected independent wagering and sports betting companies, has actively campaigned for enforcement of the IGA. At the recent Gaming, Racing and Wagering Conference in Sydney, the case of Full Tilt Poker was cited as an example of, no matter how big their business, offshore operators could not always be trusted to fulfil obligations in the jurisdictions that provide their licences.

Ironically, the favourite ‘poster boy’ of AWC’s lobbying against the illegal offshore operators is Aussie sporting icon Shane Warne through his role as a brand ambassador of 888Poker. I was surprised by the fine detail and knowledge of the AWC in this regard via their dossier relating to 888’s numerous marketing activities in Australia. The AWC is just one of several Australian-based gaming bodies lobbying in this manner.

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Against the backdrop of what would appear to be an insurmountable barrier for the future legalisation of online poker in Australia, several factors need to be considered. Politicians come in two forms – those seeking power, and those in power. For the former, an anti-gambling platform plays to the masses so it’s hardly surprising that the Coalition have, outwardly, taken such a firm stance.

Of course, politicians have, on occasion, changed their minds! Or more accurately, policies that don’t play well in the public arena pre-election are much easier to implement once a new Government – and a Government that’s likely to hold a significant majority – is installed.

It’s against such a backdrop that low-key lobbying efforts have been made in recent months by a surprising array of those with an interest in the possible legislation of online poker and casino games. Representatives from the local poker industry have, sadly but perhaps not surpringly, been absent in these discussions.

The lobbying position has focussed on the revenue generated by the illegal offshore sites that is lost to Australia. Figures costed on behalf of PokerMedia Australia estimate that legalised online poker offering a complete range of games could generate as much as $30 million in revenue for the Federal Government, with a figure as high as $80 million attainable.

Recommendations from recent Senate inquiries relate only to the introduction of tournament poker, which would impact this figure, while the liquidity of player pools is also yet to be considered. But discussions have been positively received to this point and, once the new Government is installed, lobbying discussions can move to a more proactive level.

To gauge the likelihood of legalised online poker, one only needs to consider the looming battle of the giants in the corporate sports betting arena. Two massive UK operators – William Hill (owners of Sportingbet, Centrebet and Tom Waterhouse) and Paddy Power (owners of Sportsbet and IASbet) are preparing to go to war for a bigger slice of the wagering dollar. Without stating the obvious, both are very keen to have other marketing avenues to advance their brands in the local market.

Sites like PokerStars and 888 will, of course, defend their market share as aggressively as possible but they have virtually no clout at a Federal level. In recent months, a casino operator held what amounted to a de facto tender process with the view to partnering with an offshore site to establish its own online poker platform with an expectation of regulation occurring. I am aware of at least three sites that participated in this process with, bizarrely, two privately claiming they were “over the line”.

Unlike the US, where PokerStars have been able to return to the market at a State level having been booted into the Atlantic Ocean at a Federal level, such a scenario is unlikely to play out here given the key differences in online gaming laws at a national level. But it’s not impossible. A settlement figure of AUD $25-30 million has been mooted although such discussions remain a long way into the future.

I’ve read the comments of players who have stated their intention to move abroad should the Coalition Government win the election. If they wish to continue to play within the existing poker paradigm, that’s probably what they’ll need to do. I empathise with their predicament, but the Government isn’t entirely to blame. Offshore sites chose to break our laws while various Federal administrations haven’t enforced them. Two wrongs don’t make a right.

For too long, our poker industry has adopted a “head in the sand” approach to online poker. The opportunities that a fully legislated and regulated market offers outweigh the current situation by a huge, laughably huge, amount. Greater marketing budgets, locally focussed promotions, sponsorship opportunities, mainstream exposure, a generic local tour, employment … the list goes on. Bring on the election of the Federal Coalition Government and the opportunities it will offer our industry.

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