Gambling Harm Reduction Amendment Bill

Gambling (gambling Harm Reduction) Amendment Act 2013
Gambling (gambling Harm Reduction) Amendment Bill

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Structure of the Bill

The Bill consists of two Parts:

Part 1 amends the IGA to clarify licensing requirements for interactive gambling services in Australia, to introduce a civil penalty regime to be enforced by ACMA and to define prohibited interactive gambling services not to be provided in Australia. [2] It also amends the ACMA Act to strengthen ACMA’s enforcement powers
Part 2 contains application and transitional provisions.

The Bills Digest at a glance

Purpose of the Bill

The purpose of the Interactive Gambling Amendment Bill 2016 (the Bill) is to amend the Interactive Gambling Act 2001 ( IGA ) and the Australian Communications and Media Authority Act 2005 ( ACMA Act ) in response to certain recommendations made by the 2015 Review of the impact of illegal offshore wagering to:
- clarify the law and
- strengthen enforcement powers of the Australian Communications and Media Authority (ACMA).

Structure of the Bill

The Bill consists of two Parts:
- Part 1 amends the IGA to clarify licensing requirements for interactive gambling services in Australia, to introduce a civil penalty regime to be enforced by ACMA and to define prohibited interactive gambling services not to be provided in Australia [1]
- Part 1 also includes proposed changes to the ACMA Act to strengthen ACMA’s enforcement powers
- Part 2 contains application and transitional provisions.

Background

The IGA was introduced by the government in response to concerns about the effects that interactive or online gambling may have on Australians.
Since its passage, a number of critics of the IGA have noted that the legislation has done little to prevent the spread of interactive gambling. Some have argued that its inherent weaknesses have contributed to the growth of this form of gambling.
There have been a number of reviews of gambling which have considered changes to the IGA . This Bill reflects recommendations made by the most recent review into the impact of offshore wagering.

Stakeholder concerns

Stakeholders agree that changes need to be made to make interactive gambling legislation and policy more effective. All appear to agree that a national co-operative strategy for interactive gambling is called for and that it should be accompanied by preventative, educative and counselling measures. There are differences of opinion, however, on the ways that improvements can be achieved. Some favour a degree of legislative liberalisation while others call for tougher legislative requirements.

Key issues

Proposed prohibition of click to call interactive services has been a key issue of debate. The Bill intends to re-define telephone betting service specifically to exclude the in-play betting options offered by interactive betting services. This has been seen by some as enhancing harm minimisation, while others have argued that the move will be ineffective because of the popularity of in-play betting online. They claim customers will continue to gamble offshore regardless.

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Item 33 would amend the heading of Part 2 of the IGA to read “Designated interactive gambling services not to be provided to customers in Australia”. This amendment reflects the changes in terminology proposed by items 7 and 17, which would replace the term interactive gambling service with the new terms prohibited interactive gambling service and unlicensed regulated interactive gambling service (collectively known as designated interactive gambling service s).

Items 34 and 35 would amend the heading of section 15 of the IGA, and paragraph 15(1)(a) of the IGA, to substitute references to interactive gambling services with references to prohibited interactive gambling services .

Item 34 would also make minor technical amendments to the heading of section 15 to reflect that the section now contains both criminal offence and civil penalty provisions (see item 36).

Item 36 would make amendments to section 15 of the IGA.

Subsection 15(1) of the IGA provides that a person commits an offence if they intentionally provide an interactive gambling service with an Australian-customer link. Subsection 15(2) provides that a person who contravenes subsection (1) commits a separate offence in respect of each day during which the contravention continues (including a day of conviction for the offence or any later day).

Australians are among the biggest gamblers in the world. Interactive gambling is growing in Australia due to the ubiquity of internet-enabled devices and changes in consumer behaviour. The Review referred to a 2015 presentation to the United Nations Congress on Crime Prevention and Criminal Justice which estimated the global sports betting market was worth up to trillion and that the illegal sector of the market accounted for around 90 per cent of that sum. In Australia, it has been estimated that illegal offshore gambling is a billion annual business. Consequently, offshore gambling operators target Australians which leads to negative social and economic effects on industry, racing and sporting associations, problem and at-risk gamblers, consumers and government.

To reduce the adverse effects, the penalty amounts for contraventions of the IGA need to be high, in particular for major offences including the provision of prohibited interactive gambling services and unlicensed regulated interactive gambling services, to deter offshore global entities from providing services to the Australian market.

Item 35A would increase the amount of the maximum penalty for commission of the offence in subsection 15(1) from 2,000 penalty units to 5,000 penalty units, in recognition of the significant harm caused to the Australian community by the provision of prohibited interactive gambling services. The increased penalty will ensure that the offence provides a sufficient deterrent, and will provide consistency with the new offence provision in proposed section 15AA (regarding provision of an unlicensed regulated interactive gambling service).

Item 36 would insert new subsections 15(2A) and (2B) into the IGA to introduce parallel civil penalty provisions where a person provides a prohibited interactive gambling service that has an Australian-customer link (as defined in section 8 of the IGA).

Proposed subsection 15(2B) provides that there will be a separate contravention of subsection 15(2A) in respect of each day during which the contravention occurs, including the day the relevant civil penalty order is made or any later day.

This is one of several amendments to insert civil penalty provisions into the IGA in addition to existing criminal offences to provide the ACMA with a greater and more graduated range of enforcement options.

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Impact of relocation provisions on existing Class 4 venue policies

The Gambling (Gambling Harm Reduction) Amendment Act (the Amendment Act) originated as a Member’s bill in the name of Te Ururoa Flavell. The select committee that considered public submissions on the bill recommended the inclusion of the new provisions on relocation policies. The provisions, which came into effect on 14 September 2013, provide a tool for Territorial Authorities (TAs) to help address the concentration of gaming machine venues in high deprivation areas.

Impact of relocation provisions on existing Class 4 venue policies (.doc, 82KB)
Impact of relocation provisions on existing Class 4 venue policies (.pdf, 82KB)*

Class 4 Gambling Venue Policy

This policy must consider the social impact of gambling within the territorial authority's district and specify whether or not Class 4 venues may be established in the district and, if so, where they may be located.
Matters a territorial authority may have to consider in determining its policy include:

The characteristics of the district and parts of the district
The location of kindergartens, early childhood centres, schools, places of worship, and other community facilities
The number of gaming machines that should be permitted to operate at any venue or Class of venue
The cumulative effects of additional opportunities for gambling in the district
How close any venue should be permitted to be to any other venue
What the primary activity at any venue should be.

The policy may also specify restrictions on the maximum number of machines that may be operated at a Class 4 venue. This policy can be adopted, amended or replaced only through the use of the special consultative procedure outlined in the Local Government Act 2002.
There is more information about what is required in a Class 4 gambling policy in the Gambling Act 2003. Sections 95, 96 and 98-103 are the most relevant sections dealing with these requirements.

TAB Venue Policy

Every territorial authority must also have a TAB venue policy. Territorial authorities must also develop and review these policies through the use of the special consultative procedure outlined in the Local Government Act 2002 and have regard to the social impact of gambling in the territorial authority district. They must be reviewed every three years.
The policy must specify whether the New Zealand Racing Board may establish new stand-alone TABs (i.e. the policy does not deal with TABs in pubs and clubs) in the district and, if so, where they may be located. The New Zealand Racing Board requires a consent from the relevant territorial authority before it establishes a new stand-alone TAB.
Territorial authorities should ensure that the wording of their policies clearly covers every possible situation (for example, a proposal to relocate a TAB from one place to another).
There are some very specific steps for territorial authorities to follow when making their TAB venue policies. The relevant provisions are sections 65A to 65E of the Racing Act 2003.

Obtaining Territorial Authority Consent

Generally, a society must obtain a territorial authority consent in the following circumstances:

If a society proposes to increase the number of machines that may be operated at a Class 4 venue (whether by way of an application for, or amendment to, a Class 4 venue licence, and whether or not in association with an application for ministerial discretion under section 95 or 96)
The first time there is an application for a Class 4 venue licence for a venue for which a Class 4 venue licence was not held on 17 October 2001
If a society applies for a Class 4 venue licence and a Class 4 venue licence has not been held by any society for the venue within the last six months.

A territorial authority must consider every application for a territorial authority consent in accordance with its gambling venue policy. The territorial authority cannot issue a consent until its gambling venue policy is in place.
The territorial authority may or may not place a condition on gaming machine numbers. It may not place other conditions. It's important to note that any proposed 'cap' in gaming machine numbers would only affect new venues as existing venues already have a statutory entitlement to the number of machines they are operating.
Note: A territorial authority consent is not revocable once issued, nor can it lapse or expire - it is a one off assent to a situation. A territorial authority also does not have any retrospective powers with regards to any consented venues once they have entered the Department's licensing process. Once a territorial authority consent has been used and a licence issued for the venue concerned, the consent remains in effect for as long as a class 4 licence is held for the venue. If there is subsequently a period of more than six months where a class 4 licence is not held for the venue, the territorial authority consent ceases to have any effect. The venue becomes a 'new' venue under the Act and an application for a new consent must be made to the territorial authority. This application must be assessed under the territorial authority’s class 4 venue policy that is current at the time of application.
When the Department receives a territorial consent for venue licensing, in order to assess its validity/lawfulness the Department looks at:

Whether the relevant territorial policy, on it's face, allowed the issuing of that consent
Whether any amendment made to a territorial authority policy was made lawfully with the use of the special consultative procedure in the Local Government Act 2002
Any other information the Department is aware of that suggests a consent is not valid.

Resource for Territorial Authorities' Policy Reviews

The Ministry of Health has a Resource for Local Government, which is available for download on theMinistry's website. The purpose of the resource is to assist territorial authorities with their Class 4 and TAB gambling venue policy reviews.
This resource includes:

information about gambling legislation and the roles of various Government departments in New Zealand
the role of the territorial authorities in reviewing their gambling venue policies (including what they are required to do, what they may choose to do, and what they cannot do)
gambling venue policy options for territorial authorities
background information on the economic and social impacts of gambling and problem gambling in New Zealand
guidance on the statistics that could be used to inform gambling policies, based on available and well-referenced research
guidance on how the territorial authority could best present the statistical information (using tables, graphs, and/or charts) so that it is easily understood.

Advice from the Department to Territorial Authorities

The Department sent a Letter to Territorial Authorities (PDF, 122K)* on 22 February 2007 advising them of some of the gambling and problem gambling statistics and information they may want to consider when reviewing their policies.

Tips for Developing Policies

The tips below should help you when it comes to developing your Class 4 gambling venue and/or TAB venue policies:

Make sure the wording of your policy clearly covers every situation you intend it to cover. The policy should clearly state how it would operate in every circumstance envisaged by the Act (i.e. club applications under sections 95 and 96, and proposals for a group to relocate from one venue to another)
Ensure that your policy's wording is consistent with the Act - that it includes all elements that are required to be included and does not take irrelevant considerations into account
Make it clear whether you intend a policy to be permissive or prescriptive, and ensure it is phrased accordingly
Remember, what you think a policy allows may not appear so to an independent reader. Mistakes in drafting could be expensive to rectify at a future date
Ensure changes to a gambling venue policy are consulted on and documented in a manner that complies with the relevant legislation
If in doubt seek legal advice.

Frequently Asked Questions

We hear that gaming machine profits have dropped. Do we have any regional/national figures on the extent of any 'drop' at all?

Each year the Department releases gambling expenditure statistics that shows the amount spent on the four main types of gambling activity - racing and sports betting, New Zealand Lotteries Commission products, gaming machines (outside casinos) and casinos - from 1985 onwards. This information is available on the Gambling Statistics page.
The amount paid to community purposes from non-casino gaming machines depends not only on the level of gaming machine revenue, but also on the costs taken out, and any misappropriation from that revenue. 'Gaming machine revenue' is the same as 'spending' or 'expenditure'. It is the amount players lose on the machines.
The number of non-casino gaming machines reached a peak of 25,221 at 30 June 2003, and between June 2008 and June 2009 numbers declined from 19,856 to 19,479. The number of non-casino gaming machine venues declined from 1552 to 1501 over the same period. Numbers have declined further since.
The Department compiles these statistics using information from the Electronic Monitoring System (EMS), gambling operators and third party sources. All non-casino gaming machines were connected to the EMS from 9 March 2007. The Department releases EMS data on a quarterly basis.

To what extent does the availability of gaming machines contribute to or act as a 'driver' for harm?

Information on the link between the availability of gaming machines, particularly in lower socio-economic areas, and harm from gambling can be found in Problem Gambling Geography of New Zealand on the Ministry of Health website. This website also contains statistical information on presentation numbers for treatment for problem gambling.

Some territorial authorities have population ratio based caps. How effective are these given there is uncertainty about actual population levels between censuses?

Some territorial authorities that have used population caps define the population of the district in terms of the usual resident estimates available from Statistics New Zealand on a particular day each year. Other territorial authorities have used the official census night figure. The Department has no information on their effectiveness.

What information do you have on national/regional expenditure on Gaming Machines? National or regional social impact material?

Currently expenditure data is gathered annually on a national level. See the Gambling Statistics

page for useful information including:

Gambling venues and numbers of machines by territorial authority as at a certain date
Difference in gaming machine venues and numbers by territorial authority region from June 2006 (or earlier) to September 2006
National gambling expenditure information up to 30 September 2006.

The Department also has a range of Research Reports containing information on the social impact of gambling.
The implementation of the Electronic Monitoring System (EMS) means more accurate regional expenditure data will soon be available. The Department is also initiating a project aimed at gathering detailed, regular data on grants, including grants by TA district. With respects to regional grant information, you may want to contact Societies.

Gambling (gambling Harm Reduction) Amendment Act 2013

For more general research, there are a couple of reports on the Ministry of Health website, which may be useful.

Are we required to mandate that gambling venues must have a liquor licence?

A territorial authority can choose to place this requirement in their Gambling Venue Policy as a 'relevant matter' but no, this is not a requirement for the Gambling Act or the Department.

Are we required to use the Special Consultative Procedure (SCP) if we have reviewed our Act and are just carrying it over?

In the Department's opinion, no, the SCP is only necessary when adopting a Gambling Venue Policy for the first time or otherwise amending, changing or replacing a Gambling Venue Policy.

Should we just use the gaming machine statistics on the Internet or speak to DIA about current machine numbers?

While the machine numbers data on the internet provides a useful snapshot, we urge territorial authorities wanting an up-to-date appreciation of what is operating in their district to get in touch with us and make a section 103 request.

Are children banned from gambling venues?

Children are not banned from gambling areas or gambling venues outright. They are not permitted to engage in Class 4 or other restricted gambling and the venue operator has a duty to minimise the possibility of under 18 year olds gaining access to Class 4 gambling.

Gambling (gambling Harm Reduction) Amendment Bill

Do we really need to engage in an expensive social impact study in reviewing our Gambling Venue Policy?

It is entirely over to the territorial authority as to how it wants to manage its regional social impact assessment.

More Information

If your query is not answered above or you would like further advice please contact the Department's Gambling Group.
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