Michelle Rowland (Greenway, Australian Labor Party, Shadow Minister for Communications) Share this | Link to this | Hansard source

I rise to speak on the Interactive Gambling Amendment (Lottery Betting) Bill 2018. Labor has long been on record with concerns about the impact of lottery betting or synthetic lotteries on Australian consumers and small businesses. These concerns prompted Labor to consult with a range of stakeholders, including the newsagents national body, in the lead-up to the launch of the Lottoland's Gotta Go! campaign, as well as with lottery betting provider Lottoland, as an example. These concerns prompted Labor to formally request the ACCC to undertake an investigation into representations made by companies that offer betting on lottery results, such as Lottoland, given concerns they may mislead or deceive consumers into believing they are purchasing a lottery ticket or directly participating in a lottery. The ACCC responded by undertaking to continue to review developments and complaints received in relation to these services. Twice, Labor declined to support proposed Senate amendments to ban synthetic lotteries on the run, citing the need for stakeholder consultation.

Labor has kept a watching brief on these issues for over a year now, including the measures that have been implemented or are being considered by individual states and territories. For example, last year the Northern Territory government introduced a prohibition on betting on the outcome of Australian lotteries. This was a welcome step but didn't address all the concerns associated with lottery betting services. South Australia does not permit lottery betting services, and it appears that this has been effective in stopping these services being provided to South Australian residents. The Tasmanian government announced in October last year that it will take steps towards banning lottery outcome wagering. Media reports have indicated that Victoria, New South Wales and Western Australia are currently considering laws to prohibit lottery betting services being offered to persons in their respective jurisdictions. Labor has undertaken extensive consultation on these issues and considered these arguments carefully. There are arguments for and against banning synthetic lottery products. After extensive stakeholder consultation and on balance, Labor believes it is appropriate to support the bill to ban lottery betting in Australia.

I want to turn to the issue of Commonwealth jurisdiction. While the states and territories have made some moves, as I've described, it is the Commonwealth that has responsibility for online gambling matters. The Commonwealth is best placed to implement a national position in relation to lottery betting services in Australia. This will be consistent with the National Consumer Protection Framework, harm minimisation measures across all states and territories and the new credit betting prohibition in the IGA that came into effect on 17 February this year. The ACMA would be responsible for compliance and can respond to any complaints about lottery betting services being provided by either Australian or international operators. The intent of the Interactive Gambling Act 2001 is to minimise the scope of problem gambling in Australia. Lottery draws are permitted under the IGA as there have traditionally been only a small number of draws conducted each week—some seven draws conducted across a week, typically, with a day's break in between. On the contrary, lottery betting services allow consumers to bet on the outcome of up to 25 lottery draws being conducted around the world each week, with the promise of massive jackpots ranging up in the hundreds of millions of dollars, which could lead to problem and at-risk gambling. While Lottoland, for example, is a disruptor seeking to offer consumers greater choice in gambling products and change the dynamic between Tatts, Tabcorp and retailers like the newsagents and other such outlets, this is not the kind of disruption or choice we seek to promote in our community.

The bill will amend the IGA to prohibit gambling service providers from providing to customers physically present in Australia a service for betting on the outcome of, or a contingency in, Australian and overseas lottery draws, including keno-type lotteries, with the effect of banning synthetic lotteries such as Lottoland. This is not a decision that Labor has taken lightly. Synthetic lotteries allow customers to bet on the outcome of a lottery draw without the need to purchase a ticket in that official lottery draw. Unlike official lottery draws, ticket sales will not cover major payouts. Instead, these are covered by insurance policies. A contingency would include the drawing of a particular number, for example, at a particular position or in a particular sequence. As I said, the bill follows those moves by some states and territories to prohibit betting on the outcome of a lottery and action by the Northern Territory government to prohibit betting on the outcome of an Australian lottery. On balance, Labor supports the bill because it responds to concerns, which we share, that the provision of synthetic lotteries in Australia and the potential expansion of these services in the near future will cause adverse impacts on states and territories, small businesses and consumers.

It should be noted that Lottoland has already undertaken a range of actions to address these concerns and be a responsible corporate participant, and is prosecuting what one may say is an arguable case as a fast-growing but otherwise relatively small disruptor, seeking to increase choice, competition and innovation in the market. However, as I said, on balance, we feel that lottery betting is not the kind of disruption, choice, competition or innovation that Labor seeks to promote as a first-order issue. Further, some measures are subject to investigation by regulators, and there is no assurance that other synthetic lottery providers who enter the market will seek to address those concerns.

I want to speak briefly on the impact on state and territory revenues. I note that state governments have voiced concerns that synthetic lotteries are siphoning tax revenue collections away from community services. Over $1 billion in taxation revenue is currently received from states and territories each year from the sale of tickets in official lottery draws, which contributes to charitable causes and community services. Lottoland is licensed in the Northern Territory. It pays GST and corporate taxes. It supports, as it has asserted, paying state point-of-consumption taxes, and it makes community contributions. Furthermore, Lottoland submits that it does not cannibalise official lotteries, because its product offering has grown the market and it targets a different demographic, and that it is not a big enough player to have had a material impact on revenues.

The explanatory memorandum to the bill concedes there is insufficient data to determine the actual impact of lottery betting on state taxation revenue. Reductions in lottery revenue could be the result of a number of factors, including the growing prevalence of other gambling products, including online wagering services, for example. However, the explanatory memorandum otherwise maintains that any increase towards lottery betting and away from official lotteries would have a negative impact on states and territories funding community and other government supported causes.

I want to talk about why lotteries are special. Here I'd like to reflect on what Labor believes sets lottery betting apart from other forms of online wagering, of which there are a lot. Lotteries are a distinct product. They are heavily regulated and taxed, with around 60 per cent of every dollar invested back into the prize pool, and around 20 per cent going to state revenue. State and territory governments decide whether to issue lottery licences as monopolies. They do so based on analysis done by treasuries to develop what is most sustainable and what is in the best interests of the respective communities involved.

To illustrate, there was the move by the Victorian government to split the lottery licence in 2008, with a licence being awarded to Tatts for major national draw games and another licence being awarded to Intralot for instant scratch games, Keno and some other minor games. The splitting of the licence into two parts within the one market was a first in the Australian lottery industry. Years before expiry, Intralot surrendered their licence in Victoria and Tatts's licence was amended to add instant scratch-its and Keno from February 2015.

The Victorian government has recently gone through a full licensing process and has decided to award a single operator licence to Tatts Tabcorp for 10 years commencing in July 2018. This is clear evidence that governments around the country know that a single operator model appears to be the most effective and best approach to maximising state returns. In 2016 the Queensland government considered whether they should issue two lottery licences. They concluded that it was not in the state's interest, and therefore renewed the monopoly arrangement.

We all know the community benefit derived from monopoly arrangements in lotteries has a long history. In New South Wales, the State Lotteries Office was established in 1930 to provide funding for hospitals during the Depression. Lotteries in New South Wales have been used in part to fund the Sydney Harbour Bridge and the Opera House, and to finance Sydney's successful bid for the 2000 Olympic Games.

In Queensland, Golden Casket originated from a patriotic fund to support war veterans and their families in 1916. The Brisbane women's hospital built in 1938 was completely funded by Golden Casket funding. Since it began, Golden Casket has always played an intrinsic role in helping the Queensland community. It was originally set up to raise funds for veterans of World War I, and the profits went on to fund many worthwhile projects across that state, from hospitals to baby clinics to the Queensland Performing Arts Centre and the Red Cross. Even the Gabba got its lights thanks to Golden Casket. In 1975, profits from Golden Casket were moved to a new cultural capital development fund. The money helped fund an extensive range of state-wide sporting, educational, arts and community projects—everything from the Queensland performing arts complex at South Brisbane to cultural centres in each local authority in Queensland, and even, as I said, the multimillion-dollar lights at the iconic Gabba sporting complex. Today, this legacy continues through programs such as Rainbow Kids and the Golden Casket Foundation and the hundreds of millions of dollars returned to government each year for use in worthwhile community initiatives.

More recently, public lotteries generated $427 million in lottery taxation revenue for Victoria in 2015-16, and will generate approximately $4 billion over the full 10-year licence held by Tabcorp. Public lottery taxation is paid into the consolidated fund, and then to the hospitals and charities fund, and the mental health fund. In Western Australia, Lotterywest provided $265 million in charitable grants in 2016-17, providing vital funding for not-for-profit organisations and local governments to support charitable or benevolent purposes. In Western Australia, more than 30 per cent of revenue—that's $265 million—was poured back into the community in 2016-17 including $121 million for health, $15 million for sport, $15 million for culture and the arts, and $114 million directly invested into 764 not-for-profits and local government authorities. Similarly, in South Australia millions were returned to the community in 2016-17 including over $74 million to the hospitals fund and $140,000 to the recreation and sport fund.

I note that, while online wagering companies may be taxed and may also return funds to state and territory revenue, these are calculated differently and amount to a great deal less than the taxation regime applying to the lotteries I've described. The logic is that by betting on the outcome of a lottery or increasing the number of lotteries, the fundamental product at the core, the lottery, is impacted. It is only by purchasing a ticket on a lotto that the lotto prize pool will grow. Labor acknowledges the logic of the monopoly nature of a lottery in the offline environment, and the potential impact on lottery betting in the online environment.

I want to turn to the impact on small business, which is one of the key concerns that's been raised in this debate. Newsagencies and other small businesses across Australia rely on the commissions from the sales of official lottery tickets. Over $350 million is earned by some 4,000 newsagencies and official lottery agents across Australia. These businesses rely on this commission to earn an income and to cover the costs of running a business. The concern here is that synthetic lottery services entice customers away from these businesses with the promise of substantially higher jackpot amounts, compared to those prizes that can be offered under the official lottery draw. In 2017—and again following consultation with Labor—newsagencies and official lottery agents staged a public campaign, 'Lottoland's gotta go,' raising awareness of the negative financial impacts of lottery betting services. I know that some Labor members received and tabled petitions in support of the 'Lottoland's gotta go' campaign. In return, Lottoland—as is their right—has run a concerted campaign to argue their case for survival as a lottery betting agency. Amongst other things, Lottoland submits that their services do not undermine newsagencies and that this bill in fact will leave newsagents and small businesses worse off and exposed to monopolistic behaviour by Tabcorp. Lottoland has reportedly offered a profit-sharing partnership deal to newsagents to address small business concerns, whereby newsagents receive a share in the sales generated by customers referred to Lottoland. Negotiations, as we understand from reports, are in progress, with the Newsagents Association of NSW & ACT, NANA, and VANA also in the mix.

I note that the explanatory memorandum concedes there is limited data available to quantify the financial impact on small businesses. Retailers operate across various business sectors, including independently owned grocery stores, pharmacies, petrol stations and newsagencies. However, any increase towards lottery betting and away from traditional lottery sales would have a negative impact on small-business revenues. Further, Labor notes that the state gaming regulators are exploring whether the aspects of these proposed partnership deals are in fact legal. Furthermore, Labor notes the concerns of the Australian Hotels Association, which indicated that it would reject any partnership deal with Lottoland and has emphatically asserted that Keno helps hotels support over 50,000 community groups at a grassroots level.

I turn now to the consumer impact. Concerns about state and territory impact and the small-business impact aside, there are also concerns about the impact on consumers. As I stated, in 2017 Labor formally requested that the ACCC undertake an investigation into representations made by companies that offer betting on lottery services, such as Lottoland, given the concerns that they may mislead or deceive consumers into believing they are purchasing a lottery ticket or directly participating in a lottery. The ACCC responded by undertaking to continue to review developments and any complaints received in relation to Lottoland.

Concerns around consumer awareness of whether Lottoland is an official lottery or a lottery betting service remain. This is despite the fact that Lottoland does state on its website that it is a bookmaker and not a lottery operator, and explains the term 'lotto betting' on its website. Official lotteries are heavily regulated to protect consumers—the harm minimisation component being paramount. There are guarantees that prizes are paid out to winners and are funded by the proceeds of lottery sales. Lottery betting services are not subject to the same regulatory regime as official lottery operators and can provide incentives to attract customers, such as paying a premium to guarantee a win rather than having to divide the prize equally between winners.

While the EM acknowledges that to date the department has not been made aware of or received any complaints from consumers who have indicated that winnings have not been paid out by a lottery betting service provider, it notes that the combination of wagering incentives and the offering of higher jackpots at greater frequency by allowing customers to bet on international lotteries would arguably encourage customers to engage with lottery betting services and away from official lottery draws. The intent, as I said, of the IGA is to minimise problem gambling, by limiting access to rapid-style interactive gambling services by Australians. While the act permits lottery draws, only a small number are conducted each week, whereas a much higher number of synthetic lottery draws occur around the world on a weekly basis, with much higher jackpots ranging to hundreds of millions rather than tens of millions, which could, as I said, lead to problem and at-risk gambling. Concerns around consumer awareness of whether Lottoland is an official lottery or a lottery betting service remain. Again, I note that this is despite the fact that Lottoland does state on its website that they are a bookmaker and not a lottery operator.

I reiterate that Labor has long been on record with concerns about the impact of synthetic lotteries like Lottoland on Australian consumers and small businesses. These concerns prompted Labor to consult with a range of stakeholders. Labor has kept a watching brief on these issues for over a year, including the measures I've described that have been or are being considered by individual states and territories. Ultimately, as I said, it's the Commonwealth that has responsibility for online gambling and it's the Commonwealth that's best placed to implement a national framework in relation to lottery betting services. This would be consistent with the national consumer protection framework and the new credit betting system that came into effect in February this year. There is a genuine cause for concern that any increase towards lottery betting will be at the expense of consumers, small businesses, community and other government causes funded by official lotteries.

I want to make it clear in closing that Labor notes that Lottoland is a legitimate service that pays tax in Australia. It is indeed a disrupter seeking to offer consumers greater choice in a gambling product. However, this is not the kind of disruption or choice that Labor seeks to support on this occasion. We also note that Lottoland is not the only provider of lottery betting in Australia. In addition to the number of current providers of lottery betting, we have seen the recent entry of a new player, myLotto24, on the scene. Labor shares concerns about the impact of the growth in lottery betting in Australia, and Labor will not oppose this bill.

Ted O'Brien (Fairfax, Liberal Party) Share this | Link to this | Hansard source

The Interactive Gambling Amendment (Lottery Betting) Bill 2018 is indeed welcomed. A number of members have advocated for it, and I am one of them. I spoke in the House last October about the issues addressed in this bill, and I'm grateful that the government, under the leadership of the communications minister, Senator Mitch Fifield, has responded with this bill that we debate today.

Legal gambling appropriately takes place in Australia, and should only take place, under a social contract. This bill represents a bid to ensure that the terms of that social contract are indeed met by all of the players all of the time. A key aspect of the social contract long employed in this country has been that taxpayers benefit from what is now a $24 billion domestic industry—at least that's the figure from the 2015-16 financial year. There was $24 billion wagered by Australians and, generally, taxpayers benefit. The revenue to the state from all forms of gambling in that 2015-16 year was just short of $6 billion. That's about 10 per cent of their total income via taxes, licence fees, levies and the like. Some of that money goes towards support programs for problem gamblers, but the bulk of it goes to essential services that benefit all taxpayers in the areas of health, education, infrastructure and the like.

Another big beneficiary of well-regulated gambling activity in this country is small business, principally by the sale of lottery tickets. Lotteries are an earner of $350 million-odd a year for some 4,000 newsagents, convenience stores, RSL clubs and the like that hold the appropriate state licence. This is very important income for those businesses. The states' share of lottery related gambling alone is over $1 billion a year.

This is obviously income on a scale that neither governments nor thousands of businesses can afford to lose, but a growing proportion of it indeed is under threat, as yet another impact of the digital age and the new disruptive business models it has spawned takes effect. I refer especially to the business models of companies such as Lottoland, which have in some part prompted this bill.

Lottoland is a self-described international internet bookmaker. It is based in the tax haven of Gibraltar. It pays no taxes or fees here other than an annual fee of half a million dollars to the Northern Territory government, which enables it to operate nationally and which is a fraction of what it would be liable for in various taxes, fees and levies if it were Australian based. Via its online business model, it takes business from Australian small businesses.

Its principal product is the provision of access for Australian punters to what are effectively synthetic tickets in highly lucrative, and therefore highly attractive, overseas lotteries. They are typically significantly larger than anything available here domestically. Here lotteries offer, apart from the occasional larger jackpot, first division prizes of a million or maybe a few million dollars. Occasionally it is $20 million or a bit more when jackpots last for a while. There are overseas lotteries that Lottoland deals in that have first division prizes of half a billion dollars. US PowerBet, which Lottoland offers access to, recently had a top prize of well over $600 million. US Mega Millions is huge by our standards at $166 million. EuroJackpot, which is also offered, was recently offering $85 million. These are, obviously, tantalising sums to Australian punters.

The company now boasts that it has around 650,000 Australian customers, from a worldwide base of over six million, which is extraordinary for a company that did not exist as recently as five years ago. It is a relatively new creature of the internet. The truth is, however, that despite popular misconceptions to the contrary, Lottoland does not, in fact, actually sell you a ticket in those megalotteries. You pick your numbers in exactly the same way as you do here, but Lottoland has no real connection with the organisations running the lotteries. The Lottoland product is, in fact, therefore, synthetic—a simulation, if you like, of the real thing. If you win a minor prize, Lottoland says it will pay you out of the revenue it has raised from selling its products, but it insures itself against the possibility that you might come up with the same set of numbers as the winner of the actual lottery. If in the highly unlikely event that you select the exact same numbers as the winner then Lottoland will call on its insurers to give you the payout, equivalent to what the lottery would pay out had you actually held a real ticket.

This is a heady business model—a model without the guaranteed prize pool of conventional established lotteries, a model that seeks to mimic the real thing, with almost identical marketing material and advertising, designed, one might assume, to confuse the consumer, everyday Australians, who might unwittingly transfer their confidence and product loyalty to this synthetic fake. Add to that, they pay, no doubt, little tax and—who knows?—maybe no tax at all in the country where they're based, the tax haven of Gibraltar. They avoid tax in the countries where they operate, made easy, of course, because they conduct their business online. And they make a lot of money.

The losers in this business model, however, are more than just a majority of punters, whose odds of winning are only a tiny fraction of the already huge odds of winning in a domestic lottery. The states are losers. They miss out on vital income. The Commonwealth misses out on GST. Thousands of small businesses are losing as customers are being lured away from properly regulated conventional products, and this is a very real, a very significant problem. Small business operators in my electorate of Fairfax, and I'm sure in other areas right across this country, are losing an important part of their income stream. They are also suffering from a decline in customer traffic through their stores, which negatively impacts other non-lottery sales as well. Therefore, no part of that social contract that has been the Australian model for gambling for many, many years is being met. The clear danger is that the problem for governments and the problem for small businesses is only going to get bigger and quite exponentially bigger, one would think.

A signpost of note is the extraordinarily rapid growth of Lottoland from a standing start in 2013 to over six million customers globally today, with 650,000 based in Australia alone. Lottoland has, in just five years, soared—soared, indeed, comet-like. Even Lottoland says its business is growing and growing fast, which is a very fair description. It promotes the fact that sales in 2016 were 300 million euros, about A$480 million, just four years after start-up, and it rates as one of the fastest-growing companies in Europe.

Clearly, if the synthetic lottery space were left unregulated, the number of Australians drawn into it would likely grow, and probably grow significantly. In the country with the highest per capita punting population in the world, there is a real likelihood that more Lottolands would sprout up online to employ the same business model and create even worse outcomes for the revenues of our small businesses.

In retrospect, maybe we shouldn't be surprised that this sort of behaviour is occurring. It's perhaps even predictable. But it was really only so in the imagination, certainly not in reality, when the Howard government began paying attention to developing threats posed by online gambling in 2001. This bill amends the Interactive Gambling Act 2001, which was prompted by the increased availability of gambling services that were beginning to emerge via the then relatively young internet. That act banned internet casinos, internet pokies, online scratchies and ball-by-ball sport wagering. More recently, we have outlawed credit betting online, but, at the time when the original act was developed in 2001, and indeed for more than a decade beyond, the sort of issue we now confront via this synthetic lottery business model simply did not exist.

This amending bill adds to the original Howard-era constraints on online gambling, established by that 2001 act, by acknowledging and seeking to regulate recent innovation in this space. This bill effectively prevents any gambling service provider from offering in Australia a platform for the placing, making or receiving of bets on the outcome of Australian or overseas lottery draws—that is, synthetic lotteries. The bill also specifies online betting on the outcome of Keno games—which is also offered, by the way, by Lottoland—as another synthetic lottery variant captured by this legislation. Further, it signifies a delay in the commencement of the bill for six months to allow gambling operators and consumers time to adjust their business and betting practices respectively.

Members of this House will be aware that one of the prompts for this bill was a concerted campaign in support of these changes by the organisations of small businesses most heavily impacted through loss of income. Members may also be aware of a vigorous, well-funded campaign from Lottoland to frustrate this bill, defending what they perceive to be a simple case of innovative disruption, a legitimate business activity, especially in this open era of free trade.

On the free trade argument, I will repeat what I said last October to this parliament when I called for the very action that this bill now delivers. I am not in any sense a protectionist. I have no problem—no problem—with overseas companies. I certainly do not object in principle to market disrupters, and I am very strongly in favour of free trade. However, my problem with the likes of Lottoland is that its business model is based on tax avoidance, and it defies a longstanding social contract in this country relating to gambling. While the veracity of this company in seeking a 12th-hour deal with the very small businesses it previously disregarded is untested, the clear reality is that, by basing itself in a tax haven, Lottoland and those that try to emulate it cheat the Australian taxpayer not simply by accident but by design, and I therefore unashamedly commend this bill to the House.

Matt Keogh (Burt, Australian Labor Party) Share this | Link to this | Hansard source

Deputy Speaker, I'm sure you and many others in this chamber and across Australia have seen ads on TV for Lottoland. It touts itself as the latest market disruptor, advertising jackpots in the hundreds of millions and even into the billions of dollars. It offers the US Powerball's prizes of over $1 billion, the EuroMillions's prizes of several hundred millions of dollars as well as our local lottos. However, it operates more like a bookmaker than a lottery, taking bets on the outcome of the numbers drawn. While large prizes can be won in lotteries, the chances of winning them are extremely slim. For example, and by comparison, you have a one-in-76 million chance of winning division 1 in the Australian Powerball. You are much more likely to be killed by lightning—that's a one-in-1.6 million chance—or die from a venomous bite or sting, which is a one-in-one million chance. It's even harder to be bitten by a shark, but that's another discussion. Even smaller prizes can be harder to win, with a one-in-110 chance that you'll win a division 8 prize in the Australian Powerball. The chances of winning the jackpot prize in an overseas lottery of this nature are miniscule, with the odds usually less than one in 250 million.

Lottoland and its like essentially exist in a gambling loophole here in Australia. On behalf of Australian consumers, small business and the entire community sector, Labor has long been on the record with concerns about the impact of these synthetic lotteries. These concerns prompted Labor to consult with a range of stakeholders for a period of time, including the newsagents' peak body in the lead-up to the launch of Lottoland's Gotta Go! campaign. I have consulted and engaged with my local newsagents in the electorate of Burt. In 2017 Labor also formally requested that the ACCC undertake an investigation into representations made by these companies that offer betting on lottery results, given the concerns that they may mislead or deceive consumers into believing that they are actually purchasing a lottery ticket or directly participating in the lottery that they describe. The ACCC said that it would undertake a continual review of developments and complaints in this area. Labor has maintained a watching brief over that time and we have seen some state and territory governments take their own steps to try and regulate or limit the way in which Lottoland and its like can operate within their jurisdictions. But the reality is that this area needs national regulation, and it is properly the place of the Commonwealth to implement a national ban through its powers in respect of online gambling.

Of course, we've had legislation on interactive gambling since 2001. That does allow online lottery draws, and it has traditionally been the case that there have been only a small number of those conducted each week—typically seven; maybe one a day. Now we've seen that lottery betting services allow consumers to bet on the outcome of up to 25 lottery draws being conducted around the world each week, with the promise of massive jackpots rising up into the hundreds of millions of dollars, which can lead to a problem with at-risk gamblers.

Lottoland seek to be a disrupter and they say that they engage as a competitor to some of our existing lottery providers. They have said that they will engage with the newsagent community to make sure that newsagents are looked after, but the reality could not be further from the truth. I'm sure everyone is aware that, in order to buy a lotto ticket, you go down to your local newsagent or your lotto kiosk. These are genuine, local, small businesses in our community, and they employ quite a few people. If we take away and undermine their opportunity to sell those tickets by allowing people the opportunity to participate in grossly misleading online synthetic lotteries, what will happen? Fewer people who want to purchase lotto tickets will go to their local lottery kiosk or newsagent to buy one there. And whilst they're not doing that, they probably won't buy the daily newspaper as well—they're probably already not doing that.

It will undermine not only that small business but the capacity for those small businesses to provide local jobs. We know that youth unemployment is high right now, particularly in Australia. In the electorate of Burt, in Perth's south-eastern suburbs, it is very high. In some areas youth unemployment is close to 20 per cent. These small businesses employ young people. They also provide jobs for some of the older unemployed people in our country who also find it difficult to find work. So why on earth would we want to undermine that? We don't. That's why Labor and I support this legislation.

Allowing these synthetic lotteries undermines the capacity of state governments to gain revenue and tax revenue from the lotteries that are already running on a domestic basis in this country. I have spent a long period of my life thus far working with the community sector, particularly in Western Australia. In Western Australia, Lotterywest is a huge provider of funding to our community sector, providing millions and millions of dollars in grants, big and small, for capital and seed funding and funding for test programs in the community sector. That funding is vital. The fundamental reason that I have great concern about these synthetic lotteries is that their existence robs Lotterywest and similar schemes around the country of the revenue that they need to enable them to provide those grants that our community sector relies on to be able to replace their computers, to buy a new van, to take disabled children to events around the local community, to provide funding to get a pro bono referral service off the ground in Western Australia—to do all manner of things. Those are but a few examples.

If we continue to allow these synthetic lotteries to exist, the revenue that is available to Lotterywest and to other lotteries around the country will continue to dwindle. Of course, that obligation will fall back in part onto the state and in part onto the Commonwealth, but, at the end of the day, government won't be able to meet that demand. We have set up a system where we have allowed gambling to occur through our lotteries because we gain a community benefit, and that has been a good thing. But allowing these sorts of synthetic lotteries to continue will completely undermine the basis of that system. As some have remarked, buying a lotto ticket is simply a non-tax-deductible way of giving to charity. We want to keep it that way. We want to make sure we protect that. That's why we're opposed, and why I am strongly opposed, to synthetic lotteries. It's why Labor and I are very happy to support this legislation to ban them. It's why I tabled a petition earlier this year from my local newsagents seeking to protect their businesses, protect the jobs of their employees and protect our local community sector to make sure that they are all secure going forward.

When I go back into the community, people often come to me and say, 'Why is it that the government and the opposition can never agree? Why are oppositions always opposing just for the sake of being in opposition?' I can tell you that this is actually a classic example of the opposite. Sometimes I think people regard that as happening too seldom. But the reality is that when good policy frameworks are put forward, when there is a good reason to legislate and when the government gets the legislation right—which doesn't always happen—we do agree. Here is an example where we do and of how we can come to the table and work together across the parliament to make sure that we have legislation that will not only work but provide a community benefit by making sure that we don't undermine small business, don't undermine people's opportunity to get a job and don't undermine our vital community sector within this country.

I know from my involvement with local community groups in my electorate and throughout the state of Western Australia that the grants that are available from revenue that we gain from our domestic lotteries are vital to ensuring that those community groups get support. They support our community as a whole, whether it's because we've got buses to transport people around the community, whether it's because we're able to provide grants to get a seed program off the ground, whether it's because we're able to provide the opportunity for new or upgraded computer software or computer hardware that's required—even just to make sure that you can get some accounting software for our local community groups; it can be that small—or whether it's through the provision of office space for some of our community groups to operate from, such as our local community lotteries houses throughout the state of Western Australia. All of this becomes undermined if we don't have protection for this system.

Some may say that this is nationalistic protectionism, but what it's actually about is protecting all of the things that are important for our community, at all different levels. It's important that we do that. I think it's excellent. I was very happy to see that the government has introduced this legislation, but of course also that Labor is agreeing to this legislation. As I said, newsagents and small business owners who employee people throughout our community come to my office in my electorate and go to state MPs with legitimate concerns. They're looking at what's happening. They're seeing the advertising that I spoke about when I rose. They are worried—legitimately worried—about the ongoing viability of their businesses. It becomes essential that we make sure that we protect them.

Often those on the other side like to say that Labor doesn't like small business and that we don't really care about jobs. This is a classic example of demonstrating the opposite. We, on our side of the chamber, always knew it was true. We are about supporting small business and we are about making sure that we not only protect jobs but create the opportunities for more jobs. This is legislation that we agreed to because it helps that in a vitally important way. That's why we support this legislation. We see the overarching community benefit, despite what some ideologues and economic global purists might say about it being a protectionist measure. At the end of the day, it's about making sure that we have the appropriate regulatory responses to make sure that we contain online gambling—full stop.

It's important that we protect those who are at risk with gambling, but it's also important that we protect small business, we protect jobs and we protect state revenues. I can tell you that, as a Western Australian, state revenues have been a huge problem in recent times. I can wax lyrical about that at another time. It's important that we protect the revenues for the states and it's important that we protect the revenues that provide the grants to allow our community organisations—our grassroots community organisations and our state-wide community organisations—to continue to do the great work in the communities across our country. I'll always stand up to make sure that occurs. That's why I'm very proud that Labor will support this bill.

Nola Marino (Forrest, Liberal Party) Share this | Link to this | Hansard source

I'm very pleased to talk on the Interactive Gambling Amendment (Lottery Betting) Bill 2018 and I'm very pleased to talk in support of small business. So many small businesses exist in my electorate, particularly newsagents. We all know that one of the customs in Australia is to have a punt. That's what Australians call it: having a punt. How often do you hear that, irrespective of whether it was on the battlefields of Gallipoli or the Western Front in World War I, the Birdcage at Flemington, the mounting yard at Royal Randwick or the two-up that we see at local RSLs on Anzac Day right around Australia? The colloquial phrase 'betting on two lizards walking up a wall' can generally be applied right around this great country. The Sydney Opera House, for instance, was funded by a lottery, and that's going back many, many years.

Our traditional lotteries and Keno games are popular and are longstanding recreational gambling products. They are actually an important income stream for thousands and thousands of small businesses. I will stand up for small business in this House every chance I get. This includes our newsagents, pharmacies, pubs, RSLs and community clubs. They provide millions of dollars in tax revenue to every state and territory in Australia and, as we know, help to fund important community services and infrastructure such as hospitals, schools, public transport and roads. Every time a customer buys a ticket in an official lottery draw, a percentage of the ticket price goes towards supporting community services.

Lotteries are also an important part of the income stream for local newsagencies and post office agencies. These are small businesses run by great local people, and they support our local communities all over the country. Whenever a community group, organisation or sporting club—even our service clubs and emergency services groups, which do such a great job—needs a sponsorship or prize for something they're doing, perhaps a local raffle, where do they go in small communities? They go to those fantastic local small businesses like Broadwater News in Busselton; Minninup Forum Newsagency; Donnybrook Newsagency; Capel Newsagency; Dalyellup News and Lotteries; and the Centrepoint newsagencies. These are all places where you can buy a lottery pack, maybe for Mother's Day, which is coming up, and where perhaps your grandmother or someone who loves scratchies goes, perhaps even lodging a set of numbers for a work Lotto syndicate. This is all part of what Australians do.

Official lotteries and keno games have been a part of the Australian product landscape in gambling for a long time and are well accepted and well understood by consumers. They know what they're getting. They know what they're buying and they make a conscious decision. In contrast, betting services like Lottoland are relatively new and less understood. They provide no benefits to the thousands of small business owners across Australia—those newsagencies—and no benefits to our local communities, particularly in rural and regional areas like my own.

Another issue with these forms of gambling is the light regulation that's imposed on these services. They can and do entice customers away from traditional lotteries, and this further impacts on the benefits to small businesses and the community more generally. Many Australians have voiced their concerns about these services. There are more than 4,000 newsagents and lottery retailers Australia-wide, and they depend on the sales of actual, real, well-regulated lottery products. Those products can generate between 50 and sometimes 70 per cent of their income, so we're not talking about a small proportion of their income stream. The viability of these businesses is really critical. Because of their online structure—Lottoland is based overseas, in Gibraltar, I understand—none of those Australian state or territory taxes are paid, unlike our real lotteries, which contribute over $1.1 billion each year. We see so many newsagencies that are part and parcel of that.

I've received a number of petitions signed by people in my electorate who are concerned about the impacts. I've got so many pages of petitions from people in my community who share the concerns. They want to be able to walk down to their local newsagency and buy their tickets or get their scratchie—whatever they choose to do—and they want those businesses to still be there for them. In particular, a lot of our senior citizens love going and having that quiet little dabble, often each week. Recently I was at Centrepoint newsagency. They've got a 'lucky buddha' with coins across him, and I saw the amount of people who were rubbing their Lotto tickets across the buddha because they wanted the luck that went with it. Of course, that is what happens in a small, local, community newsagency.

The government has listened to all of the people who have signed these petitions. It has listened very carefully. Last year, Minister Fifield raised these concerns with the Chief Minister of the Northern Territory. The Northern Territory is so far the only jurisdiction to licence this form of lottery betting. The Northern Territory government has responded by introducing what is only a partial prohibition on this lottery betting, and the implication of this is that the betting can't be offered on Australian lotteries. This was a positive step, but the government believes stronger and more comprehensive action is required, which is what we see in this bill. And this bill, the Interactive Gambling Amendment (Lottery Betting) Bill 2018, will take decisive action. I can say to the newsagents who are watching and listening to this debate, those in my electorate in the south-west of Western Australia, that the government is taking decisive action. We understand your small business. We will amend the Interactive Gambling Act 2001 and prohibit the provision of lottery and keno betting services to Australians.

As I said previously, traditional lotteries are heavily regulated and pay a considerable amount of tax to all states and territories. For every lottery ticket sold in those newsagencies and outlets, up to 28 per cent is allocated to state and territory taxes. Not only does that support the regulatory oversight and government services; but nine per cent is paid to the agents for relevant sale costs and income requirements. That's the heart and soul of these small businesses, and that's what this bill is about as well. An estimated $1.1 billion in state and territory taxes in 2016-17 is what has been and is at risk, plus those small businesses that add so much to our small communities. Over $350 million is earned by those 4,000 newsagencies and official lottery agencies—the official lottery agencies—across Australia, from sales of an official lottery product. You're buying a ticket, you're buying a product, you're buying a scratchie. Newsagents, as we know, actually rely on this to run their businesses. This is a big part of their business.

The additional keno services that are offered in clubs and hotels also help support community services and sporting initiatives. It can be, as we know with Lotterywest in Western Australia, that they support so many small community groups. A number of times I have been to events where I have seen that one of the sponsors whose logo is on the sign, the pamphlet, the program or the advertising material is Lotterywest. This means they have contributed. I have seen how good that is and how important that is to so many groups and organisations. In Western Australia, Lotterywest support things such as supply costs, lease costs, administration and operating costs, travel costs and capital costs sometimes, depending on the project—all sorts of different projects. They want to make the community a better place. It's the funding that comes from people buying official lottery products that funds this for small communities. So, any time this is diminished, the whole of our Australian community suffers. Everyone in this place would want to grow our communities and support our communities and know that when they buy that ticket that that's exactly what they're doing.

In direct comparison, lottery and keno betting services contribute significantly less tax and to only one jurisdiction in Australia. They don't pay commissions to small businesses at all. They are domiciled in overseas tax havens and minimise their exposure to domestic regulation. It's a deliberate decision. I understand that Lottoland has 650,000 Australian customers. So this is having a direct impact on each of our small businesses, our newsagencies. Lottoland doesn't actually sell you a ticket; you're betting on the outcome. This is really important. This will have an impact on Australian based lotteries. It certainly has an impact on small businesses. So this legislation is really important.

Lottery betting services aren't required to comply with the guaranteed prize pool model. Instead their major prizes are covered by insurance policies, and that allows lottery betting service providers to offer bigger prizes, more frequently, which further impacts on the financial benefits of traditional lotteries. Those bigger prizes are used to entice new gamblers, who aren't actually always aware of the difference between the two types of lottery products. They're not even aware of the protections and the benefits to the community provided by the products that are offered through the newsagencies and official outlets.

This act will also minimise the scope of problem gambling in Australia by limiting the types of interactive gambling services to Australians. Lottery betting services allow customers to bet on the outcome of up to 25 lottery draws being conducted around the world each week with the promise of massive jackpots up to hundreds of millions, which can lead to even more problem gambling by at-risk people. This bill will prohibit the provision of lottery and keno betting services to customers physically present in Australia. It will also prohibit the betting on a contingency that may or may not happen in the course of the conduct of a lottery, to ensure that bets cannot be accepted on the outcome or any aspect of a lottery or keno draw. The Commonwealth is responsible for online gambling matters and is best placed to implement a national position in relation to lottery betting services in Australia. Nationally consistent laws in this area are important. The government has really responded to the concerns of the community and has acted accordingly.

These amendments will also enable ACMA, the Australian Communications and Media Authority, to enforce compliance, which is good, and to respond to any complaints about lottery betting services being provided by other Australian or international operators, which is good as well. The government recently expanded ACMA's powers to take stronger action against the provision of illegal interactive gambling services to Australians.

Many Australians enjoy lotteries and keno as a recreational activity. If you go to a lot of clubs around the country you'll see the screens, and if you go to newsagencies you'll see the scratchies and the lotto signs. The government is absolutely committed to ensuring that online gambling takes place under a robust legislative framework with very strong consumer protections and within the boundaries of community standards. As I said when I started, I am always pleased to stand in this place and support Australian small businesses. They employ nearly half of Australians. Often those same newsagencies give young people their first job, and often they give people at a mature stage of their life potentially their last job. As small businesses, they are critical to the Australian economy and they're critical to our small communities, and I am always going to stand up for small business, as this government does in this country. I commend this bill to the House.

Milton Dick (Oxley, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak on the Interactive Gambling Amendment (Lottery Betting) Bill 2018. Today I stand with my Labor colleagues to draw a line in the sand to give greater protections to Australian businesses and consumers when it comes to synthetic lotteries. Labor has long been on the record with concerns about the impact of synthetic lotteries such as Lottoland and, in particular, their contribution towards problem gambling, which is something I want to highlight in the House today.

When it comes to per capita spending, Australians are the world's most prolific gamblers, losing more money per person than people in any other developed country. Australians spend an average of $1,300 per capita on gambling, with the next highest being Singaporeans, at around $600 per capita. This is a growing problem and one we must all take very seriously as it reaches out to more and more people.

Synthetic lotteries only contribute further to this epidemic. Total gambling expenditure in Australia has increased by 7.7 per cent, from $21 billion in 2013-14 to $22.7 billion in 2014-15, while per-adult gambling expenditure has increased from $1,171 to $1,300 in the same period. Numbers like these were part of the reason that Labor consulted with a wide range of stakeholders, including the newsagents peak body, in the lead-up to the launch of the Lottoland's Gotta Go! campaign, in consideration of this bill.

Lottery-type games, such as Powerball or Oz Lotto, are already the most prevalent forms of gambling, with over 30 per cent of Australians participating. For many, this is a social activity, with the occasional dollar spent on having a go on the weekly lotto, but for some, this is quickly becoming an addiction. Studies have already proven that pathological gamblers are at an increased risk of developing stress-related conditions such as hypertension, sleep deprivation, cardiovascular disease and peptic ulcer disease. We know that people can quickly become engulfed by this addiction, and we must ensure all practical steps are in place to keep people from falling into this trap.

In 2017, Labor formally requested that the ACCC undertake an investigation into representations made by companies that offer betting on lottery results. Mr Speaker, I seek leave to continue my remarks at a later date.

Leave granted; debate adjourned.