Bet365 Group Limited Submission to the Department of Broadband, Communications and the Digital Economy Interim Report - Review of the Interactive ...
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bet365 Group Limited
Submission to the Department of Broadband,
Communications and the Digital Economy
Interim Report – Review of the Interactive Gambling Act 2001
1Introduction
bet365 welcomes the opportunity to make a submission in response to the Interim Report released
by the Department of Broadband, Communications and the Digital Economy as part of its review of
the Interactive Gambling Act 2001.
bet365 is the largest online sportsbetting operator in the world. We have been operating under a UK
Gambling Commission license since 2007, and have been newly licensed in both Denmark and Spain
in 2012. bet365 has recently been licensed by the Northern Territory Government and will be
commencing operations in Australia shortly.
Executive Summary
bet365 believes that the Interim Report makes some constructive recommendations that should
form the basis for a reform of the IGA and wishes to offer the following key comments:
• Australians are spending an increasing amount on online gambling with an estimated total
expenditure of c. $1,496m, though it is estimated that circa $922m (62%) of this is being
spent on offshore sites offering in-play betting, casino, poker and bingo compared to only
$574m (38%) on Australian licensed sites which can only legally offer pre-game betting.
Offshore sites do not necessarily offer the same levels of consumer protection and harm
minimisation as Australian licensed sites.
• We believe that Australia could benefit from the experience of the two most recent
European countries to completely review their online gambling legislation, being Denmark
and Spain whose new regulations came into force on January 1st and June 5th 2012
respectively. Their models are not identical but are based on the same broad principles
being:
o It is better to regulate, control and tax online gambling rather than ignore it, prohibit
it or attempt to primarily rely on internet site blocking and financial transaction
blocking techniques that just do not work.
o To allow all products including in-play betting, casino and poker (with the exception
of Spain which does not allow online slots).
o To have very high levels of consumer protection and harm minimisation including
pre-commitment deposit limits, self-exclusion at a national level across operators,
Government assistance with identification and over-18 verification, protection of
client funds and so on.
• The IGA reform should adopt a platform neutral approach and should address the current
anomalous situation where, for example, in-play betting is allowed on the telephone and on
a retail kiosk but is not allowed on the internet. The same neutrality principle should also be
applied on what is allowed / not allowed across racing and sports betting.
• With regards to in-play betting, it should be recognised that this is now more popular than
pre-game betting in all of our markets around the world, and, in common with other large
international bookmakers, it represents over 70% of our total betting turnover. If in-play
betting is not allowed, then an increasing number of Australian betting customers will also
have to turn to offshore sites to do what they wish to do.
2• Whilst there is no evidence that any type of in-play betting causes any particular harm, we
will work with the Department’s recommendation that “micro-betting” is not allowed
though would request that the five minute guideline be reduced to two minutes to minimise
confusion on say whether an over of cricket or a game of tennis would be included or
excluded.
• With regards to Gaming, we believe that the proposed trial of Tournament Poker is a
sensible first step as was the case in Italy. We also believe that a trial of Casino Table Games
(i.e. excluding Slots) as a first step is also warranted as was also the case in Italy. For an
online Gaming provider, having at least something in each category that can be offered
legally to Australian customers, even though Tournament Poker and Casino Table Games
would each represent a minority of the demand for those categories, would make it
significantly more attractive to become licensed in Australia.
• With regards to national standards, in general we support a consistent approach across the
States and Territories. As an example, in Australia we have 12 different integrity agreements
with Racing bodies and a further 6 different integrity agreements with Sports bodies. In the
UK there is one body that handles such matters being the Gambling Commission’s Sports
Betting Intelligence Unit (SBIU) which has a highly trained team of people co-ordinating
input from all licensed operators, all sports, the media and the general public. We believe
that this national approach is a far more effective way of handling this important issue.
About bet365
bet365 is a family-owned private company based in Stoke-on-Trent in the UK and commenced
operations in 2001. It offers a very wide range of online sportsbetting and gaming products and has
some 7m customers in over 200 countries around the world. For the financial year 2011/12 it had
GB£646m (c. AU$1b) in revenue and now has over 2,000 employees. bet365 has won numerous
industry awards including Operator of the Year, In-Play Betting Operator of the Year and has been #1
in the eGaming Review Power 50 ranking for the past two years. bet365’s co-founder, Denise
Coates, was awarded a CBE in the Queen’s 2011 New Year Honours List for services to the
community and business.
bet365 has been licensed in the UK since 2001, and by the UK Gambling Commission since 2007 and
therefore adheres to the tight regulations in force in the UK. bet365 has also been licensed to
operate in the Danish market as of 1st January 2012 and in the Spanish market since 5th June 2012.
Interim Report Specific Recommendations
We have commented in some detail below on the specific recommendations in the Interim Report
where we think our international experience being licensed in the UK, Denmark and Spain would be
of value. We have not commented on some Australian specific areas where we have little practical
experience at this time, for example the workings of the ACMA or areas such as the over-promotion
of live odds where Government initiatives are already in motion.
3Recommendation 1:
The IGA should provide for the development of a national standard, applicable to all Australian
licensed interactive gambling providers, that establishes the framework for a minimum set of harm
minimisation and consumer protection measures for all types of interactive gambling that are
permitted by the IGA.
The standard should be developed by a joint working party of Commonwealth, state/territory,
industry, gambling researchers and responsible gambling bodies under the auspices of the COAG
Select Council on Gambling reform.
There should be a clear timeline established for the development and implementation of the
minimum standard.
The minimum standard should be incorporated into state/territory legislation.
States/territories should continue to be responsible for enforcement of harm minimisation and
consumer protection as they are now.
bet365 agrees in general with the need for national minimum standards for harm minimisation and
consumer protection across the States and Territories, and would be pleased to participate in any
joint working party where we can bring our international experience to bear.
We would recommend that any such minimum standards be split into two parts being a)
Wagering/Betting and b) Gaming. The rationale for this is that any Gaming standards may take a
lengthy time to develop as new legislation and regulation has to be developed and complex
questions have to be considered such as whether to permit Australian-only or International liquidity
in Tournament Poker. In-Play betting is already allowed on the telephone and on retail kiosks and
already has existing and proven legislation and regulation in place. Its introduction should not be
unnecessarily delayed waiting on new legislation and regulation for Tournament Poker.
Recommendation 3:
The harm minimisation and consumer protection measures in the proposed minimum standard
should include (but not be limited to):
• standardised and significantly more prominent responsible gambling messages
• tightened rules around the capacity of online gambling providers being able to provide lines
of credit to users—already announced
• limits on the types of betting inducements that can be offered, particularly those that
encourage non-gamblers (that is, people with no existing online gambling account) to open
an account, as well as on the payment of commissions to third parties for encouraging others
to sign up—already announced.
• a pre-commitment capability including in terms of total spend, total time played, number of
bets placed and deposits made—already announced.
• protection of customer funds—already announced
• protection and storage of customer information consistent with Australian privacy principles
4• making data on the uptake and use of harm minimisation and consumer protection
measures (consistent with Australian privacy principles) publicly available for research
purposes
• quick identity verification and age identification of customers when opening a betting
account.
• self-exclusion provisions
• highly-accessible spend-tracking facilities including a very prominent message on
losses/profits incurred to date by the account holder at the point they log in.
• targeted warning messages alerting consumers to gambling behaviour that is indicative of
problem gambling (subject to consultations with vendors of software that may block such
warning messages).
• prominent links to the national gambling helpline available on all pages of the websites of
regulated online gambling service providers, and
• a link on the websites of regulated gambling service providers to the state/territory gambling
regulatory authorities to which a consumers can lodge complaints—state/territory gambling
authorities should report publicly annually on the number and types of complaints made
against each licensed online gambling service provider.
bet365 agrees strongly with the need for responsible gambling and has been adhering to the UK
Gambling Commission’s requirements in this area for some 5 years. These requirements include
many of the suggested areas above including:
• The requirement to hold an account such that there is no anonymous or cash-based betting.
• Pre-commitment by way of deposit limits. These are typically based on daily deposit limits
but can be extended to weekly or monthly deposit limits as required.
• Providing self-exclusion facilities, which we do for a minimum period of 6 months, and
quarterly reporting to the regulator on customers that use this facility.
• Identity and age verification.
• Extensive staff training in problem gambling as well as the links to gambling helplines.
These UK requirements are generally in line with the standards established recently in Denmark and
Spain where we are also licensed. We would however caution against any requirements that are too
onerous for operators or too intrusive for customers as they will simply encourage those
stakeholders to stay out of the regulated market. As an example, Denmark concluded that a 30 day
temporary account period within which customers have to be identity and age verified is
appropriate, and that is with their Government directly providing a national identity database to
assist. If Australia was to conclude on say 72 hours and also not provide such assistance it would
simply result in many customers not being able to get verified in time and instead registering
accounts with offshore sites.
There are other examples in the recommendations above that we also consider onerous, intrusive
and likely counter-productive but the detail of these are perhaps better dealt with by the suggested
COAG joint working party.
5With regards to the provision of credit, it has to be recognised that there is a very important
distinction between the use of credit cards, which are the main way for Australians to shop and use
e-commerce and have spending limits that are pre-approved by financial institutions, and separate
credit facilities.
With regards to the payment of commissions to third parties, it has to be recognised that the great
majority of these, at least in bet365’s case, are to “affiliates” such as sports information sites who
may get a commission but who are perhaps better described as advertising partners. These affiliates
are given no knowledge of who the customer is, and are not involved in any way with the customer
relationship on an ongoing basis. We see no potential harm in these sorts of arrangements.
Recommendation 22:
To test that such an approach would be effective in reducing problem gambling risks, this
amendment to the IGA should be introduced on the basis of a five-year trial where:
• a player can only participate in one tournament at a time with any one regulated provider
• the ‘return to players’ from each tournament should be transparent to players before they
enter the tournament, and
• no television advertising of these services should be permitted other than on programs that
broadcast poker tournaments; all other types of advertising should be permitted subject to
the standard restrictions.
bet365 agrees that a Tournament Poker trial would be a sensible way to start with regulating the
Gaming sector. This approach was also taken in Italy who took a further 2-3 years to introduce Cash
Poker, though it should be noted that the UK, Denmark, Spain and France have all licensed both
forms of Poker from the start.
We would like to comment specifically on the first point ref only participating in one tournament at a
time with each regulated provider as a supposed harm minimisation measure that would likely do
more harm than good. Some Poker Tournaments can be very lengthy and it is normal for even casual
players to play more than one game at a time from the same provider. If customers were prevented
from doing this, this would encourage them to open multiple accounts with different providers,
meaning that they would have multiple pools of pre-commitment deposit limits rather than just one.
If they then decided to self-exclude, they would then have to do this with multiple providers which is
less likely to happen. The recommendation would turn out to be counter-productive. We believe
that the standard harm minimisation measures such as pre-commitment are sufficient to deal with
potential issues.
Recommendation 25:
Because of the greater harm associated with ‘micro-betting’ from a problem gambling perspective,
‘micro-betting’ should be prohibited irrespective of the electronic medium (that is, telephone,
internet, etc.) by which the bets are placed. This ban should also apply to wagering services provided
through other devices and technologies such as smartphone applications and interactive television.
6For the purpose of this recommendation, the following definition of ‘micro-betting’ should be
adopted:
Micro-betting involves the placement of bets having the following characteristics and circumstances:
• the placing, making, receiving or the acceptance of bets on particular events occurs
during a session of a match or game
• the betting opportunity is repetitive, of a high frequency and is part of a structured
component of the match or game (for example, ball-by-ball betting in a game of cricket;
point-by-point betting in tennis)
• a bet is placed on one of a limited number of outcomes, although the number of possible
outcomes may be more than two (for example, whether the next serve will be a fault;
whether the next ball will be a no ball), and
• the time between placing a bet and knowing the outcome is very short (usually less than
five minutes, excepting appeals, intervals and interruptions).
• The minister responsible for administering the IGA be given the power to make
regulations specifying whether a particular bet type is or is not a micro-bet.
bet365 is not aware of any evidence that “micro-betting” causes any greater harm from a problem
gambling perspective, and there is no distinction between micro-betting and other forms of in-play
betting in any other jurisdictions where we are licensed. We are however prepared to work within
this constraint in order to be able to provide online in-play betting. We would however request that
the above definition be changed such that the time between placing a bet and knowing the outcome
is two minutes rather than five minutes. Five minutes is a relatively typical time for an over of cricket
or a game of tennis to last and there should not be any confusion in this area.
Recommendation 27:
The IGA be amended to dovetail its provisions regarding sports wagering with the provisions being
developed by the Minister for Sport to deal with integrity in sports and match fixing:
• no types of sports betting, irrespective of the electronic medium by which the bets are placed
or whether they are pre-event or after the event has started, be permitted unless they have
been authorised by the relevant state/territory regulatory authority and, where appropriate,
the relevant sports controlling body where one exists, and
• for overseas-based sporting events the relevant governing body is the Australian
state/territory regulatory authority in consultation with, where appropriate, the relevant
Australian sports governing body for that sport.
bet365 accepts that the relevant Australian sports controlling bodies wish to have the rights to
authorise what bet types are permitted on the locally held sports under their control, but strongly
believes they should not have any responsibility for bet types on overseas sporting events. That
decision should be clearly left with the State/Territory licensing authority.
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