Hidden Enemies
IAG: Thanks for speaking with us Creina. What is ACMA’s role in gambling regulation and how does ACMA set its regulatory strategy and priorities?
Creina Chapman: The ACMA has a diverse role in regulating online gambling. We enforce the Interactive Gambling Act 2001 (IGA), which prohibits a range of interactive gambling services from being offered or advertised to Australians. This includes online casinos, slots, poker and wagering services that don’t hold an Australian license. While we don’t license operators under the IGA – that’s a state and territory responsibility – we can take action against Australian-licensed wagering services if they contravene the IGA by providing credit or in-play sports betting.
Importantly, our role under the IGA also encompasses responsibility for a new national self-exclusion register called BetStop, which will allow Australians to exclude themselves from all licensed online and phone betting services in Australia. This will be a significant new consumer safeguard.
We also regulate gambling advertising on broadcast and internet platforms shown in conjunction with live sport. This primarily includes overseeing compliance with rules about when gambling advertising can and cannot be shown. Additional restrictions exist on commercial free-to-air television and SBS, limiting the broadcast of gambling advertisements at specified times during G-rated programs and programs principally directed at children.
A key driver for our enforcement activities will focus on level of harm. Each year, the ACMA targets key areas for improved industry compliance. These annual compliance priorities focus on areas of significant public interest or issues causing negative impacts on the community, including consumer harm. We seek feedback from stakeholders in developing these priorities. In previous years, we have focused on illegal online casinos that target Australians and affiliate marketing services that promote and direct Australian consumers to illegal offshore gambling services. In 2022-2023, the ACMA is focusing on establishing BetStop to support Australians to self-exclude from online and phone gambling. Once BetStop launches, we will enforce the new rules for online and phone gambling providers.
IAG: How has your approach to disrupting illegal online gambling evolved and how much does your work leverage collaboration with international regulators?
CC: The fluid and evolving environment in which we operate means we need to take a flexible, agile and multi-faceted approach to be effective in minimizing harm to the Australian community. We target enforcement action, including by frequent website blocking, ongoing monitoring, continuing consumer education and engagement with industry and regulatory agencies.
International collaboration is essential to effectively regulate in this dynamic online environment. We engage with gambling regulators and government agencies in a range of key jurisdictions, including the United Kingdom, New Jersey, Isle of Man, Malta and the Netherlands, and we use this network to share information and experiences and assist in our enforcement and disruption efforts against illegal services. We continue to explore further opportunities for regulatory collaboration and disruption options.
There has also been a heightened focus on collaboration on the domestic front, including with state and territory gambling regulators and other federal government agencies as we are seeing an increase in complaints about illegal activity occurring within Australia.
IAG: What are some of ACMA’s key initiatives and outcomes and how do you measure impact and success?
CC: As noted above, we take a multi-pronged approach to combat illegal offshore gambling. This includes investigation and enforcement activities, engagement with industry and regulators, and consumer education. One key initiative is the disruption of illegal services by requesting participating Australian Internet Service Providers (ISPs) to block access to their website, as well as any mirror sites that are established to circumvent the blocks. We look at a number of factors to assess the effectiveness of this activity and our impact on the offshore gambling market more broadly. These include the number of offshore sites that have withdrawn from the Australian market due to ACMA investigation and enforcement action, the amount of Australian traffic to a contravening website once it has been blocked at the request of the ACMA, as well as estimates of Australian offshore gambling activity provided by data intelligence providers such as H2 Gambling Capital. We have seen a significant disruption in illegal services, with over 180 illegal gambling sites and affiliate websites withdrawing from the Australian market since we started enforcing the IGA in 2017. Since November 2019, over 650 illegal gambling websites have been blocked by ISPs at the ACMA’s request. So far, we have observed a majority of services having a significant reduction in Australian traffic to the blocked websites, even where the services seek to circumvent the blocks. Our consumer awareness campaigns on digital platforms have been successful in raising awareness and highlighting the risks consumers face when using illegal and unlicensed gambling services.
The ACMA also regularly uses its social media platforms to provide educational messaging, particularly during major sporting events where there is a high focus on gambling, including the Australian Open, football finals and spring racing carnival.
IAG: What are some of the challenges ACMA faces and where are the opportunities?
CC: Enforcing Australian laws against companies operating in a dynamic digital market is challenging, particularly where they are based offshore.
The providers of services are able to operate under high levels of anonymity. We have seen some operators remove corporate and licensing information from service websites and hide their identity by having their website domain privacy protected or otherwise anonymized. This makes it extremely difficult to identify ownership.
The digital environment also enables services to change their digital footprints quickly and often to avoid enforcement actions, including circumventing website blocks by launching mirror sites, and for consumers to access blocked sites through the use of virtual private networks (VPNs) and other tools.
There are also jurisdictional challenges, as many of the illegal services that the ACMA investigates are based overseas in jurisdictions with minimal, if any, regulatory oversight. This presents challenges particularly for enforcement, which can be complex and time consuming. Consequently, the ACMA has largely focused on disruption as the most effective and efficient strategy for minimizing harm to the Australian community, as well as targeted education and collaboration with other regulators. We continue to look for further opportunities.
IAG: As ACMA’s detection and enforcement against illegal gambling operators has evolved, have the operators’ strategies to target and offer gambling products to Australians also evolved?
CC: Illegal operators continue to find new and innovative ways to market their products to Australian consumers. Many illegal operators continue to use Australian imagery on their webpages to convince consumers they are based here and, therefore, offered legally. This is a common strategy and can lead consumers to inadvertently use prohibited or unlicensed online gambling services. It is also common for illegal operators to align themselves to affiliate services, which appear to provide independent reviews of the illegal services, with direct links to the sites. More recently, we have seen the use of social media and streaming services becoming popular ways for affiliates to target gamblers. This raises an additional concern as these types of services provide a dynamic and accessible platform for influencers and are typically accessed by younger demographics.
In addition, some operators have moved towards the use of facilities outside of the traditional banking and payment-processing environments, which provides a further opportunity for providers of illegal services to mask their identity and creates additional challenges in the ACMA’s investigations. The use of cryptocurrency, in particular, is outside the traditional banking and payment processing environments, and the ACMA is not able to readily identify the party associated with the cryptocurrency wallet receiving the deposit. This contrasts to credit card deposits where we receive receipt information identifying the legal entity receiving the deposits.
IAG: When it comes to illegal or unregulated gambling operators, where are you seeing the most issues arise and what harm is involved? For example, online casinos, online sports betting, eSports betting, online lotteries. What do you expect to become the next ‘big’ threat as we move into 2023 and beyond?
CC: Our experience is online casino services pose the highest risk to Australian consumers. Consumers consistently raise issues about poor treatment using these types of services, including unfair play, non-payment of winnings, inability to contact the operator and little or no regulatory oversight. Illegal services use strategies aimed at convincing Australians that they are reputable and well-regulated, using tactics like publishing testimonials by “Australian customers” which refer to big wins, fast withdrawals and excellent customer service to draw customers in. Notably, we have seen an increase in the delivery of these services via apps and social media platforms used to market them. Our digital advertising campaigns are aimed at raising the awareness of consumers to the risks of using these sites.
While it is a dynamic market and we are seeing new types of services being offered to Australians, such as those being delivered on a virtual platform using Blockchain technology, we anticipate online casino services (including online poker) will continue to cause the greatest harm to Australian consumers – although the way these services are being promoted and delivered, as well as deposit methods offered, continues to evolve.
IAG: Turning to your own experience, you bring a depth of commercial and government knowledge to ACMA including senior experience in the news and media sector. Regulators are sometimes criticised for lacking experience and understanding about industry and commercial matters generally, which can lead to blunt policy outcomes and stifling innovation. How has your industry and government experience assisted you to navigate more nuanced policy and positioned you to contribute to ACMA’s role and outcomes?
CC: My experience across the policy making and the media and news sectors has been invaluable in my role at the ACMA. To our work crafting and enforcing regulation I have aimed to bring insight into, and appreciation of, both the strategic and the day-to-day activities and pressures of regulated businesses. As regulated industries understand all too well, managing and enforcing regulation often involves a natural friction between the regulator and the regulated. While regulation and the requirements on regulated industries may be unwelcome, seeking to successfully achieve the policy objectives of regulation involves a good understanding of how the industry operates. Regulation must work for policy makers and consumers and also for the industry. If made and enforced in a vacuum it may well struggle to succeed in the short and the long run.
IAG: ACMA is speaking at the Regulating the Game 2023 Sydney program in March along with other leading regulators including AUSTRAC. What are ACMA’s priorities in the gambling space over the next year and how can engagement with partner regulators and industry support better outcomes?
CC: Successfully implementing BetStop is a priority for the agency. It is a critical consumer safeguard that will make a real difference for Australians that are experiencing, or at risk of experiencing, gambling harm. We expect to have more to say about the launch timeframe soon.
Following the launch of BetStop, we will be monitoring industry’s compliance with the law. The ACMA expects that wagering providers will comply with their BetStop obligations from the day that the service is operational. Where we see non-compliance, we will investigate and take action.
The layered approach to gambling regulation in Australia means that collaboration with government partners is essential. BetStop is part of the National Consumer Protection Framework for online wagering, which is a joint commitment between Commonwealth, state and territory governments. Our engagement with these partner regulators will continue once BetStop is operational, including around intelligence sharing, to maximize the benefit that this important consumer safeguard will provide.
