Snapshot: Remote Gambling in Australia

Australia (June 2, 2023)

Remote gambling

Types

Is remote gambling permitted and, if so, what types?

Under the Interactive Gambling Act 2001 (IGA), there is a general prohibition on the supply and advertising of online gambling services to persons present in Australia, unless the service is a regulated interactive gambling service and a regulatory authority in an Australian jurisdiction licenses the gambling service provider.

Regulated interactive gambling services include online sports betting, wagering and lotteries. Online casino gaming, poker and other gaming services are generally prohibited in Australia. Lottery betting is also prohibited in Australia after legislation making this type of betting activity illegal came into effect in January 2019. Generally, licensed operators may offer remote or online gambling services without any distinction between online platforms or devices (eg, mobiles or tablets) on which the gambling service is offered to customers.

Licensing

What are the criteria for obtaining a licence to operate remote gambling?

The applicable criteria for obtaining a remote gambling licence depend on the type of licence (and the type of gambling service to be provided) and the jurisdiction in which the licence is sought. For simplicity (even though online lottery licences may be available), we have focused on the criteria required to obtain a sports bookmaking licence.

Generally, to obtain a licence, applicants must be a corporate entity registered in Australia under the Corporations Act 2001 (Cth) and must demonstrate financial viability and sustainability (of both the company and shareholders), provide a clear business plan for conducting business in Australia, and meet certain probity and suitability criteria to the satisfaction of the relevant licensing authority.

How do the licensing criteria for remote gambling operators differ from those applicable to land-based operators?

Generally, the licensing criteria for remote gambling operators is the same as for land-based operators, although a higher burden of proof is generally expected of land-based gambling operators as a result of the exclusivity awarded.

Cross-border gambling

May operators located in other countries offer internet gambling to consumers in your jurisdiction without obtaining a licence there?

The IGA strictly prohibits the provision of any online or remote gambling services to residents in Australia unless the operator holds a licence to provide those services granted by a regulatory authority in an Australian jurisdiction. Any provision of offshore internet gambling is an offence under the IGA.

Since November 2019, the Australian Communications and Media Authority (ACMA) has instituted a process under which illegal offshore online gambling operators are blocked from providing services to persons located in Australia. The ACMA often requests that Australian internet service providers block websites of offshore online gambling operators considered to be operating illegally in Australia. This measure has gone further than originally contemplated since, although it was meant to be implemented solely against offshore online gambling providers (namely, providers of offshore wagering or casino-style services), it is now being applied to websites associated with illegal offshore online gambling providers (such as affiliates). The ACMA maintains a list of illegal gambling websites that have been blocked.

May operators licensed in your jurisdiction offer internet gambling to consumers in other countries?

The IGA contains a prohibition on the provision of online gambling services to residents in specified overseas jurisdictions. However, to date, no countries have been specified on this list of prohibited countries. As a matter of Australian law, Australian licensed operators can provide their services to consumers in other countries but will need to consider the extent to which local laws may be applicable. For example, an Australian licensed operator will still need to obtain a remote gambling licence from the UK Gambling Commission if it offers its services to UK customers.

Taxes

What tax rate applies to each form of remote gambling?

General Australian taxation requirements apply, including the requirement to pay corporate tax where an enterprise is being carried on. Rates vary but the current corporate tax rate is between 25 per cent and 30 per cent, depending on the size of the enterprise and what activities are carried on. Other taxes include a goods and services tax of 10 per cent on net gambling income, and state payroll tax (which may be payable in respect of payments to employees and contractors). The rate of state payroll tax varies from state to state and is subject to certain thresholds. The annual payroll tax thresholds in place for New South Wales, Queensland and Victoria, for example, are A$1.2 million, A$1.3 million and A$650,000, respectively.

Remote gambling operators are also required to pay gambling taxes calculated as a percentage of revenue (as set out in licence conditions and legislation, enforced by the relevant licensing authority). In all states and territories, except for the Northern Territory, a point of consumption tax is payable by online wagering operators as a percentage of the gambling revenue derived from customers located in the specific jurisdiction. Increases to the point of consumption tax in New South Wales and the Australian Capital Territory took effect on 1 July 2022. Victoria also introduced a new law on 15 April 2022 that requires Australian licensed keno operators to pay point of consumption tax on their net revenue from players located in Victoria.

Wagering operators accepting bets on sporting and racing events are also required to pay product fees charged by the relevant controlling bodies for the use of race field and sports fixture information.

By: Brodie Campbell, Jamie Nettleton and Sophie Batey

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Sources: Addisons – Lexology.