Straight Up – The $1.6 billion grey cloud on Australia’s wagering landscape

In this edition:

• ACMA’s offshore headache – As Australian wagering declines, the grey market continues to boom
• Irish bookie makes move on Ladbrokes outlets
• Sportsbet fined $92,500 for marketing to excluded customers
• PointsBet predicts annual revenue will hit target

In the 10 years since the federal government released its Review of Illegal Offshore Wagering, the amount of money spent by Australian punters through unregulated overseas providers has risen at least four-fold.

In 2017, the Interactive Gambling Act, which regulates the wagering industry, was given additional powers to prevent overseas operators from targeting Australian customers. At that point, the ‘unregulated’ market was estimated to be worth $400 million a year.

In 2023, that grey market had grown to $1.6 billion, or 15 per cent of the locally regulated market, according to the Australian Communications and Media Authority.          

Figures on how much money is spent on these grey market overseas sites are very much an estimate. But given the explosion of the profile of these operators, two of which have, we can project that it is worth much more today than it was a couple of years ago.

Many of these operators are based in jurisdictions which make it close to impossible for Australian authorities to do little more than issue a warning letter or block domains. It takes little effort for them to rise again under another name and brand.

They primarily offer casino, slots and lottery products and often utilise cryptocurrency. They also offer sportsbook services, with a 2022 study by the Asian Racing Confederation revealing 74 per cent of the ones it looked at offered markets on Australian racing.

These companies do not pay product fees or taxes, nor do they comply with the self-exclusion and other consumer protection measures which ACMA and other authorities demand of Australian-licensed operators.  

This grey market is often utilised by locally regulated bookmakers, including their lobby group Responsible Wagering Australia, as an international ‘bogeyman’ and cautionary tale against the ‘dangers of overregulation’.

There are large doses of self-interest at play in that argument but given how ubiquitous the major unregulated brands are becoming, and the current trend of wagering in Australia, it is reasonable to raise the question of what can be done to address the issue.

Regulators are certainly putting more focus on compliance on the regulated market.

In the last couple of months, ACMA has handed out $6.5 million in fines to major bookmakers over breaches of laws regarding either self-exclusion, spam, or both.

Recently Sportsbet were fined $92,500 by the Northern Territory Racing And Wagering Commission for contacting self-excluded customers, an error it blamed on a training issue.

Australia’s big bookies are big companies and are rightfully held to a high standard when it comes to compliance. But there is a growing frustration that not all wagering operators are being treated equally.

Entain is currently in the middle of a major compliance issue with AUSTRAC. Ahead of a pending Federal Court case, there have been a host of major executive departures from the company, while its medium-term future in the Australian market is a source of some conjecture.

Entain holds an estimated 17 per cent of the Australian market. Reports this week out of Ireland suggest it may be reconsidering its foothold there.

Thanks for reading Straight Up’s weekly wagering column. If you would like us to cover a topic, let us know via editor@thestraight.com.au.

Regards

Bren O’Brien

Managing Editor and Founder

The Straight