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2019-2020
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
SENATE
INTERACTIVE GAMBLING AMENDMENT (PROHIBITION ON CREDIT CARD
USE) BILL 2020
EXPLANATORY MEMORANDUM
(Circulated by authority of Senator Stirling Griff)
INTERACTIVE GAMBLING AMENDMENT (PROHIBITION ON CREDIT
CARD USE) BILL 2020
OUTLINE
The Interactive Gambling Amendment (Prohibition on Credit Card Use) Bill 2020 aims to
minimise the scope for problem gambling among Australians betting online by amending the
Interactive Gambling Act 2001 (the IGA) to implement a ban on the use of credit cards for
betting using certain regulated interactive gambling services.
The Bill prevents operators of such gambling services from accepting payments by credit
card, either directly or through other payment methods that rely on an underlying credit card.
This is consistent with a similar ban in the UK that came into effect on 14 April 2020.
The Bill creates a criminal offence and corresponding civil penalty provision for a person
who accepts, facilitates or promotes credit card payment in connection with an online bet. A
separate contravention is committed for each day the contravention continues.
The Bill allows for a transition period of six months before the prohibition comes into effect,
to allow wagering operators and consumers to adjust their business and betting practices. This
six-month transition period is consistent with the transition period that was provided with the
introduction in 2017 of the prohibition on operators providing credit to customers in section
15C of the IGA.
The Australian Communications and Media Authority (the ACMA) will be responsible for
enforcement of the prohibition. The ACMA will undertake a statutory review after three
years from commencement of the new provisions. A report will be tabled in Parliament by
the Minister and published on the ACMA website.
It is well known that Australians are by far the world's biggest losers when it comes to
gambling losses per capita. Australians lost nearly $25 billion in 2017-18 a five per cent
increase from the previous year.
Whilst pokies losses still outweigh the losses from sports and race betting, those sports and
race betting losses have been increasing. Sports betting losses increased by 16.3 per cent and
race betting losses increased by 7.1 per cent in 2017-18, fueled by heavy advertising and the
ease and growth of online betting.
The pandemic crisis has only served to further exacerbate the scourge of gambling addiction
at a time of heightened stress, anxiety and depression for vulnerable Australians - all
stressors for people experiencing gambling harm.
Online bookies reported large revenue increases during the three months from April to the
end of June 2020 as well as an increase in share prices since the global outbreak of COVID-
19.
The Australian Institute of Criminology Statistical Bulletin report (No.27) published in June
2020 found the proportion of online gamblers who had increased their spending grew from
March (20 per cent) to April (33 per cent).
Currently in Australia credit cards can be used when gambling online but credit cards cannot
be used for offline gambling in a licensed gambling venue or casino. There should be no
distinction.
Other jurisdictions such as the United Kingdom banned the use of credit cards for both online
(and offline) betting on 14 April 2020.
Research shows that people who experience severe gambling harm are far more likely to
gamble more money than they can afford, use credit cards to do so and access credit card
funds early. The effect is to accelerate the speed and extent to which a person gambles
beyond their means.
There is evidence that being in debt compounds harms created by gambling - it often serves
as a driver for people to chase their losses and gamble more, which leads to a vicious cycle of
more debt and more harm.
A ban on the use of credit cards for online gambling would significantly reduce the extent of
harm to people who are vulnerable to gambling harm.
The harms associated with gambling are well known - they can have an impact on social
relationships, family relationships, work performance and physical and mental health. This is
in addition to financial stress, loss of creditworthiness, chronic high interest debt,
homelessness, crime and suicide.
People who experience gambling harm are heavy users of credit cards. The Productivity
Commission's 2010 inquiry into gambling found that people who identified as problem
gamblers were four times more likely to use credit cards to obtain cash to gamble than those
in the still problematic category of low-risk gamblers.
At the time, online gambling was in its infancy and the Productivity Commission was
cautious about banning credit cards for online gambling. The evidence linking credit with
harm is now much starker and only heightened during this pandemic crisis.
The use of credit cards enables immediate and easy access to credit - allowing people to
gamble with money they do not have and often cannot pay back.
Removing credit cards from an environment of constant incentives to bet will make a positive
contribution to reduce gambling harm and the risk of gambling harm.
NOTES ON CLAUSES
Clause 1: Short Title
1. Clause 1 is a formal provision specifying the short title of the Bill.
Clause 2: Commencement
2. Clause 2 provides for the commencement of the Act the day after the end of the
period of 6 months beginning on the day after Royal Assent. This delayed
commencement is intended to provide affected gambling service providers and
consumers time to prepare for the introduction of the proposed prohibition.
Clause 3: Schedules
3. Clause 3 provides that each Act specified in a Schedule to this Act is amended or
repealed as set out in the applicable items in the Schedule. Any other item in a
Schedule to this Act has effect according to its terms.
Schedule 1 - Amendments
Interactive Gambling Act 2001
Item 1 - Section 3
4. Item 1 amends section 3, the simplified outline of the Act, with the insertion of
paragraph (cb) which stipulates that credit card payments must not be accepted from
customers of certain interactive wagering services.
Items 2 and 3 - Subparagraph 15C(1)(b)(ii) and paragraph 15C(3)(b)
5. Item 2 amends subparagraph 15C(1)(b)(ii), and item 3 amends subparagraph
15C(3)(b), to remove the exception relating to independently issued credit cards to the
prohibition of the provision of credit by omitting "other than" and substituting
"including".
Item 4 - After Part 2B
6. Item 4 inserts a new Part 2C into the Act, prohibiting credit card payments from being
accepted from customers of certain interactive wagering services and requiring the
Australian Communications and Media Authority (ACMA) to conduct a statutory
review of the operation of the proposed new Part 2C and related provisions.
7. Proposed new section 15H is the simplified outline for Part 2C.
8. Proposed new section 15J provides a definition of credit card that reflects the
definition in the National Consumer Credit Protection Act 2009 and a definition of
credit card payment. The definition of credit card payment would cover things like
'e-wallets' or 'digital wallets', reflecting the similar position in the UK ban on credit
card payments for online bets.
Credit card payment by customers of certain interactive wagering services not to be accepted
9. Proposed new section 15K would prohibit providers of regulated interactive gambling
services that are wagering services from accepting credit card payment by customers
or from facilitating or promoting credit card payment in connection with such
services. The prohibition would be subject to offence and civil penalty provisions,
outlined below.
10. Subsection 15K(1) would provide that a person commits an offence if the person
intentionally provides a regulated interactive gambling service that is a wagering
service, and either:
the person accepts, or offers to accept, credit card payment in connection with
the provision of the service to a customer, or prospective customer, who is
physically present in Australia; or
the person facilitates or promotes credit card payment in connection with the
provision of the service to a customer, or prospective customer, who is
physically present in Australia.
The maximum penalty for commission of the offence would be 500 penalty units.
Subsection 15K(2) would provide that a person who contravene subsection 15K(1)
commits a separate offence in respect of each day during which the contravention
continues (i.e. a continuing offence).
11. Subsection 15K(3) would provide for a corresponding civil penalty provision, with a
maximum penalty of 750 penalty units. Subsection 15K(4) would provide that a
person who contravenes subsection 15K(3) commits a separate contravention in
respect of each day during which the contravention continues. The higher penalty
amount in subsection 15K(3) recognises the effect or stigma of the conviction that
would arise if a person were found guilty of committing an offence against subsection
15K(1), in addition to the pecuniary penalty.
12. The maximum penalty for the offence and civil penalty provisions would be 5 times
higher for a body corporate, due to the operation of subsection 4B(3) of the Crimes
Act 1914 and subsection 82(5) of the Regulatory Powers (Standard Provisions) Act
2014 respectively.
13. It is important to note that the credit card payment prohibition applies only to persons
who provide a 'regulated interactive gambling service' (within the meaning of section
8E of the IGA) that is a 'wagering service' (within the meaning of section 4 of the
IGA). It would not apply to regulated interactive gambling services falling within
paragraphs (c) - (f) of the definition of 'gambling service' in section 4 of the IGA,
such as a service for the conduct of a lottery or for the conduct of a game of mixed
chance and skill. It would also not apply to face-to-face betting, which is outside the
scope of the IGA.
14. Proposed subsection 15K(5) would provide that subsections 15K(1) and (3) do not
apply if the person did not know and could not, with reasonable diligence, have
ascertained that the customer or prospective customer in question was physically
present in Australia.
15. The note to this subsection clarifies that, in proceedings for an offence against
subsection 15K(1), the defendant would bear the burden of adducing evidence in
relation to the matters in subsection 15K(5) (the evidential burden), in line with
subsection 13.3(3) of the Criminal Code (contained in the Schedule to the Criminal
Code Act 1995). In proceedings for breach of the equivalent civil penalty provision,
in subsection 15K(3), a person seeking to rely on the exception in subsection 15K(5)
would bear an evidential burden in relation to that matter in accordance with section
96 of the Regulatory Powers (Standard Provisions) Act 2014.
16. It is appropriate for the evidential burden to lie with the defendant in relation to this
exception, as the matters are peculiarly within the knowledge of the defendant (i.e.
what the defendant actually knew or could have ascertained, in their circumstances,
with reasonable diligence).
17. Proposed subsection 15K(6) would provide further guidance to the Court on how it
would be determined (for the purposes of proposed subsection 15K(5)) whether the
person could, with reasonable diligence, have ascertained that the customer or
prospective customer was physically present in Australia. The subsection would
require the following matters to be taken into account:
whether the customer (or prospective customer) was informed that Australian law
prohibits the acceptance of credit card payment from customers who are
physically present in Australia;
whether the person required customers to provide personal details and, if so,
whether those details suggested that the customer was not physically present in
Australia;
whether the person has network data that indicates that customers were physically
present outside Australia when the relevant customer account was opened and
throughout the period when the service was provided to the customer;
any other relevant matters.
18. Proposed subsection 15K(7) would provide that section 15.4 of the Criminal Code
(extended geographical jurisdiction - category D) applies to an offence against
subsection 15K(1). Section 15.4 is an extension of the standard geographical
jurisdiction set out in section 14.1 of the Criminal Code, which would otherwise
apply to the offence. Section 15.4 of the Criminal Code applies the offence provision
to an offence whether or not the conduct, or a result of the conduct, constituting the
alleged offence occurs in Australia. Because it would be possible for offshore
gambling service providers to commit the conduct constituting the offence in
subsection 15K(1) wholly in a foreign country where there may not be a
corresponding offence in force, this extension of jurisdiction is necessary to ensure
the effectiveness of the offence.
Acquisition of property
19. Proposed subsection 15L(1) is a constitutional saving provision, which would provide
that the credit card payment prohibition in section 15K has no effect to the extent (if
any) to which its operation would result in an acquisition of property (within the
meaning of paragraph 51(xxxi) of the Constitution) from a person otherwise than on
just terms.
20. Proposed subsection 15L(2) is a transitional provision designed to ensure that the new
credit card payment prohibition will not prevent gambling service providers from
accepting a credit card payment made before the commencement of the relevant
provisions.
Statutory review
21. Proposed section 15M would require the ACMA to conduct a review of the operation
of Part 2C of the IGA (and the remaining provisions of the IGA, so far as they relate
to that Part).
22. The review would need to be conducted after the end of the 3-year period beginning
from the commencement of section 15M, and must provide for public consultation.
23. The ACMA would be required to give the Minister a report of the review within 6
months and, as soon as practicable afterward, publish it on the ACMA's website. The
Minister would be required to cause copies of the report to be tabled in each House of
the Parliament within 15 sitting days.
Items 5 to 9 - consequential amendments
24. Items 5 to 9 are consequential amendments to integrate the prohibition on accepting
credit card payments in the new Part 2C into the existing provisions of the IGA
relating to complaints, investigations and enforcement powers.
Item 5 - After paragraph 16(ba)
25. Item 5 is a consequential amendment seeking to amend section 16 of the IGA with the
insertion of paragraph (bb), to expand the types of matter about which persons may
complain to the ACMA to include new Part 2C.
Item 6 - After subparagraph 21(1)(a)(iia)
26. Item 6 is a consequential amendment seeking to amend paragraph 21(1)(a) of the IGA
with the insertion of subparagraph (iib), to expand the types of matter about which the
ACMA may investigate to include new Part 2C.
Item 7 - After paragraph 64A(ca)
27. Item 7 is a consequential amendment seeking to expand the scope of section 64A with
the insertion of paragraph (cb), to empower the ACMA to issue a formal warning if a
person contravenes proposed subsection 15K(3).
Item 8 - After paragraph 64C(1)(ca)
28. Item 8 is a consequential amendment seeking to amend subsection 64C(1) with the
insertion of paragraph (cb) so that proposed subsection 15K(3) is to be subject to an
infringement notice under Part 5 of the Regulatory Powers (Standard Provisions) Act
2014. Part 5 of that Act creates a framework for using infringement notices in relation
to provisions in other legislation.
Item 9 - After paragraph 64D(1)(ca)
29. Item 9 is a consequential amendment seeking to amend subsection 64D(1) with the
insertion of paragraph (cb), providing for subsection 15K(3) to be enforceable under
Part 7 of the Regulatory Powers (Standard Provisions) Act 2014. Part 7 of that Act
creates a framework for using injunctions to enforce provisions.
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Interactive Gambling Amendment (Prohibition on Credit Card Use) Bill 2020
This Bill is compatible with the human rights and freedoms recognised or declared in the
international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny)
Act 2011.
Overview of the Bill
The Interactive Gambling Amendment (Prohibition on Credit Card Use) Bill 2020 aims to
minimise the scope for problem gambling among Australians using an interactive gambling
service by amending the Interactive Gambling Act 2001 to implement a ban on the use of
credit cards for betting using certain regulated interactive gambling services.
The Bill creates a criminal offence and corresponding civil penalty provision for a person
who accepts, facilitates or promotes credit card payment in connection with an online bet. A
separate contravention is committed for each day the contravention continues.
Removing credit cards from an environment of constant incentives to bet will make a positive
contribution to reduce gambling harm and the risk of gambling harm.
Human rights implications
The Interactive Gambling Amendment (Prohibition on Credit Card Use) Bill 2020 engages
the following human rights under the International Covenant on Civil and Political Rights
(ICCPR):
right to a fair and public trial or hearing, right to a presumption of innocence, and
minimum guarantees in criminal proceedings - Article 14 of the ICCPR;
New civil and criminal penalties and Article 14 of the ICCPR
Article 14 of the ICCPR recognises a number of rights in relation to criminal proceedings,
including:
the right to a fair and public hearing in criminal and civil proceedings, before a
competent, independent and impartial court of tribunal established by law (Article
14(1));
the right to the presumption of innocence until the prosecution proves a charge
beyond reasonable doubt (Article 14(2));
minimum guarantees in criminal proceedings, such as to be informed promptly and in
detail of charges (Articles 14(3)-(7)).
Item 4 of Schedule 1 to the Interactive Gambling Amendment (Prohibition on Credit Card
Use) Bill 2020 introduces a new criminal offence and civil penalty provision for
contraventions of the Interactive Gambling Act 2001 (IGA) with respect to the prohibition of
credit card use with a regulated interactive gambling service that is a wagering service.
The Bill creates an offence, and corresponding civil penalty provision that fits within the civil
penalty regime enforced by the ACMA, for a person who accepts, facilitates or promotes
credit card payment in connection with an online bet. A separate contravention is committed
for each day the contravention continues.
Items 5 to 9 of Schedule 1 to the Bill would insert provisions to trigger the civil penalty and
enforcement provisions in Parts 4, 5 and 7 of the Regulatory Powers (Standard Provisions)
Act 2014 (RP Act).
The amendments would mean that the ACMA is authorised to apply to a relevant court (in
this case the Federal Court or the Federal Circuit Court) for a civil penalty order requiring a
person to pay the Commonwealth a pecuniary penalty for a contravention of the IGA under
Part 4 of the RP Act.
Under section 82(3) of the RP Act, the relevant court may order a person to pay the
Commonwealth such pecuniary penalty as it determines is appropriate. Subsections 82(5)
and (6) of the RP Act provide for how the amount of the pecuniary penalty in a civil penalty
order is to be determined. The pecuniary penalty must not be more than five time the penalty
specified in the civil penalty provision if the person is a body corporate, or otherwise, not
more than the penalty specified.
The amendments will also enable authorised members of staff of the ACMA to issue an
infringement notice under Part 5 of the RP Act where they believe, on reasonable grounds,
that a civil penalty provision of the IGA has been contravened.
The amendments will also trigger Part 7 of the RP Act to allow the ACMA to apply to the
Federal Court or Federal Circuit Court for an interim injunction or an injunction to restrain a
person from engaging in conduct and/or requiring that person to do a thing in relation to acts
or omissions that would constitute a contravention of the civil penalty provisions in the IGA.
New criminal penalty and Article 14(2)
Article 14(2) provides that everyone charged with a criminal offence shall have the right to
be presumed innocent until proven guilty according to law. This imposes on the prosecution
the burden of proving a criminal charge and guarantees that no guilt can be presumed until
the charge has been proved beyond reasonable doubt.
Item 4 of Schedule 1 to the Bill would engage, but not limit, the rights to a presumption of
innocence under Article 14(2) of the ICCPR.
Offences that contain 'reverse burden' provisions may amount to a limitation on the
presumption of innocence. This includes where an 'evidential' or 'legal burden' defence is
created by expressing a matter to be a defence or an exception to the offence or providing that
the defendant must 'prove' the matter. This is because a defendant's failure to establish an
absence of fault (for example, through a mistake of fact defence) or to discharge a burden of
proof may permit their conviction despite reasonable doubts as to their guilt.
Proposed subsection 15K(5) would create an exception to the new criminal offence and civil
penalty provision in proposed subsections 15K(1) and (3) respectively where a person did not
know, and could not, with reasonable diligence, have ascertained that the customer, or
prospective customer, as the case may be, was physically present in Australia. The note to
subsection 15K(5) provides that, in a case of proceedings for an offence against subsection
15K(1), the defence would bear the evidential burden in relation to the matters in subsection
15K(5).
This means the defendant must raise evidence that his or her conduct fell within the
exception. If the defendant discharges this evidential burden, the prosecution must disprove
the matter beyond reasonable doubt.
Placing the evidential burden on the defendant in this case is appropriate as the matter
required to be established--whether the defendant did not know or could not have
ascertained with reasonable diligence that the customers, or prospective customer, was
physically present in Australia--is a matter peculiarly within the knowledge of the defendant.
The Bill would not otherwise alter the process that would apply to the investigation or
prosecution of the criminal penalty proposed to be inserted by Item 4 as compared to other
offences in the IGA or under Commonwealth law. The quantum of the penalty (500 penalty
units per day the offence continues) is appropriate to the seriousness of the conduct. This
measure does not otherwise engage the rights in Article 14 of the ICCPR and the limitation
therefore is pursuing a legitimate public health objective and is rationally connected to that
objective.
Accordingly, the new criminal offence proposed by Item 4 of Schedule 1 to the Bill is
compatible with Article 14 of the ICCPR.
New civil penalty and Article 14
As outlined above, Article 14 of the ICCPR provides that, in determination of criminal
charges, everyone shall be entitled to a fair and public hearing, a presumption of innocence
and various other minimum rights in relation to criminal offences.
Including civil penalty provisions and triggering the RP Act could engage criminal process
rights if the imposition of civil penalties is classified as 'criminal' under international human
rights law.
A penalty may be 'criminal' for the purposes of the ICCPR even if it is 'civil' under
Australian domestic law.
Determining whether penalties could be considered to be criminal under international human
rights law requires consideration of the classification of the penalty provisions under
Australian domestic law, the nature and purpose of the penalties, and the severity of the
penalties.
In relation to the triggering of Part 4 of the RP Act, the proposed civil penalty provisions in
Item 4 of Schedule 1 to the Bill, specifically proposed subsection 15K(3):
expressly classify the penalty as a civil penalty;
target conduct which as a result of the Bill will also, separately attract a criminal
sanction for the same type of conduct;
create solely pecuniary penalties in the form of a debt payable to the Commonwealth
(see subsections 82(3) and (4) and section 83 of the RP Act);
do not impose criminal liability, and do not lead to the creation of a criminal record;
do not alter the maximum pecuniary penalties that may be imposed by a court
through civil penalty orders under section 82 of the RP Act.
These factors indicate that the penalties proposed to be imposed by the Bill are civil rather
than criminal in nature. Accordingly, the criminal process rights provided for by Article 14 of
the ICCPR are not engaged by the Bill, except to the extent outlined below.
Application of Parts 4, 5 and 7 of the RP Act and Article 14(1)
Article 14(1) of the ICCPR requires that, in the determination of criminal charges, everyone
shall be entitled to a fair and public hearing by a competent, independent and impartial
tribunal established by law. This can also apply to civil proceedings. The right is concerned
with procedural fairness, rather than with the substantive decision of the court or tribunal.
Under section 82 of the RP Act, civil penalty orders can only be granted by a relevant court,
which must consider all relevant matters before determining the amount of the penalty. The
amendments to the IGA made by the Bill would specify that the Federal Court of Australia
and Federal Circuit Court of Australia are the relevant courts for the purposes of enforcement
of the civil penalties in the IGA under the Regulatory Powers Act. Accordingly, the right to a
fair hearing is engaged, but not limited by the triggering of Part 4 of the RP Act.
Section 104 of the RP Act provides that an infringement notice is required to state that the
person may choose not to pay the penalty specified in the notice, and notify them that, if they
do so, proceedings seeking a civil penalty order may be brought against them in a court.
Accordingly, the person must always be advised of the consequences of not paying the
penalty, and of their right to have the matter dealt with by a court. As the person may elect to
have the matter heard by a court, rather than pay the penalty, the right to fair hearing is
engaged, but not limited by the triggering of Part 5 of the RP Act.
Under Part 7 of the RP Act, an injunction can only be granted by a court. Further, a court may
only grant an injunction where a person has engaged, is engaging or is proposing to engage,
in conduct that contravenes a provision of the IGA, or where a person has refused or failed,
or is refusing or failing, or proposing to refuse or fail, to do a thing and that refusal or failure
was, is or would be a contravention of a provision of the IGA. Thus, the right to a fair hearing
is engaged, but not limited, by the triggering of Part 7 of the RP Act.
Accordingly, the amendments in Items 5 to 9 of Schedule 1 to the Bill to apply Parts 4, 5 and
7 of the RP Act are consistent with the human rights in Article 14(1) of the ICCPR.
Conclusion
The Bill is compatible with human rights because. To the extent that it may limit human
rights, those limitations are reasonable, necessary and proportionate.
Senator Stirling Griff