There are some industries where the risk to customers is, and always will be, very real. Gambling is such an industry. Even the wilfully blind know that some customers take their own lives once gambling has exhausted their financial resources or when the shame of the addiction becomes too much to bear.
It is for that reason that effective consumer protection is necessary. Landmark competition reforms, formulated by Paul Keating in 1997 and signed up to by the states, didn’t lock this in. A national consumer protection framework for gambling was finally adopted in 2018 but it pales in comparison with protections available to consumers in banking, insurance and energy.
This flaw in Australia’s competition policy reforms is the reason why the Northern Territory, despite being home to just more than 1% of all Australians, is also home to most of Australia’s gambling businesses. For 25 years governments of both persuasions in Darwin have rolled out the red carpet, enticing the industry to set up shop and help it boost what is a very small non-government sector. It’s not that Darwin has a better climate or is located close to most customers. The lure is an expectation that the licensing system, overseen by the NT government, is and will remain softer than anywhere else in the country.
In an era of ubiquitous gambling, the one contingency no bookmaker ever offers is if the NT gambling regulator would deregister a gambling company. The reason is simple. It won’t. In prioritising the employment benefits of its lighter regulatory touch, the Darwin mindset is one of looking after the industry by protecting an operating model with healthy margins, not regulating it.
Undercutting customer protection allows Darwin to promote an allegedly progressive business environment. But the jobs in Darwin come at a cost; the additional harm spawned across the nation and the corresponding rise in treatment service costs, inflicts a burden on taxpayers, 99% of whom live outside the territory.
It’s a replica of what Americans have endured since South Dakota’s decision not to limit interest rates on credit cards. Banks quickly flocked to the state allowing them to impose higher rates. This generated higher bank revenue, probably measured in billions of dollars, paid by customers across the country as South Dakota bragged of its economic development smarts.
The NT’s gambling regulation system does not seem to want to consider the economic costs generated by soft touch rules that appear aimed to look after the industry rather than its customers. It has succeeded in its aim of attracting a few jobs and licence fees, while exporting gambling losses to the rest of the country.
A meaningful regulator pursues consumer protection to ensure fair outcomes for customers who have been wronged by the industry’s failure to observe relevant codes of conduct. But up north that approach appears to be the exception rather than the rule.
Take, for example, the case of Ladbrokes being fined $78,000 for massive breaches of the national consumer code but being allowed to retain $715,000 of the misappropriated client money, while the customer serves out a jail term. Or a BetEasy determination that the NT regulator still hasn’t released despite the clock ticking for more than 14 months.
So, what are we to do to plug this serious hole in consumer protection?
Fortuitously, the federal government has before it the late Peta Murphy’s landmark report, which has made a suite of purposeful recommendations that would help civilise the industry. Now is the time for the government to bare its teeth and adopt them in full.
Industry lobbyists will be working overtime to avoid this, parroting vacuous claims of economic development with the same irritating frequency of the despised television advertisements. The industry is seeking a sympathetic ear, desperately keen to retain its fat margins. It will seek to shower our politicians with hospitality and favour, urging them to allow Australians to continue to enjoy a recreation. They will talk about taxation revenue. They will talk about their latest PR buzz on safer gambling, the reincarnated version of the discredited responsible gambling mantras.
The federal government should remember just one thing. Gambling regulation exists not to benefit operators but to protect customers, for the simple but compelling reason that gambling harms people. The deliberate light touch approach in Darwin demonstrates that between them the states and territories have not delivered the effective consumer protection that all Australian gambling customers need and deserve. It provides the Albanese government with a compelling reason to adopt the report’s recommendations. All of them. Especially a national regulator with effective powers and a clear mandate to prevent harm.
Tony Robinson is a former Victorian minister for consumer affairs and gaming
In Australia, Gambling Help Online is available on 1800 858 858. The National Debt Helpline is at 1800 007 007.
Gambling causes too much harm to be left to the NT to regulate. It’s time for a national watchdog
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07.12.2023
There are some industries where the risk to customers is, and always will be, very real. Gambling is such an industry. Even the wilfully blind know that some customers take their own lives once gambling has exhausted their financial resources or when the shame of the addiction becomes too much to bear.
It is for that reason that effective consumer protection is necessary. Landmark competition reforms, formulated by Paul Keating in 1997 and signed up to by the states, didn’t lock this in. A national consumer protection framework for gambling was finally adopted in 2018 but it pales in comparison with protections available to consumers in banking, insurance and energy.
This flaw in Australia’s competition policy reforms is the reason why the Northern Territory, despite being home to just more than 1% of all Australians, is also home to most of Australia’s gambling businesses. For 25 years governments of both persuasions in Darwin have rolled out the red carpet, enticing the industry to set up shop and help it boost what is a very small non-government sector. It’s not that Darwin has a better climate or is located close to most customers. The lure is an expectation that the licensing system, overseen by the NT government, is and........
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