Australian online gambling could bring in tax dollars

Internationally respected business services firm KPMG reports on internet gambling Downunder

Unless the Australian Government relaxes its rules on internet gambling, more people will gamble on overseas sites, potentially placing them at risk, and leading to Australia missing out on tens of millions of dollars in potential tax revenues, concludes an interesting new report released by the internationally respected business services group KPMG.

iTWire reports that KPMG’s Anthony Travers, partner in charge of the Australian gaming industry practice, said that governments around the world are now rethinking their opposition to online gambling.

The federal government ban on most online gambling in the land Downunder could see the government missing out on substantial tax revenues that a more enlightened approach to online gambling could deliver, is the point made by KPMG's report titled "Online Gambling, a gamble or a sure-bet?"

The study quotes figures suggesting that A$790 million was spent on overseas online gambling sites by Aussies in 2008.

If Australia maintains the status quo, and continues to rely on the Interactive Gambling Act 2001; “That figure we’ve quoted for underground gambling will increase,” Travers told iTWire. “The local market will miss out and we will miss out on the tax from that activity.”

In addition there would be scant protection for people using the overseas sites, especially problem gamblers, he warned.

The federal government in Australia is currently considering the Productivity Commission’s final report on gambling ( see previous InfoPowa reports), the final findings of which have yet to be made public.

In its draft report released last October, the Commission noted that the online gambling ban is not working, with Australians increasingly gambling abroad on sites with minimal consumer protection. The Commission proposed what it described as “managed liberalisation” which would involve allowing online gaming as long as stringent harm minimisation measures were also introduced.

According to the Productivity Commission’s draft report Australians spend A$18 billion a year on gambling – two thirds of it being fed into poker machines. On top of that is the A$790 million that KPMG suggests is now being channelled to overseas online gambling sites.

Travers told iTWire that although online gambling was largely outlawed in Australia, the ban was not actively policed, and he was unaware of any actions being taken against Australians using overseas gambling sites or companies offering such services.

Like the Productivity Commission, Travers believes that opening the market to strictly controlled, local online gaming sites could provide better protection for users of the services, particularly problem gamblers.

Internationally, KPMG’s report quotes statistics suggesting that the global online gambling market is currently worth more than US$21 billion, and is tipped to rise to US$30 billion in future.

“A lot has changed since 2001. Prohibition does not work,” said Travers, pointing out that technology has moved on apace, and the rise of mobile internet access, coupled with growing enthusiasm for online game playing on social networking sites such as Facebook, means that the opportunity for online gambling services is rising rapidly.

“We expect to see the regions relax, with appropriate controls put in place,” said Travers, “and we expect further growth.”

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