Australia - Digital Media - Gaming and Gambling (Historic)

Synopsis

With the convergence of telecoms, media and IT we saw the arrival of digital media. Digital media has seen some industries diminish while it also has spawned the growth of new industries and seen others expand. In this report we focus on one of the key applications. New video applications are emerging as the internet media companies seek to exploit the added speed and capacity that the National Broadband Network (NBN) broadband infrastructure will provide. As speed and capacity increase and uptake by consumers and businesses we will see a whole new range of applications be entering the market over the next decade.

In one of the applications – gaming, we have seen console games change dramatically, with games, music and movies merging, integrating and moving online. Growing penetration of broadband and mobile broadband networks will also promote further growth in online gaming. Online gaming and gambling can take players from outside the boundaries of their home countries where these online activities may or may not be sanctioned by the authorities. The global market is and expanding one where virtual online gaming and virtual online gambling is a growth market.

By 2013 retail sales of video and console games sales have reduced as further stores close there are now many alternative and cheaper outlets for gaming downloads. Now electronic gambling is taking a major share of the player money market and in this report we show some trends in this market area. The Interactive Gambling Act was reviewed in 2012 and there are now recommendations that may see some guidelines released in 2013/14. In this report we provide information and analysis and an overview of digital media developments in online gaming and gambling along with survey results with some statistics provided throughout the text and in tabular formats.

Key developments:

Electronic gaming machines, interactive gaming, video games, mobile users of online gambling and gaming increasing as smartphone penetration increases, R18+ games now approved for classification in all states of Australia .

Companied covered in this report include:

Optus, Tabcorp, Sportingbet, FOXTEL, Sky Racing, Australasian Gaming Council, IEAA, Betfair, IGEA, Facebook.

The Department of Broadband, Communications and the Digital Economy has released an interim report into the review of the Interactive Gambling Act 2001 (IGA) for public consultation. The review into the IGA is the first since 2004.

The review proposes a number of changes to the IGA, including:

• Introducing a national standard for harm minimisation and consumer protection;
• Strengthening enforcement and deterrence measures against overseas unlicensed online gambling providers;
• Increasing awareness among consumers about the risks of using unlicensed gambling providers;
• Establishing a trial of online tournament poker in Australia, subject to a strict regulatory framework and a requirement that participating providers cease providing higher risk gambling services to Australians, like online slot machines;
• Prohibiting micro-betting (such as ball-by-ball bets in cricket or point-by-point bets in tennis) across all platforms; and
• Requiring that any form of 'in-the-run' wagering, on any platform, be approved by the relevant state regulator and the national sports governing body.

The Government will not make any decisions about possible changes to the IGA until they have had further public consultation with interested parties.

In preparing the interim report, the Department has engaged closely with community and counselling organisations, states and territories, sporting organisations, gambling organisations, financial institutions, broadcasters and gambling researchers. They have also considered submissions from the general public.

According to research the States and Territories are relying on gambling taxes as on average about 10% of state revenues came from gambling in 2009/10. Other notable facts from research include:

• Gambling is a common recreational pursuit – around 70% of Australians participated in some form of gambling in the past year.
• Gambling takes many forms, including Lotto and ‘scratchies’, electronic gaming machines (EGMs – the ‘pokies’), table games (like roulette and blackjack), wagering and the nascent, but rapidly growing, online gaming.
• Gambling is a large industry – total Australian gambling revenue in 2008/09 was just over $19 billion and the share of household consumption was 3.1%. In 2004/05 it was about $15.5 billion.
• The structure of the industry has changed, with the gaming machine and casino share of spending rising from around 40% in 1986/87 to around 75% in 2006/07.
• EGMs are the dominant source of gambling revenue (despite the fact that most Australians do not play them at all).
• State tax revenue from gambling was $5 billion in 2008/09 (or 10% of all state tax revenue), with Victoria having the highest tax dependence (13%), and Western Australia the lowest (4%).
• Between 80,000 and 160,000 Australian adults experience significant problems resulting from their gambling (0.5-1.0% of adults) and a further 230,000 to 350,000 experience moderate risks.
• Around 600,000 Australians (4% of the adult population) play gaming machines at least weekly. Around 15% of these regular players are ‘problem gamblers’. Their share of total spending on machines is estimated to be around 40%.
• Over 80,000 people are employed in the industry, the majority in the clubs, pubs hospitality industries.

Table 2 – The ascendency of gaming machines – 1986/87 - 2008/09

(Source: Productivity Commission – Gambling Report 2010)

Table 3 – Gambling revenue by ‘Official’ sector – 2009

(Source: Productivity Commission – Gambling Report 2010)