A ban on lottery betting in Australia was approved by parliament last week in a move that Tabcorp and local newsagents have called “a relief.” With this vote, lottery betting sites will be prohibited from taking wagers on the outcomes of lotteries after a six-month waiting period designed to give companies a chance to put an end to their lottery betting services.
Thursday’s vote came after months of mounting tensions between websites that allow customers to bet on the outcomes of lotteries, the actual operators of those lotteries and the newsagent industry.
At issue is the way in which lottery betting sites work. Rather than selling official lottery tickets to drawings held by Tabcorp-owned Tatts lottery drawings, sites such as Lottoland simply let customers wager on the outcome of upcoming drawings. In many cases, Lottoland jackpots actually dwarf the official jackpot.
The lottery betting business model has proven highly disruptive as customers find it convenient to bet online and potentially win even more than buying an official ticket. Money spent at lottery betting sites also goes straight to the operators of those sites rather than to the official lottery.
Australian Communications Minister Mitch Fifield introduced the legislation back in March and said at the time that lottery betting “undermines the longstanding community acceptance of official lottery and keno products.”
Here’s how Fifield put it back in March:
“These products [from the official lottery] enjoy community support as they generate an income stream for small retail businesses and make a significant contribution, through licence fees and taxation, to the provision of public services and infrastructure by state and territory governments.”
Gibraltar-based Lottoland has particularly raised the ire of local gaming companies newsagents and politicians with aggressive marketing tactics and an unapologetic approach to offering a better alternative than the actual lottery.
Case in point:
Lottoland Australia CEO Luke Brill responded to Thursday’s vote with a statement in which he said Lottoland “is here to stay.”
In true Lottoland fashion, Brill was unapologetic and said they plan to continue operating until the ban takes effect in 2019. He went on to say that Lottoland is “well-advanced in looking at other ways we can continue to deliver choice to the 700,000 Australians who have registered with us over the past two years.”
Brill also said this:
“it is a great pity that the Senate did not give due consideration of the unintended consequences the new laws will have – not just on our customers, but on competition and innovation.
“As we have said from the very beginning, the legislation is bad news for Australian newsagents, too, which will now be at the mercy of a huge, money-hungry monopoly in the form of Tatts Group, now owned by Tabcorp.”
Tabcorp CEO David Attenborough saw things differently, of course. In a speech he delivered prior to the vote, he said “the lottery is not there to make oodles of money for the operator. It’s there to drive returns to the community as well, but Lottoland paid zero tax and actually gave nothing back to the Victorian community at all.”
The passage of this legislation is a major win for Tabcorp and the Australian Lottery and Newsagent Association (ALNA), who have been pushing back against Lottoland from almost the moment they entered the Australian market back in 2016.
Lottoland did relent somewhat by putting an end to betting on Australian lotteries months ago, but even that wasn’t enough to satisfy Tabcorp and newsagent industry groups. The new ban will prohibit betting on all lotteries – foreign and domestic. Although Lottoland has vowed to continue operations in Australia, the decision is undoubtedly a major blow to their business model.