A gaming venue Licence, as well as a permit/Licence for each gaming machine, is required to operate gaming machines in Australia. The only exception to this is in relation to a casino operator Licence, which typically includes permission to operate gaming machines within the casino. Learn whether online casino gambling is legal in Australia, as well as whether taxes apply. And wants to licence overseas providers itself, but the players have no part in the legal battle.

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However, obtaining a license does not mean that any country will now welcome a new operator because the legal systems of some countries (almost all of the US states, Poland, France and others) forbid online casino games, in whole or in part. Moreover, local legal regulations may be inconsistent, and a country which had no issues with online casinos before may enact a law that blocks the activity of gambling sites on its soil. For example, until February 2017, Australia was being a favored place for online casinos of all stripes since the Australians were considered to gamble the most, spending about $8 billion a year according to a research made by Australasian Gaming Expo in 2018. This huge amount of money was going to foreign casinos bypassing the local budget. The new legal system, in particular Interactive Gambling Amendment Act 2017, prohibited the work of foreign casinos without a special Australian license, resulting in lots of gambling businesses leaving the country.

A gambling license enhances players’ trust and address concerns about slots “rigged” RTP (Return To Player) percent and non-payment of big winnings. The reason is that a licensed casino regularly has its random numbers generator audited, and a compliance certificate is given based on the results of the examination. Generally, gambling websites have licensing info in a footer, and experienced players at their first visit always scroll down to see the jurisdiction where the site was licensed.

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Online casino owners face a difficult choice of a reliable jurisdiction, which provides licenses that are valid in many countries. As of today, the choice is not rich, and gambling business owners undergo licensing in one of the following countries and territories:

Curacao

The advantages of this small Caribbean island are zero percent tax on casino profits, fast licensing process (usually about 1.5-2 months) and low ongoing expenses. A casino owner has to place computing power (servers) in the Curacao territory. Online gambling industry forms a great part of the island’s budget, which is why Curacao has such an appealing tax system.

Kahnawake

Canada is famous for its very tolerant attitude towards gambling in terms of legislation. In 1996, Kahnawake Gaming Commission was created, which, among other things, provides licenses for online casinos. The first annual license fee is $40,000, software inspection costs $15,000 and annual license renewal fee is $10,000.

Malta

Malta Gaming Authority provides two types of licenses (B2B and B2C) for a period of five years. Those operators who obtained a prestigious Maltese license are on the UK Gambling Commission’s ‘white list’, which allows them to offer their services to British players. The operators have to adhere to a number of requirements, such as filing financial statements, ensuring players’ personal data safety and creating a Responsible Gaming Policy.

The licensing procedure is conducted in several stages: the Authority considers an application—this takes 3-4 weeks—and then the casino obtains a temporary license for a period of six months. After that, based on the results of a thorough analysis, a five-year gambling license is given. In accordance with the new taxation rules, which came into effect on January 1, 2018, online casinos with “B2C – Type 1 Gaming Services” license (slots, board games, live games) pay annual taxes of 1.25% if their profit does not exceed €3.000.000, 1% for a profit of up to €4.500.000, 0.85% for a profit of up to €5.000.000, 0.70% for a profit of up to €7.500.000 and 0.55% for a profit of up to €10.000.000.

Gibraltar

In order to get a Gibraltar license, online casino owners have to prove their financial solvency, provide a business plan and be ready to perform transactions (winnings payouts, players’ credit card data processing) exclusively through Gibraltar’s banks. License holders pay 1% of their annual profit, but no less than £85.000.

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Apart from the jurisdictions above, online casino owners can also obtain a license from the UK, Alderney, Macao, Belgium, Denmark, Isle of Man and some other countries. Getting a license will help a gambling operator to work in compliance with laws and regulations, attracting players by complete transparency, financial transactions safety and fairness of the gambling process. Licensing leads to players’ loyalty. A client of a licensed casino is always sure that every reels’ spin, every blackjack deal is always determined by random number generator system where there is no space for any fraud and software manipulation.

Online gambling was a prosperous grey market in Australia, but everything changed in 2017. The government amended the Interactive Gambling Act (IGA) of 2001 to give the Australian Communications and Media Authority (ACMA) powers to crack down on illegal online casinos.

What the Law Says

Australian online gambling laws are quite clear and straightforward. They clearly state that providing online casino games such as poker, roulette, pokies, blackjack, and craps to Australian residents is illegal. But they remain silent about the legalities of individual players signing up at online casinos licensed in offshore jurisdictions.

The Interactive Gambling Act (IGA) of 2001 states that the following three activities are punishable offences:

• Provide prohibited online gambling services to Australians
• Provide regulated, but unlicensed online gambling services to Australians
• Provide online gambling services based in Australia to residents of designated countries

These laws apply not only to online gambling services in Australia but also in foreign countries, irrespective of whether foreign or Australian firms own them.

The IGA aims to minimize the negative impact of online gambling on residents. But it targets only providers of online gambling services, not their existing or potential customers.

Also, advertising online gambling products and services in Australia is illegal. This applies to all varieties of non-electronic and electronic media, including print media, broadcast services, Internet, hoarding, and billboards.

The Australian government also encourages residents to complain to the ACMA if they notice any illegal gambling activity being advertised or offered in Australia.

Amendments to the IGA of 2001

The Australian government amended the IGA of 2001 to solve the rising problems of problem gambling and overspending at illegal online casinos.

The Interactive Gambling Amendment Act of 2017 prohibits the following:

• Offering prohibited online gambling services to Australians
• Offering regulated but unlicensed online gambling services to Australians
• Offering prohibited online gambling services to residents of designated countries
• Advertising prohibited online gambling services
• Advertising regulated but unlicensed online gambling services

The new law also gives the ACMA the following powers:

• The ACMA can investigate whether a company or individual has been violating the law either on its own or in response to complaints.
• Associations of Internet service providers (ISPs) can develop industry codes. In the absence of such a code or if the industry code is ineffective, the ACMA can create an industry standard.
• The ACMA can bring illegal online gambling sites to the notice of ISPs and direct them to deal with these sites according to procedures established in the industry standard or industry code.

Why did the government find it necessary to amend existing laws?

Existing data from official sources indicate that Australians lose over AU$24 billion every year at offshore online gambling sites. Breaking this down to loss per capita, Australians lose around AU$1,200 per year, which is more than the gambling loss per capita in other countries. This also translates into millions of dollars lost in tax revenue every year.

Latest Developments

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The government has continued to introduce measures to curb the problems of illegal gambling and problem gambling in the country.

In 2019, the government declared that laws would be created to permit residents to self-exclude from all online gambling sites licensed in Australia. This led to the creation of the National Self Exclusion Register, an effective way to minimize the harm caused by online gambling among players.

Self-exclusion is a voluntary procedure that allows players to exclude themselves from online gambling services licensed in their country for three months to an indefinite period.

The National Self Exclusion Register is just one of the measures that Australia introduced in its attempts to reduce problem gambling among residents. It also launched a systemic crackdown on illegal online gambling sites operating from offshore jurisdictions.

In 2019, the ACMA directed ISPs to block prohibited online casinos. The first online casinos to be blocked were Fair Go Casino and Emu Casino as the ACMA had received over 50 complaints about these casinos from players.

The ACMA continued to block offshore online casinos this year too. Recently, it directed ISPs to block AU Slots, GW Casino, Casino Dingo, Joe Fortune Casino, Ignition Casino, Top Bet Casino, Roo Casino, XBet Casino, and Wager Beat Casino as it had received 79 player complaints about these sites.

By blocking illegal offshore online casinos and introducing measures such as the National Self Exclusion Register, the government of Australia hopes to protect residents from the harmful effects of unlicensed gambling.

Dangers of Playing at Unlicensed Online Casinos

The experience of being cheated by an unlicensed online casino is more heartbreaking than that of losing money while gambling at a licensed land-based or online casino.

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The following are some of the dangers of playing at unlicensed online casinos:

• Unlicensed online casinos delay paying out your winnings because they want you to spend your winnings and lose them.
• They do not allow you to withdraw large amounts of money.
• They void your winnings for no particular reasons.
• They either avoid paying large jackpot wins or pay them out in small instalments.
• They use pirated versions of well-known online casino gaming software.
• They gain an unfair advantage over their players by rigging the RNGs.
• Customer support is either delayed or does not exist.
• Bonus terms & conditions are vague and unclear. Or the bonus wagering requirements are unreasonable.
• They charge high fees for withdrawals.
• Your government may block them any time, making it impossible for you to access or retrieve your money.

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Any online casino that does not operate under a license granted in your country of residence is unlicensed. Even if an offshore internet casino claims to have received a license in some other jurisdiction, it will operate according to the regulations of its licensing jurisdiction.

The government of your country has no power over it. The least that your country can do is block your access to it, but it cannot help you to retrieve your lost winnings or deposits.

Read also: Most Popular Australian Online Casino Payment Methods – An Overview.