A parliamentary inquiry into online gambling has rejected Senator Nick Xenophon’s Interactive Gambling (Online Transactions) Bill aimed at preventing Australians using offshore betting sites.

The South Australian independent’s bill, which encompasses other measures including bans on live betting during sports events and a crackdown on advertising, did not gain majority support from the Joint Select Committee on Gambling Reform.

Senator Xenophon said his bill would make it possible to cancel a transaction with an operator of an illegal website, so long as the transaction had not been completed.

“This means that a player who gambles on an overseas site and loses money on his or her credit card will be able to suspend or cancel that transaction,?he said when tabling the private member’s bill in June.

“The big challenge in the past was stopping overseas sites offering services to Australia online. The Australian government could not effectively enforce a ban on those sites.

“This bill will most likely lead the sites to ban Australian gamblers, because they know if they lose they won’t pay up.?br />
But the committee found the proposal impractical.

“Electronic transactions involving multiple parties are conducted in a matter of seconds, making a request to suspend or cancel them unfeasible,?it said.

“The committee majority also has concerns about the inherent element of moral hazard. Allowing gamblers to bet large amounts of money, knowing that if they lose they can request a reversal of the transaction, may well lead to greater risk-taking and more reckless gambling behaviour.?br />
An alternative proposal for the government to provide a blacklist of illegal gambling merchants, suggested by Australian Bankers?Association chief executive Steven Munchenberg, was also rejected.

Mr Munchenberg said financial institutions could block transactions to electronic identity numbers of blacklisted merchants, in the same way banks already block transactions with organisations known to be involved in terrorism, organised crime and money-laundering activities.

But the committee majority said it wasn’t worth pursuing such a scheme.

“Setting up a system to monitor and block financial transactions in order to deter people from accessing overseas-based gambling websites would never be completely effective,?it said.

“Those customers most determined to circumvent the system would be likely to do so using other methods.

“We note the difficulty in gaining cooperation from international financial intermediaries such as PayPal to comply with a system introduced under Australian law.

“Given the limited effectiveness of current enforcement mechanisms to prevent Australians accessing online gambling websites, we believe a total ban cannot be achieved and devoting additional resources to keep track of changing merchant identity numbers on a blacklist would not be worth the expense and effort.?br />
In summary, the committee majority said, “we do not support the introduction of any form of financial transactions or payment controls. We recommend (Xenophon’s) bill not be passed?

Is Australia waking up to the fact that it's impossible to police and control the internet? Do they now realise that people will gamble online if they want and Australia could earn millions in tax dollars if they allowed people to play at safe, secure and regulated Australian sites?