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Online Gambling in Australia

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The country that brought the world its first highly regulated online casino has officially made the site off limits to the majority of its customers. To no one's surprise, the Senate voted yesterday in favor of passing the Interactive Gambling Bill, a piece of legislation that imposes crippling limitations on where Australian gambling sites can offer their services. The bill, introduced last December, six months into a moratorium on the expansion of online gambling in Australia, was passed by a 33-28 vote.

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In a nutshell, the new law mandates that online casinos licensed in Australia cannot accept bets from people located within any country that considers online gambling to be illegal. Internet lottery, sports betting and horseracing services received exemptions. The original version of the bill would have prevented casino sites only from taking on customers in Australia. The amended version that passed, however, states that Australia-licensed online casinos cannot offer their services to players in any country that doesn't want its residents betting online. The United States, where there have been strong efforts to ban Internet gambling for the past five years, is expected to request such a status.

The bottom line is simple: Lasseters Online, Australia's only licensed Internet casino, is about to become off limits to U.S. bettors as well as bettors in all other countries that are not Internet gambling-friendly. The passage of the law is bad news for the customers who will be shut out, as Australia's Internet gambling regulations are universally known as the strictest out there. The rules Down Under were drawn up with a very heavy emphasis on player protection. To earn an online casino license, a company must undergo a very detailed process of background checks. Additionally, its software is to be tested extensively for fairness and subjected to periodic audits even after the license is granted. Further, there are a number of restrictions in place to curb underage gambling and compulsive gambling.

Australia's state governments began building a framework for consumer-safe Internet gambling in the mid nineties. But in late 1999, the federal government, in recognition of the country's alarming number of problem gamblers, began to sour on Internet gambling. Then in May 2000, the government halted the expansion of Internet gambling in Australia by imposing a one-year, nationwide moratorium.

Lasseters casino in the Northern Territory launched Lasseters Online, Australia's first state-licensed online casino, in April 1999. Last year three additional online casinos--two based in Queensland and one based in Tasmania--were launched. All three were shut down, however, when the moratorium was made official. That left Lasseters as the country's lone Internet casino.

The newly passed law is as devastating to Lasseters as it is to consumers. Last week, before the bill was amended to block players from other countries, the company released a statement revealing that only 37 of its 160,000-plus players are located in Australia. Of the remaining international customers, a heavy majority of them are in the United States.

With the new law in effect, it's questionable whether the casino will be able to continue operating in the black, but they won't go down without a fight. "Our understanding is we may have a claim for compensation under a High Court challenge," Peter Bridge, the online casino's managing director, said. "It may also be subject to action through the World Trade Organization given it restricts our right to trade." Thus, the war may have just begun.

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