New laws regulating gambling companies in the Northern Territory will be debated and passed this week.

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But while the NT is Australia’s least populated jurisdiction, these laws will govern betting companies across the country. The reforms have been criticised by anti-gambling experts, and there are allegations that the NT’s regulator of gambling and betting is suffering from “regulatory capture”.

Why do betting companies like the territory?

The NT has become the de facto place for wagering service providers (WSPs) to be based due to its low taxes and fees, according to a federal review of the regulation of the gambling industry that concluded last year.  One submission described the NT’s governance of these companies as a “light touch”.

Overall, 32 sports bookmakers and two betting exchanges — which collectively earn $50 billion a year — are regulated by the NT Racing Commission.

And the NT, with an economy of just $32 billion, affords these companies more freedom than other jurisdictions.

One of those freedoms includes allowing gambling companies to offer inducements such as vouchers and credit to attract customers.

What are the proposed reforms?

The Racing and Wagering Bill 2024 is a proposed legislation to establish the Racing and Wagering Commission by replacing the current NT Racing Commission. The Racing Commission is currently responsible for handling customer complaints related to gambling companies in Australia. Still, under the new bill, this responsibility will be transferred to the newly established commission.

We need to address the proposed changes as soon as possible. It is crucial that we discuss and deliberate on these changes with utmost attention and care. Our input and feedback are valuable in shaping the direction of the proposed changes. Let us focus on this matter and work together towards a positive outcome. this week in the NT parliament, where they are expected to pass, as the government holds a majority. The Labor government of the territory has stated that these reforms will modernise outdated laws.

The new law will require Wagering Service Providers (WSPs) to have a physical presence, such as an office in NT if they intend to be regulated by the territory. Additionally, WSPs may face various offences, including fines of up to $440,000 if they fail to comply with the terms of their license. The NT Civil and Administrative Tribunal can review decisions made by the commission or its director.

The government also plans to introduce a new Racing and Wagering Fund levy, which will tax bookmaker profits. However, the new tax rate is yet to be determined.

What is happening at a federal level?

NT gambling laws are being overhauled. Here’s why reform will have national consequences

It also recommended the banning of inducements, like those allowed in the NT, and phasing out online gambling advertising and sponsorship.

The federal review recommended the regulation of all gambling across Australia be taken away from states and territories and rested with the commonwealth.

The report, published in June 2023, heard that the NT’s regulatory process had been “captured” by the industry and was “light-touch” in its treatment of WSPs. “ There’s more to do and we will be doing more,” he said. Prime Minister Anthony Albanese said he was “examining” the review, and pointed to steps already taken such as tougher rules around advertising, and restricting the use of credit cards for online gambling.

What do stakeholders say?

The peak body for the online wagering industry, Responsible Wagering Australia, said it supported strong sanctions on providers that broke the rules. “ RWA members offer world-leading consumer protections and we support measures by governments that bring other wagering providers up to the standards that our members already operate on,” chief executive Kai Cantwell said.

But the Alliance for Gambling Reform chief executive Carol Bennett said the NT government had watered down its proposed reforms during the consultation process.

Ms Bennett said 28 gambling companies and just one harm-minimisation organisation were consulted over draft laws, and penalties were watered down based on that feedback. She said the federal government urgently needed to step in and take over regulating the industry. 

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