The debate surrounding gambling advertising in Australia has intensified, with recent discussions focusing on the potential for a total ban. Amidst these discussions, The Australia Institute has proposed a 2% levy on gambling operators as a means to compensate for the revenue loss that such a ban would entail.
Current Government Stance on Gambling Advertising
Gambling advertising has been a highly debated issue in Australia. Recently, the government has opted against a complete ban on sports betting ads, instead considering a more measured approach involving “frequency caps.” These caps would limit the number of gambling advertisements shown each hour or during live event broadcasts.
The government’s reluctance to impose a blanket ban stems primarily from concerns about the financial impact on broadcasters. In the 2022/23 fiscal year, sports betting companies spent approximately AU$239 million on advertising through various media channels, including free-to-air TV, radio, and online platforms. This revenue is vital for broadcasters, who are facing increasing competition in the media landscape.
The Australia Institute’s Proposal
In response to the potential revenue loss from a ban on gambling ads, The Australia Institute has put forward a proposal to impose a 2% levy on gambling operators.
Revenue Compensation
The Institute suggests that a 1.4% levy could replace the lost advertising revenue. By rounding up to 2%, the additional funds could also help address budget shortfalls faced by public broadcasters like the ABC.
Financial Benefits
The proposed levy would not only compensate media outlets but also provide an opportunity for free-to-air networks to fill advertising slots with other advertisers. This could lead to a revenue boost for these networks while still addressing the issue of gambling advertising.
Impact on Offshore Operators
A total ban on local gambling advertising may not effectively mitigate the influence of offshore gaming operators. These operators could continue to target Australian consumers through advertising, potentially undermining local regulations. Julian Hoskins from Senet has pointed out that similar prohibitions in other jurisdictions have not always been successful. A more nuanced approach may be necessary to balance the reduction of gambling-related harm with the need to regulate advertising effectively.
Market Access Considerations
Jamie Nettleton from Addisons Law Firm highlights that gambling licenses are designed to provide access to the local market, including the ability to advertise to attract and retain customers. A complete ban on gambling ads could impact how effectively licensed operators can compete and engage with their audience, affecting their market presence and customer base.
New Zealand’s Approach
New Zealand has recently announced a significant shift in its gambling regulation by licensing online casinos for the first time. This move aims to minimize gambling-related harm, support tax collection, and provide consumer protections. Licensed operators in New Zealand will be allowed to advertise but will face strict limits and will be prohibited from sponsoring sports teams or venues. This approach highlights a different strategy that balances regulation with the need to address gambling-related issues effectively.
The proposal from The Australia Institute to implement a 2% levy on gambling operators represents a significant policy suggestion aimed at addressing the financial impact of a potential ban on gambling advertising. While this levy could help replace lost revenue and support public broadcasters, it does not fully address the complexities associated with gambling advertising, including the influence of offshore operators and the implications for market access.