2013 Bookmakers Forum

The 2013 bookmakers forum was held in June 2013. It identified 12 matters to be addressed.

1. Account holder identification

Forum attendees discussed the potential for speedier account holder identification. It was considered that verification of the identity could be reduced from the current 90 days to 45 days although comment was made that a longer period for overseas clients may be advisable.

Outcome

The forum determined that further comment on this issue would be sought from licensed sports bookmakers and that following this input the Racing Commission would frame a proposal to be included in licence conditions for ID verification of less than 90 days. This proposal would be circulated to sports bookmakers for further comment.

2. Mandatory and voluntary pre commitment limits

Most sports bookmakers voiced the view that any account holder pre commitment limits should be enabled during the account establishment. There was also a view that there could be a mandatory requirement to either identify a pre commitment amount or exclude any pre commitment, as defaults in establishing an account, for example, a mandatory requirement for a client to consider whether or not they wished to limit future wagers.

Outcome

There was no determined outcome from the forum although the matter was left open for further discussion and input by sports bookmakers.

3. Self exclusion and problem gambler database

The general utility of a problem gambler database available to all Northern Territory licensed sports bookmakers and inclusive of self excluded persons was canvassed. Issues to be considered would include privacy matters, the need to develop a central database and provision for its maintenance.

Hamish Davidson of Generation Web undertook to investigate the development of a centralised database which would require regular information updates from licensed sports bookmakers and Licensing NT division of the Northern Territory Department of Business.

Outcome

This matter is to be further assessed with submissions sought from licensed sports bookmakers and Licensing NT division of the Northern Territory Department of Business on operational aspects and a legal path forward for the development and use of such a database.

4. Definition of affiliates

The forum discussed the requirement of the Racing and Betting Act for the Racing Commission to approve affiliates, profit sharing arrangements and agreements whereby a party derives a benefit from an arrangement with a licensed entity.

During the forum the Racing Commission members outlined the resourcing implication of approving all such commercial arrangements entered into. It was observed that the business models for sports bookmakers differed and some were reliant on arrangements with affiliates in the conduct of their business.

The need for a common or better understanding of affiliates, white labels and commission agents etc was agreed upon, noting there would be differences in affiliate arrangements and white label models adopted by sports bookmakers.

It was noted that the current scope of the legislation could extend the requirement for the Racing Commission to approve lease arrangements where landlords derive a benefit from leasing contracts and similar arrangements.

A number of sports bookmakers present offered to make submission on the definition of affiliates, inclusive of affiliate models which ought to be the subject of Racing Commission approval under the Act.

Outcome

The forum agreed that sports bookmakers wishing to make submission on the definition and scope of affiliates would provide submissions following the forum. The Racing Commission would then assess the degree of capture of such entities and whether the Racing Commission had the capacity to undertake due diligence or probity checks in order to grant approval of such arrangements. Sports bookmakers are to provide initial submissions on this matter.

5. Requirement to advise of legal action

Currently under the terms and conditions of sports bookmaker licences there is a requirement to notify the Racing Commission should there be any legal action instigated against a sports bookmaker and associated entities or any legal action instigated by a sports bookmaker or associated entities.

The forum discussed that this was an onerous requirement for both sports bookmakers in terms of lodgement burden and for the Racing Commission in resourcing monitoring. For companies with overseas ownership this arguably presents a requirement of informing of international legal action which may have little or no impact on the Northern Territory licensee.

There was also discussion of establishing a minimum amount for reporting purposes to avoid reporting requirements for small monetary matters. It was noted that there may be some validity in restricting reporting to Australian entities and Australian licences.

Outcome

The forum agreed that sports bookmakers would come back to the Racing Commission with practical suggestions over reporting requirements for incorporation in all licences. This could include monetary limits with exclusions of requirements below such a limit and exclusion of other dispute issues such as employee disputes, property leasing matters and other non gambling or non regulatory matters. Submissions were also invited on the issue of how to deal with owned licences that have overseas parent companies.

6. Minimum bet rule

There was discussion on the risk models employed as part of the business plans of licensed sports bookmakers and whether it was appropriate for the licensing authority and regulator to prescribe minimum bets for sports bookmakers. This issue was also linked during discussions with the right of sports bookmakers to close accounts or close client ability to bet on fixed odds where a sports bookmaker has assessed there is a risk to their profitability or operations from unrestricted wagers on fixed odds by identified account holders.

The Racing Commission advised that it had received many complaints over the closure of accounts or closure of account holder’s ability to wager on fixed odds. The Racing Commission aired the view that it was a matter for the sports bookmaker to determine who they wished to have as clients for fixed odds and Pari-muteul wagering purposes.

Outcome

The Racing Commission has advised that it will formally consider the proposal to abolish the Minimum Bet Rule at the next scheduled full Racing Commission meeting.

7. Licence conditions

It was observed that licensed sports bookmakers did not have identical licence terms and conditions as issued by the Racing Commission. Over time it appears there have been additions and deletions to what were formally standard conditions originally issued by the Racing Commission when commencing the licensing regime in 1992 with the issue of the first sports bookmaker licence.

The general thread of discussions was towards a more standard and consistent set of terms and conditions for all licensed sports bookmakers. It was noted that most current licences are due for renewal in 2015 and that there would be a benefit in having contemporised and standard licence terms and conditions operative if not before the renewal date then to coincide with licence renewals.

A number of specific licence terms and conditions were discussed with questions raised over the need and validity for their inclusion. Sportsbet in this context raised a number of conditions of their licence and it was submitted that they would benefit from review. Such conditions included:

• the requirement for not less than $200 000 to be lodged and maintained as security
• the requirement for a company nominee to be in attendance at the premises for a minimum of 40 hours per week
• the requirement that a company nominee must have the approval of the Racing Commission for 'absences of more than two consecutive days ...';
• other out-dated or anomalous licence requirements outlined by Sportsbet.

Outcome

Following receipt of submissions on a number of the licence terms and conditions before the forum, the Racing Commission will draft for discussion purposes a revised and updated set of standard terms and conditions to reflect current needs and practices for the operation and regulation of licensed sports bookmakers.

8. Location of server

All sports bookmakers under their licence terms and conditions are required to 'ensure all IT and infrastructure used to facilitate the process of betting transactions is to be deployed in the Northern Territory. This includes, but is not limited to; call centre operations, application, database and independent audit log servers.'

Due to frequent disruptions to internet communication and lines, sports bookmakers commonly have backup servers and support in one or more interstate locations as part of their disaster recovery plans.

Also sports bookmakers increasingly utilise iCloud technology for data storage purposes and this new technology needs to be factored into how sports bookmakers operate and the resultant need to design appropriate licence conditions. Discussed at the forum was the possibility of amending this licence condition to allow IT infrastructure to be located outside the Northern Territory without any diminution to staff levels operating in the Northern Territory.

The forum was advised that the presence of IT and employees in the Northern Territory were threshold issues in the overall licensing regime for the Northern Territory.

Outcome

The Racing Commission has agreed to formally receive submissions on this licence condition noting it would not likely be receptive to any licence condition amendments which would lessen staff and office space requirements in the Northern Territory.

9. Racing and sporting integrity

Sports bookmakers and the Australian Wagering Council raised the issue of the National Sports Betting Integrity Model and its implementation into licensing conditions for sports bookmakers operating in the Northern Territory.

While the Federal Government has already undertaken consultations with sports bookmakers and the Wagering Council, it was noted that with any amendment to licence terms and conditions, the Racing and Betting Act 1983 provides for a 28 day consultation period with the affected Licensees.

Outcome

Licensing NT division of the Northern Territory Department of Business will maintain consultation with sports bookmakers over the National Sports Integrity Model.

Prior to any incorporation of the National Sports Betting Integrity Model into Northern Territory licensing terms and conditions there will be a 28 day consultation period entered into by the Racing Commission.

10. Routine compliance audits

The forum was advised of the proposal before the Racing Commission for routine compliance audits to operate but to be based on a minimum financial burden on sports bookmakers and be based also on intelligence or indications of potential compliance failure or identified anomalies. There was an expression of concern amongst the smaller scale licensed sports bookmakers of the potential cost of such an initiative.

Outcome

The Racing Commission is to further consider the proposed course of action in relation to routine compliance audits with the view to minimise costs and to investigate a phased process, where there are indications of compliance failures, leading to a full audit. When the model for such audits is complete the Racing Commission will circulate this model to sports bookmakers for comment.

11. Wagering and betting on underage competitions

The Racing Commission advised the forum that the issue of sports bookmaker betting on underage events had raised community concerns, for example, events where participants are under 18, and raised the ethics and desirability of such betting.

The Racing Commission proposed that there be a prohibition of betting on events restricted to under age competitors. This could include under 18 year of age football and other sporting competitions as well as other competitive events involving and restricted to minors.

It was generally agreed during discussions that sports bookmakers did not wish to frame markets on such events. It was noted that many open age sporting events did include team members under 18 and that betting on the outcome of team sports would not be affected by the presence of underage participants.

Outcome

It was agreed that there be a zero tolerance with regard to betting on underage sporting and other events. The Racing Commission will consider whether this prohibition should be incorporated in revised licensing conditions which in themselves will be subject to further consultation.

12. Non employees in sports bookmaker operational areas

There was discussion of non employees being present in the operational areas of licensed sports bookmakers. The general consensus of discussion was that such persons had no right or authority to be in the operational areas and sports bookmakers were not adverse in having this added to licence conditions.

Outcome

The Racing Commission to draft a zero tolerance policy to non employees being in the operational areas of sports bookmakers for inclusion in licence terms and conditions.