On 1 August 2018, the Minister for Sport, Senator Fiona McKenzie released the report of the sports integrity review led by the Hon. James Wood AO, Q.C (the Report). This review was commissioned in April 2017 to examine threats to the integrity of Australian sports and the arrangements within Australia that deal with those threats.
The Report contained 52 recommendations. The Government has indicated that it will review and respond formally to the recommendations.
Although the Report focussed more broadly on various threats to sports integrity in Australia (and made recommendations concerning the manner in which anti-doping rule violations should be tested and administered), a key point of the Report addressed the threat to sports integrity posed by sports wagering. In doing this, the Report highlighted a considerable number of flaws in Australia’s current regime relating to the regulation of wagering, particularly in connection with sports.
Why is there a need for reform?
Many of the flaws and concerns raised in the Report have been highlighted in a number of our Focus Papers. Among those mentioned in the Report are:
- the inconsistencies in the laws of various States and Territories relating to match fixing;
- the lack of harmonisation in the recognition of sports contributing bodies and the oversight of betting contingencies as a means to promote and enhance sports integrity; and
- the attractiveness of offshore wagering operators in offering betting markets in relation to Australian sports including:
- a wider range of betting contingencies;
- less restrictions on the types of betting that are offered (for example the availability of in-play betting);
- higher payout rates and more competitive wagering markets (as a result of the lower costs and taxes); and
- allowing punters suspended or restricted in Australia to place bets, as well as to place bets on an anonymous basis.
- the interlocking, complex and often inconsistent and repetitive regulatory systems within Australia which result in a costly administrative burden for Australian licensed wagering service providers (WSPs).
Findings and Recommendations of the Report
A number of key themes and recommendations relating to the interaction between sports integrity and wagering in Australia emerge from the Report, including:
- The necessity for Australia to adopt a consistent/national approach towards the regulation of wagering and its relationship to sports.
This involves the establishment of a National Sports Integrity Commission (the Commission) to oversee a new Australian Sports Wagering Scheme (ASWS).
The Commission will have oversight of the regulation of sports wagering in Australia and, in that capacity, will:
- assess the suitability of national sports organisations (NSOs) to have in place product fee integrity agreements;
- assess the suitability of Australian WSPs to offer betting markets on Australian sports; and
- regulate and oversee product fee and integrity agreements between NSOs and WSPs.
- This is a material change from the existing position. Currently, there is limited oversight of these agreements by any government authority with most sports having monopolistic rights over the terms and conditions of those agreements.
This particular measure recommended by the Report will provide a means for the smaller sports and emerging sports (with esports being given as an example) to put in place integrity measures.
- That there be a centralised means by which approved betting contingencies could be determined.
This would represent a significant advantage over the current model where betting contingencies are determined by NSOs, governmental agencies and government licensing authorities leading to considerable differences in the betting markets offered by Australian licensed WSPs.
However, it is not proposed that the Commission would oversee the manner in which suspicious reporting would be dealt with. This would remain a matter to be dealt with by law enforcement authorities.
The proposed regime would apply to sports and not to racing. This would perpetuate the differential treatment in Australia of regulation in relation to racing matters (as compared to sports) – racing remains subject to self-regulation generally with oversight in relation to integrity matters occurring on a State by State basis.
The Report also contemplates the implementation of a National Policy as part of the ASWS.
To the extent that this incorporates the National Consumer Protection Framework, as announced previously by the Government, this will be a ‘move forward’ in achieving a harmonised national framework for the regulation of wagering.
- Match-fixing offences to be introduced at the Federal level.
This will address the inconsistency that exists currently in relation to the treatment of match-fixing as a criminal offence. Some States have introduced laws of this nature (eg NSW), whereas others have not (eg Queensland) - even for those States where laws have been introduced, there are material differences (particularly in respect of definitions, and the scope of the offences).
- The establishment of a National Sports Tribunal.
This Tribunal provide a means for sports to opt in, or opt out of its jurisdiction (as the case may be). The Tribunal will have the power to deal with disputes relating to integrity that may arise within a sport. These disputes may also relate to doping or betting irregularities.
We envisage that the National Sports Tribunal will be utilised primarily by smaller sports – those sports which do not already have arrangements in place to deal with issues of this nature.
In summary, the measures set out in the Report have the objective to ensure that Australia is eligible to become a party to the Macolin Convention (the Council of Europe Convention on the Manipulation of Sports Competitions). This would have the effect of allowing Australia to be involved in global actions seeking to ensure international sports integrity.
In-Play – Should it be permitted?
Interestingly, reference is made in the Report to consideration being given to in-play wagering being permitted to be conducted by Australian licensed wagering operators. The rationale for this policy is to facilitate the monitoring, detection of, and response to, fraud and corruption in sport by ensuring that in-play wagering is regulated in Australia. It also provided a means for the sports to receive returns from the higher revenues generated through in-play wagering.
This recommendation is in marked contrast to the policy underlying the 2017 amendments to Interactive Gambling Act. It will be recalled that this Act confirmed that online in-play wagering is prohibited. The blanket prohibition was introduced despite recommendations to the contrary being made in the O’Farrell Report that further consideration should be given to the legalisation of in-play betting once a national framework for the regulation of wagering was in place. This was rejected expressly by the government.
Whether the Report’s recommendation is accepted by the Government and/or becomes a matter of political debate is unclear. It is yet another turn in the continuing debate about the best means to address integrity issues in Australian sport and the interaction with betting. What is clear though is that the Report confirms the important role that licensed wagering operators play in the fight against corruption in sport.
The above is a snapshot of the Report’s findings and recommendations relating to sports integrity and wagering. It is comprehensive but, for some, will make for uncomfortable reading. On the other hand, although the Report makes a number of recommendations, their implementation will require considerable investment from the Australian government in terms of policy. Also, some of the measure will require significant funds to implement.
We await the government’s response with interest.
For further information, please contact any member of Addisons Media and Gaming Team.