The past several days have brought news from different parts of Australia that Lottoland, the Gibraltar-based lottery betting operator, could face a ban in at least three states due to its business model that has been attacked for hurting locally-run traditional lottery operators. The company’s operations are currently banned in South Australia.
Generally speaking, Lottoland allows its customers to bet on the outcome of more than 30 international lotteries. However, here it is important to note that by placing a wager on the winning numbers of one lottery draw or another, bettors do not participate in the draws themselves. In other words, the Gibraltar-based company has no link whatsoever to traditional lotteries.
Lawmakers from different states, Australian operators of traditional lotteries, and local newsagents, who sell lottery tickets, have grouped together against Lottoland and its business model and given the fact that opposition is growing with every day passing, their efforts may culminate in an outcome they would rejoice at.
Why Has Lottoland Drawn Massive Discontent?
The states of Victoria, Western Australia, and Queensland are leading the campaign against the lottery betting operator and recent announcements from lawmakers signaled that there are regulatory changes in the works. Said changes will aim at introducing more clarity on the legality of lottery betting.
Generally speaking, all three states want to banish Lottoland. Betting on lottery draws is neither legal, nor illegal in the three jurisdictions. However, Lottoland is able to service local players through a license from the Northern Territory. Being licensed in that particular jurisdiction, the operator pays due taxes there. However, it does not contribute any funds to the other Australian states it operates in.
The fact that Lottoland is not a tax revenue contributor is one of the main reasons it has gained staunch opposition. The company has been accused of stealing customers from traditional Australian lotteries. And with lotteries losing players, they have been complaining that Lottoland has been hitting their profitability, as well.
Local lotteries annually contribute significant amounts of money to different social causes. However, if their revenues are reduced, contributions also shrink. Lotterywest, the state-licensed operator of Western Australia, reported a A$60-million drop in sales for the previous financial year. The reduction was partially blamed on the rising popularity of Lottoland and its likes.
Lottoland has previously said that given the fact that there are no proper regulations in the states it operates in, it cannot be a tax contributor. However, the company has pointed out that it would gladly pay its due in tax once and if its operations are regulated.
Luke Brill, CEO of Lottoland’s Australian business, has recently told local media that they are fully supportive of the proposed introduction of a point of consumption tax in Western Australia. The company could thus contribute 15% of its gross profit from local customers.
Lottoland has also suffered media attacks for harming Australia’s lottery market in different ways. As mentioned above, the operator is believed to be stealing customers from traditional lotteries. Responding to criticism, Lottoland has pointed out that it is actually complementing and growing Australia’s lottery market by providing a different type of service.
The company believes that the customers that buy lottery tickets and the ones that bet on the outcome of lottery draws are representatives of two different groups and it is on rare occasion that the former feel tempted to bet online and vice versa.
The company and its business model have also been attacked for misleading customers and for targeting them by not letting them know that they do not participate in actual lottery draws.
Urged by the growing discontent against its operations, Lottoland has recently posted a blog post on its Australian website hoping to bust the myths about its operations. The whole post can be read here. In it, the company explains that “Lottoland is actually an online betting bookmaker which allows customers to bet on the outcome of the official lottery”. It should be admitted that this statement is quite straightforward. However, what comes next may actually mislead customers.
Lottoland promises that “[a player] will have the exact same customer experience”
Media Campaign
Last week, news agencies from around Australia, which are also authorized sellers of lottery tickets, and local lottery operators launched the “Lottoland’s Gotta Go!” campaign as another manifestation of their growing discontent with the Gibraltar-based company.
The campaign includes TV commercials and related content of different nature and is aimed to present Lottoland as an enemy to Australia’s traditional lotteries and those who are involved in the nation’s lottery industry.
Tatts, one of the largest gambling operators in Australia, which also runs lottery operations, has been among the most powerful and vocal opponents of the lottery betting operator. Tatts has, too, criticized Lottoland for stealing customers and revenue from it; a statement to which the Gibraltar-based company has responded by arguing that its Australian revenue represents 1% of what Tatts generates and that it cannot impact the business of its much larger counterpart.
Lawmakers Prepare Ban on Lottoland’s Business
Lottoland’s services have been banned in South Australia, but as mentioned above, three more Australian states could follow suit. News outlets from Western Australia, Victoria, and Queensland have recently reported that anti-lottery betting bills have been in the works and would soon be introduced.
Western Australia Premier Mark McGowan confirmed earlier this week that a draft bill that would ban Lottoland in the state is currently being prepared by lawmakers. The state’s top official admitted that they will need time to complete the legislative piece, but that they are determined to stop the proliferation of lottery betting services on the territory of Western Australia.
Victoria is also seeking to ban Lottoland’s operations. According to local media, the Gambling Regulation Amendment Bill 2017, which will introduce changes into the state’s original gambling law – the Gambling Regulation Act 2003, will include provisions against the lottery betting operator. The bill is expected to be introduced sometime next month.
Lottoland has also been facing opposition from members of Australia’s federal government for quite some time now. Senator Pauline Hanson, originally from Queensland, urged the Parliament to ban a business that has resulted in customers and jobs being lost to lottery betting services. Ms. Hanson is known for her straightforwardness and oftentimes scandalous approaches to legislative matters.
She had pushed for a ban on Lottoland’s operations to be introduced on a previous occasion. And although her cause was supported by Nick Xenophon, a fellow Senate member and long-time opposer of everything gambling-related, it did not succeed. Given the growing media attention to the matter and the overall positive response to a potential ban, the outcome may be a bit different this time.
