Online Casino Operator Withdraws from Australia as Legislation Black Cloud Threatens



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Nervous about potential online gambling-ending legislation, internet gaming operators are making plans to bolt the Australian market. In the past week, the first domino fell, Vera&John, a site that sounds more like a place to order chocolate-dipped fruit than an online casino, told its Australian customers that their accounts will have to be closed.

In an e-mail, the Malta-based Vera&John wrote:

We’re always sorry to say goodbye, but the time has come. Due to a business decision, Vera&John will no longer be able to offer its services in your jurisdiction. Your account will officially be closed in one week.

As of today, you will no longer be able to make deposits to your Vera&John account. Any funds which have not already been removed from your account can still be transferred to your preferred payment provider within the next week.

While the site did not specify the exact reason for its decision, it almost certainly has to do with the Interactive Gambling Amendment Bill 2016, brought to the fore by Australia’s Minister for Human Services Alan Tudge in November. The goal of the bill is to combat “in-play” online sports betting. Bets of this type are only allowed to be made in a telephone call in Australia, but gaming operators have been violating the law for a number of years.

Many offshore operators without Australian licenses have offering in-play sports betting, as have many Australian operators. By creating smartphone apps that provide the vehicle for such bets, operators have essentially found a loophole to the “telephone call” rule. A smartphone is still a phone, right?

Thus Tudge’s bill would amend current gaming law to tighten up the ban on in-game sports betting over the internet. As for online poker, right now it is not explicitly legal in Australia. It isn’t explicitly illegal, either, so many operators freely offer their services in the country. But the bill would also prohibit games that are not outright legal. Therefore, an online poker room or, say, an online casino like Vera&John, would be running contrary to the law.

Vera&John is the first operator to withdraw from the Australian market because of the possibility of the law, but other companies have indicated that they might do the same. During his company’s third quarter earnings call in November, Amaya CFO Daniel Sebag said that PokerStars would likely retreat if the law is put in place.

From the transcript of the call on Seeking Alpha, Sebag said, “In Australia, we currently offer poker and are reviewing the applicability of proposed legislation to player versus player games of skill. At this time, it would appear likely that if the legislation passes, we would block players from Australia. As we do not offer casino sportsbook in Australia, it currently contributes to about 2.5% of our revenues and we estimate it could reduce our EBITDA margin by up to a 150 basis points.”

PokerStars has been particularly sensitive about its image with U.S. regulators, so it would not be surprising at all if it withdrew from Australia in order to avoid doing anything that might look untoward as it continues to try to make progress in current and future regulated U.S. markets

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