On October 1, 1954, an undercover policeman walked into Mansell’s Newsagency in Hay Street, Sydney.
What happened next was to go into the annals of Australian legal history. The case was to go to the highest court in the law and seven judges would rule on it.
Am I talking murder, huge corporate fraud or matter upon which the fate of governments would rest? No. The undercover policeman bought . . . wait for it . . . a lottery ticket. But it was not an ordinary lottery ticket. It was – shock horror – a Tasmanian lottery ticket.
The previous decade, the NSW Parliament had passed a law prohibiting the sale of “”foreign” lottery tickets. And by foreign, it included lotteries from other Australian states. Pernicious foreigners were leading New South Welshmen into the iniquity of rampant gambling and something had to be done about, not only to save New South Welshmen, but also to get a few votes to save the Government. Sound familiar?
Mansell faced a fine and loss of a lucrative business, but he was in no position to deny he sold the dreaded Tasmanian ticket.
Instead, he challenged the constitutional validity of the NSW Lotteries Act. He argued that it infringed Section 92 of the Constitution that says “”trade, commerce and intercourse among the states . . . shall be absolutely free.”
How dare the NSW Parliament stop the interstate trade in lottery tickets, he argued.
What was the result? The legal result was that the High Court held the NSW law valid. You could stop the trade and commerce in lottery tickets and trade and commerce would still be absolutely free, the learned judges ruled. More on that anon.
The ultimate practical result, as we know, is that interstate lottery tickets are now sold in every newsagency in Australia. The prohibition on foreign lotteries, even in 1954, was not a practical long-term proposition.
And so we move to April 19, 2000.
Communications Minister Richard Alston was bellowed a question as he walked to his car.
“”What powers will you use to overrule the states on internet gambling?” he was asked.
“”Post and telegraphs, corporations, interstate trade . . .” he answered his voice trailing off as he got into the car.
Not a bad answer, for a lawyer.
The Commonwealth can easily pass a valid law to make it an offence for an Australian or a person in Australia to set up an internet gambling site. But as a practical proposition it is hopeless. It won’t stop internet gambling.
You have to wonder where Prime Minister John Howard, Alston and Family and Community Services Minister Jocelyn Newman have been in the past five years. Surely, they have a rudimentary understanding of the internet? Yet Newman chaired the ministerial meeting on gambling last week at which the Federal Government put its Canute-like proposition that it would impose a one-year moratorium on legal internet gambling. It is complete folly. Passing a law against internet gambling will not address the problem. It will make it worse.
The Northern Territory and the ACT have licensed internet gambling sites. The owners of the sites have undergone rigorous probity checks. They have been finger-printed and their financial wherewithal checked.
Australian would prefer to use an Australian site. They would prefer to use a regulated Australian site where they can be confident their winnings will not be spirited away by a larcenous overseas bookmaker who they cannot catch. But if there are no Australian sites, Australian gamblers will use overseas sites. And they can access them from their homes down the phone lines at the speed of light. Their gambling order can be placed in the Bahamas, or Nevada as if they were at the gaming table and the result comes back at the speed of light.
No undercover policeman will get a foot in. And even if he could, there would only be one or two isolated convictions. The effect of a Federal ban will be to send Australian money overseas to unregulated sites.
In fact, Howard, Alston and Newman do know how the internet works. But they also know that many people do not and that those people are worried about pornography and gambling on the internet and want to see something done. So they will see something done – a silly law brought in with a lot of sombre, determined faces. Howard and Alston know it is ineffective humbug, but they are playing on the ignorance of the large percentage of the population who know nothing of the internet. They probably know it would be better to have a regulated Australian internet gambling industry than have the money go overseas. That they don’t acknowledge it and legislate accordingly shows their political opportunism and lack of leadership. They are following the ignorant, not leading them.
It is easy to have a valid law but it requires a little brain power and the absence of political grandstanding to have an effective one.
Alston is right when he lists the Commonwealth powers – except interstate trade. The Commonwealth’s power over interstate trade cannot be used to control gambling because the High Court held in Mansell’s case that gambling was not “”trade”. It was merely a pernicious activity long recognised by the law as something to be controlled. Because it was not trade, interstate gambling it could be regulated and banned and still leave interstate trade “”absolutely free” as required by the Constitution. That is called legal logic.
But Mansell’s case also held that a Federal law prohibiting communications in furtherance of gambling would be valid. This shows Alston is correct on the power of the Commonwealth to act. The Commonwealth can also act to override mandatory sentencing. Indeed, it can get its way on virtually anything by using the communications, corporations, foreign-affairs, tax powers and the power to give or withhold money.
We may as well stop the hand-wringing about consistency in Commonwealth attitudes to overriding the states. The Commonwealth can override whatever it wants. That is a political matter, not a legal one.
John Howard likes the populist causes of mandatory sentencing and fear of internet porn and gambling. His Methodist upbringing means he objects to euthanasia and any relaxation of drug prohibition. He can use or not use an armoury of Commonwealth power to get his way. And the same goes for Federal Labor when it is in power. (Provided the Senate agrees.)
But enacting a valid law will not stop gambling, or doctors pulling the pin, or people shooting heroin, or kids stealing three times.
Law can go some way to changing conduct but it cannot fly in the face of human proclivities and culture or ignore technology.