The Federal Government’s call for a one-year moratorium on internet gambling may be well-intentioned, but it is hopelessly impractical. Last week the Government called on the states and territories to agree to the moratorium. However, only NSW agreed fully and Western Australian partially. The other states and territories rejected the call, arguing that it was better to licence and regulate Australian operators than have Australians going to overseas-based websites. The Northern Territory and the ACT already have issued licences and gambling on the internet is running. In the territories probity and liquidity checks have been done on the licence-holders to make sure they are of good character. It means that gamblers who win on these sites can be confident they will get their winnings. They will have a licence registry in Australia and a regulatory body to help enforce winnings and to ensure the sites are run properly and pay the odds they say they are paying. Guarantees like this do not exist with respect to overseas-based sites.
The Federal Government should recognise the reality of the internet. It means people in their homes in Australia can gamble down the phone lines using credit-card facilities at the speed of light as if they were in a casino in Nevada or a Caribbean island. Most Australians would prefer to use an Australian-based site, preferably one that has been licensed. But in the absence of Australian sites, people will use overseas sites. A Federal Government moratorium, therefore, is worse than ineffectual, it is actually harmful because it will drive people to off-shore sites. Australia will lose the income. Australians can get ripped off without recourse.
The Federal Government says it will introduce legislation to override state gambling laws if necessary. The Labor Party’s view is that it will not oppose overriding legislation, so the moratorium will go through. Most likely, when the year is up, it will be renewed. The practical flaws in this path are more important than the constitutional questions. Under the Commonwealth’s proposal there will be no telling whether the moratorium worked. Gamblers logging on to overseas-based gambling sites cannot be counted. Nor can how much money they spend. At least, with regulated Australian-based sites, we can get some idea how much is being wagered and lost as licence holders will have to supply returns and pay turnover taxes.
The question of overriding state legislation is of less importance. The stand by both Labor and the Coalition on questions of “”over-riding the states” have never been consistent. They over-ride or not out of political philosophy or political expediency rather than any considered view about what areas the states should retain sovereignty over.
The Constitution states which powers are Commonwealth powers and gives everything unstated to the states. In the 100 years of federation the courts have interpreted the Commonwealth’s powers ever wider. Moreover, technology, the increasing role of corporations in Australian life and the increasing internationalisation of governmental affairs have also led to an increase in Commonwealth power. The Commonwealth has power over post, telegraphs and other like services, over corporations and power with respect to foreign affairs. It also has the power to tax and to give (and withhold) money from the states. It means that if the Commonwealth puts its mind and political will to it, it can force its will on the states over virtually anything. It is a political question not a legal or constitutional one.
And that is the better way to look at it. It is not a matter of whether the Commonwealth should “”override the states”. It is a matter of whether the Commonwealth should attempt to ban internet gambling. It shouldn’t. The attempt will be futile and counter-productive. It should override mandatory sentencing (using the foreign-affairs power) because it is immoral, racist and ineffective.