The Internet Industry Association found the Interactive Gambling (Moratorium) Bill passed by the Senate last week a bitter pill to swallow, labelling the move "unjustifiable and misdirected".
"While our association does not advocate gambling and has an established track record in promoting end-user welfare, we are seriously concerned that the government's efforts on this issue may backfire, driving Australians offshore into unregulated jurisdictions, with none of the safeguards that apply locally, even now," IIA executive director Peter Coroneos said.
The Bill, which imposes a one-year ban on certain forms of internet gambling, only applies to interactive gambling services that have their central management and control in Australia or through an agent in Australia.
Coroneos warned that the legislation would erode Australia's reputation in regards to the internet economy and lead to a decline in technology development, skills and jobs that online gaming operations generate.
Some online gaming operators face losses of millions of dollars due to the moratorium. "In some countries, you only need to pay $US50,000 and you are given a licence -- no probity checks, no anti-laundering audits and no requirement that you provide protections for your patrons. In other countries, you don't need a licence at all," said Coroneos.
"We cannot understand why any government would want to trade that for well-regulated operations within Australian borders, where they can be seen and closely controlled under State and Territory legislation," he said.
"Less than one per cent of Australians presently use internet gambling, even though one in three households are now online. The internet allows player protection that surpasses that available in offline venues. As a result, we believe that migration to online would actually enhance player protection," Coroneos claimed.
"Understanding internet behaviour and the technology as we do, we find the supposed threat that triggered this action implausible. Whatever one's views on gambling, it is hard to avoid the conclusion that the internet has been punished for a problem which exists elsewhere, but which is simply too hard for the government to address," he said.
Senator Richard Alston said that the government is not responding to the question of problem gamblers on the internet as there are very few internet gamblers at this stage. Instead, the moratorium has been passed largely because of concerns voiced by the Productivity Commission that internet technologies have a potential to deliver a "quantum leap in accessibility".
The IIA is seeking talks with the government on behalf of its online gaming members to prevent the moratorium escalating into a ban that will impair the growth of mainstream e-commerce within Australia.
"Our States and Territories have made significant progress over the last two months on a uniform, national player protection model that will apply to all forms of interactive gambling. They should have been permitted to finish a job that is 90 per cent complete," added Coroneos.
The moratorium will last until May 19, 2001. A permanent prohibition after that date is under review.