Illegal offshore gambling could cost nearly $3 billion in lost taxes as well as racing and sport product fees unless appropriate action is taken, according to a report released today.

The Australia Offshore Wagering Market Analysis 2023 Report (the Report) has also revealed the illegal offshore market in Australia is now worth more than $1.1 billion, approximately 15 per cent of the total Australian gambling market.

The Report developed by independent data analytics firm H2 Gambling Capital on behalf of Responsible Wagering Australia has forecast that from 2022-27, racing and sports bodies could lose $1.6 billion in product fees to illegal offshore gambling markets, while $1.3 billion in taxes could be lost.

Offshore operators do not have to contribute tax revenues or product fees, nor are they required to provide important consumer protection measures provided by Australian-licensed operators. As a result, offshore operators can offer more competitive pricing to customers than licensed onshore operators.

According to the Report the number of offshore wagering sites actively targeting Australian players has increased from 47 to 84 sites in the past four years, including those which allow for wagering with cryptocurrencies.

The Report found that ‘once established, eliminating an offshore wagering market is that much harder to achieve’, and therefore it’s important to ‘maintain a broad and fair onshore market licensing system that favours licensed operators’.

The analysis shows that ‘any prevention of advertising & marketing onshore has a number of significant drawbacks. Most importantly it prevents players from knowing which sites are legal and safe. In addition, restrictions on onshore advertising give unlicensed operators an unfair advantage because they already regularly advertise online via affiliate websites which are difficult to police’.

Responsible Wagering Australia CEO Kai Cantwell welcomed the Report and said the prevalence of illegal offshore gambling demonstrated the need for any new regulations on Australia’s legal online wagering industry to be evidence-based and consider the views of industry, sporting bodies, and broadcasters.

‘It is crucial that any future reforms are balanced and prevent Australian players from being driven offshore, where player protections are limited,’ Mr Cantwell said.

‘Additionally, failure to maintain a sustainably regulated sports betting market could result in a significant loss of economic benefits to the Australian economy, as well as to the sporting, racing, and broadcasting industries.’

The Report noted that ‘Australia is one of the most progressive countries in terms of its approach to safe and responsible gambling onshore, with licensed operators subject to a number of controls. Most recently, the National Consumer Protection Framework has introduced a range of new required messages which must appear in all gambling advertising. In addition, RWA members themselves are committed to ensuring Australia has “the best conducted, socially responsible, wagering industry in the world”.’

‘RWA and its members look forward to the outcomes of the House of Representatives Inquiry into Online Gambling and will continue to work with government to discuss sensible measures that ensure that the six million Australians who enjoy a punt can do so safely,’ Mr Cantwell said.

The full Australia Offshore Wagering Market Analysis 2023 Report can be accessed here: H2 – Australia Offshore Wagering Market Analysis 2023 Report.