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Australia Debates Online Gambling Regulation

The Australian government is examining different ways to potentially stiffen laws prohibiting online gambling, including an approach similar to the US that would prevent or restrict certain forms of payment processing to online gambling sites.

Much like the situation in the US prior to the passage of the Unlawful Internet Gambling Enforcement Act (UIGEA) in 2006, the Australian government currently considers all online gambling except for sportsbetting to be illegal, yet that stance has never been actively enforced.

That could change if the proposed changes are adopted that would task banks and other financial institutions in Australia with blocking payments to and from online gambling sites. Credit card company Visa and other banks are opposing the potential regulations, claiming that they have no practical way of successfully blocking just those transactions.

While the UIGEA proved to be moderately successful in the US, it has also had unintended consequences, including the Full Tilt Poker debacle that saw the site go under owing players hundreds of millions of dollars after it was indicted by the US government.

In order to circumvent the UIGEA, Full Tilt was forced to use payment processors that fraudulently mislabeled transactions as well as resorting to crediting player accounts for deposits that were never successfully processed; these decisions helped create the massive shortfall at the company that contributed to player funds not being available to refund players.

Opponents of the proposed law in Australia also claim that it could make the country less competitive to other online merchants and services who might avoid the country for fear of non-gambling transactions being blocked or declined as well.

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