Lotteries and instant scratch tickets must be included in the same law that bans the use of credit cards for online gambling, a gambling-consumer protection advocate says.
Financial Counselling Australia’s Director of Policy and Campaigns Lauren Levin said the exclusion of lotteries from the credit card ban, which was introduced in response to a 2021 Federal Government gambling inquiry, was an oversight by authorities and advocates, as lotteries cause some people as much harm as other forms of gambling.
“We got it wrong. We were all stretched in responding to the detail for the online-gambling consumer protections. But it is not too late to fix the oversight. This is important too,” Ms Levin said.
“If lotteries get this carve-out and people can use credit cards, it will be the thin edge of the wedge. They will then get carve-outs from future advertising and inducement reforms. We’ll regret this mistake when lotteries are advertised day and night and people increasingly spend large sums of money.”
Ms Levin said lotteries were no longer harmless fun as portrayed by providers. They were now also a far cry from the benign, government-owned public sweeps that we remember from childhood, and which had legislation that mandated donating money to charitable causes.
“Governments sold our lotteries. They were privatised and are now for-profit, commercial businesses like other online gambling operators. There is Lottoland, the Lottery Office, the Lottery Corporation, and even Sportsbet now owns a lottery.
“There is no reason why lotteries should be considered any differently to sports betting or pokies,” Ms Levin said.
“Lotteries are now operated by corporate giants with multi-million-dollar salaried executives, mega profits and online platforms. They have a slick online marketing model with tickets available 24-7. KenoGO’s online lottery offers a draw every three minutes!”
“The world has changed, lotteries have changed. KenoGO is showing us the future of lotteries, where it is possible to buy a $20,000 basket or more every day of the week. This is a product that will cause some people to lose their homes and relationships.”
Ms Levin said lottery products were the most commonly used form of gambling worldwide, and so there was no rationale for denying consumers the same level of consumer protection as other forms of gambling.
“The principle is exactly the same – ‘no one should be betting with money they don’t have’ – whether they’re spending $200 on a lottery syndicate or on a sports multi, whether they’re spending in the local newsagent or with a sports-betting giant.”
Customers have several other payment options, including debit cards.
If people can’t afford to buy lottery products without credit, that is clearly a red flag and a sign that greater consumer protection is needed, Ms Levin said.
Lotteries have also long hidden behind the excuse of supporting mum-and-dad newsagents, but the franchisor masters, like the Lottery Corporation are now highly sophisticated businesses with high-speed, low-return gambling products that are harming many people, she said.
“Lotteries are not the small-business sector and actually have the worst win ratios for consumers of all gambling products. Research shows that scratch tickets have an 80 per cent win ratio for the house and regular lotteries between 25 and 40 per cent to the house. Compare those ratios with casinos, sports betting and racing which return between 9 and 15 per cent and pokies around 11 per cent.”
In a 2021 survey of specialist gambling financial counsellors, 56 per cent said they were “very concerned” about the harms caused by lotteries among their clients (see below).
“The lotteries sector’s response has always been to downplay the harm caused by lotteries, but financial counsellors are seeing a very different picture and can cite case after case of people who spent tens of thousands of dollars in lotteries, using debt to fund their purchases.
“And that is why there needs to be an inquiry focusing solely on lotteries and the harm caused – assuming the industry doesn’t agree to the same consumer protections as for the rest of the online gambling sectors.”
Gamblers Help: 1800 858 858
National Debt Helpline: 1800 007 007 and ndh.org.au (online chat)
Note: Gambling financial counsellors help people impacted by gambling, both the person gambling and those impacted by someone else’s gambling. It is a free, independent and confidential service.