Lottoland wins legal battle in Australia

Lottoland has won a lawsuit in the New South Wales Supreme Court. The court ruled that all of the company's jackpot betting products were fully compliant with Australian law. This is a major victory against the Australian Communications and Media Authority (ACMA).

Since June 1, 2021, there has been a ban on secondary lotteries in Australia. As a result, websites are no longer allowed to offer bets on the results of lottery draws. In the run-up to this, there had been a large campaign by lotteries, newsagents, pubs and clubs that the sale of lottery tickets would dwindle if such secondary lotteries were allowed to continue.

Australian Communications Minister Mitch Fifield justified the ban on secondary lotteries as follows:

"This legislation will also protect more than 4,000 small businesses, including newsagents, pharmacies, and community clubs and pubs across the country that have long-standing recreational betting services."

According to the Interactive Gambling Act, games of chance in the form of online casino games are generally prohibited in Australia. However, online bets are generally allowed to a certain extent. On the website of the Ministry of Communication and the Arts, with reference to the Interactive Gambling Act 2001, one can read:

It is illegal to allow someone to engage in interactive gambling activities, such as gambling, in Australia. B. "Best Online Casinos". Examples are also roulette, poker, craps, online slots and blackjack. All games of chance, including mixed games of chance and games of skill played over the Internet, are prohibited under the Interactive Gambling Act 2001 (IGA).

Ban was never the end of Lottoland Australia

Lottoland Australia had already stated after the announcement of the ban that they would not leave the Australian market. The online gaming provider was the most important provider of secondary lotteries in Australia. Luke Brill, Managing Director of Lottoland Australia, stated at the time:

Lottoland Australia is well advanced in terms of other gambling opportunities to continue offering products to the 700,000 Australians who have registered with us over the past two years. […] It is a great pity that the Senate did not adequately take into account the unintended consequences of the new laws - not only for our customers, but also for competition and innovation. [...] We are here to stay and we will continue to innovate and adapt so that we can continue to offer our customers the exciting and innovative products they have come to expect from us over the past two years.
From Lottoland's point of view, they even regretted the move at the time, as it was bad news for Australian lottery players and lottery acceptance points. The Tatts Group, which was owned by Tabcorp, now has a huge and money-hungry lottery monopoly.

What does Lottoland Australia offer?

There are a number of daily jackpots known as the Monday, Wednesday, Tuesday and Thursday jackpot. The US Millions and US Power products are also on offer. From the perspective of the ACMA (Australian Communications and Media Authority), the products were illegal gambling. Lottoland's Daily Millions jackpot was viewed as a betting offer and is not illegal.

Lottoland points out for all products that you do not bet on Australian or international lotteries, but on Australian and international stock indices. These are allowed to be wagered on under the Australian Gambling Act. It was always emphasized that the relevant licensing authorities had approved the products.

In addition to the ACMA investigation, the Australian Securities and Investments Commission (ASIC) has also received complaints. There it was asked whether the games violated the law on interactive games of chance.

Question of interpretation: gambling or wagering?

The legality of the Daily Jackpot products had been fought in court. Lottoland had created a jackpot betting product in which certain numbers were taken from the financial markets at certain times of the day. They were combined into a long number and converted into a winning number for a lottery drawing.

In June 2019, ACMA was of the opinion that the product was a game of chance, which was prohibited under the Australian Interactive Gambling Act of 2001. It wasn't considered a type of betting. ACMA then filed a lawsuit against the company.

Justice John Sackar is the presiding judge of the New South Wales Supreme Court. He was of the opinion that the question of gambling could only be resolved if two points were met. On the one hand, a stake must be made as a bet. On the other hand, one has to look at the essence of the drawing of the prize. If the drawing can be viewed as a game, then it is a form of gambling. If the drawing of the prize is not a game, then it is a bet.

The customer places a bet on the product in question. However, the judge did not believe that the draw could be viewed as a game. In a "game" there should be some form of customer participation. However, jackpot betting contained few elements of the kind he believed would fall under the jurisdiction of the Interactive Gambling Act. As a reason he stated:

In my opinion, a game has to be more than the simple process of parting with a person's money and having the chance for a financial return. To me, playing a game also means that the participant shows a sense of positive action. There must be a degree of interaction in the sense that a participant's actions affect the outcome of the activity to some extent. [...] Here there is no participation in the sense that the ongoing actions of the participant can influence the result. There is little or no interaction in the sense that nothing the customer could do will affect the final bottom line.
The judge added that the definition of game in the Interactive Gambling Act would need to be broadened in order for it to be considered illegal gambling. In that case, however, there would no longer be any difference between “betting” and “gambling”.

Lottoland reactions to the verdict

The managing director of Lottoland Australia celebrated the verdict. The ACMA's stance on its jackpot bets was wrong, unfair and uncompetitive. In his statement he commented:

I am pleased to say we have been confirmed. With this matter resolved, Lottoland Australia can finally do what it does best - create new and exciting products that Australian consumers love.
This ruling marks a significant victory for Lottoland Australia. In recent years, the secondary lottery has been pushed out of the market by retail associations and competing operators. Overall, the case shows once again how far some gaming providers go in order to be able to offer their service in all markets worldwide.