“Internet Gambling”
`
`Mr David Ohlson
`Lasseters On-Line
`NT
`
`Paper presented at the 2nd National Gambling Regulation Conference,
`convened by the
` Australian Institute of Criminology
` in conjunction with the
` Australian Institute for Gambling Research
`and held in Sydney, 6 -7 May 1999
`
`

`

`LASSETERS ONLINE
`AUSTRALIA’S FIRST REGULATED INTERNET GASINO
`
`History
`
`Lasseters Online is the internet gaming site of Alice Springs based, Lasseters Casino. It is found at
`www.lasseters.com.au.
`
`Development commenced in early 1997 and was completed in March 1999. The site has been fully
`developed in Australia at a cost of over $5 million. This has involved over 135 man years of work to
`undertake:
`
`•
`•
`•
`•
`
`proprietary design of the games graphics
`development of games software
`design of all security systems
`development of financial transaction systems
`
`Lasseters has taken the lead in the regulated online gaming industry in Australia believing it to be the
`future for gaming internationally. Gaming is a form of entertainment and the internet has irreversibly
`changed the way people are entertained worldwide.
`
`For a small casino like Lasseters, it also exposes them to a larger potential market worldwide with more
`than 100 million people connected to the internet.
`
`Market
`
`Research by Lasseters has shown a demand for regulated sites within the estimated $500 million online
`gaming market. There are more than 130 unregulated sites currently available.
`
`Many internet players are losing confidence in unregulated online casinos due to poor credit card
`security and on some occasions, incorrect or non-payment of winnings.
`
`The perspective taken by Lasseters is that gaming is a significant business worldwide and Australia has
`a strong reputation for operating a successful and well regulated industry. Extending this regulation to
`internet gaming provides Australian casinos with a significant competitive advantage within the world
`market.
`
`Current Status
`
`On Thursday 8 April 1999, Lasseters Online received a licence to operate for cash gaming under the
`Northern Territory Gaming Control (Internet Gaming) Act, passed on 30 April 1998.
`
`Cash gaming was launched by the NT Minister for Racing, Gaming and Licensing, the Hon. Tim
`Baldwin MLA on Saturday 10 April 1999.
`
`While it is Australia’s first regulated internet casino, it is also the world’s first to be operated by a
`physical casino and licensed in a fully regulated jurisdiction.
`
`

`

`The site is being launched in two stages. Initially, residents within Lasseters Casino’s gaming licence
`territory (NT area south of and including Tenant Creek) and international players will have access. The
`second stage is to open the site for the rest of Australia.
`
`To date, almost 3,000 players from 92 countries have registered with Lasseters Online.
`
`While Lasseters is ready to launch nationally and, ideally, would prefer to be available Australia-wide,
`the Northern Territory Government has asked this launch not proceed until there is further
`consideration of a national approach to internet gaming.
`
`There is an urgent need for a decision to be reached on a national model for internet gaming regulation
`and indeed, whether one is feasible. The main issues are:
`
`•
`•
`
`the arrangements for tax sharing and the percentage
`the implications for licences issued for physical casinos in each state and territory because of their
`right to exclusive trade within a defined area for a defined time.
`
`Features of the Site
`
`A factsheet is attached which details the operating features of Lasseters Online.
`
`Role of Northern Territory Government
`
`The Northern Territory’s Racing and Gaming Authority has overseen and audited all stages of the
`design and programming of the site and will continue to monitor Lasseters Online during its operation.
`The Authority has investigated every component including security, software installation, internal
`controls and financial systems. No aspects of the operating system can be altered without the approval
`of this Authority.
`
`From a contractual point of view, Lasseters Casino has entered an Internet Gaming Operator’s
`Agreement with the Northern Territory Government which expires on 1 January 2003. This agreement
`details all conditions under which Lasseters is authorised to operate which are summarised as follows:
`
`•
`
`•
`
`•
`
`•
`
`•
`
`A tax rate of 8 percent of Lasseters Online’s annual gross profit has been set. This is the same as
`that applied to the majority of games at Lasseter’s land-based casino in Alice Springs and is
`comparable to all other international tax rates at other land based casinos in Australia.
`
`The annual gross profit from gaming will be audited annually by independent auditors who
`provide the results to the NT Government.
`
`The Minister for Racing, Gaming and Licensing will review the tax rate annually to take into
`account any increase in revenues and the potential impact of the GST.
`
`Lasseters Casino has exclusivity for internet gaming within its licence area south of Tennant
`Creek for one year.
`
`Lasseters will pay the NT Racing and Gaming Authority $300,000 for the preparation and
`coordination of the agreement as part of a normal fee-for-service arrangement.
`
`3
`
`

`

`•
`
`The NT Government is indemnified from liabilities and expenses in relation to Lasseters Online.
`
`Security Controls
`
`Security systems to control access and financial transactions were critical aspects of the design of
`Lasseters Online. As a result, the system uses the highest generation of security controls available.
`These include the following features.
`
`• The use of personal passwords, log-in user identification, a series of challenge questions set by the
`player and background checks by the operator, limit access to only those players who are over 18
`years of age and verify their identity every time they play.
`
`•
`
`•
`
`Players use a credit card to open their wagering account and the amount deposited is controlled by
`their approved credit limit. In any event, initial registrations have a deposit limit of $500 per
`month. In time, a player may apply to Lasseters Online to increase this limit but must have
`achieved trusted status with the operator for it to be approved.
`
`This deposit limit also controls the amount players can potentially lose. They can only wager with
`this deposit and any winnings they may accumulate.
`
`Players can set their own bet limits to nominate how much they wish to spend on a daily, weekly or
`monthly basis. This option is recommended when players register. Having set a limit, the player is
`unable to raise it themselves without contacting Lasseters Online.
`
`• Child access to internet casinos is restricted through background checks conducted on all players
`registering with Lasseters Online. In addition, the site is hotlinked with credible child screening
`software providers such as Net Nanny and Cyber Patrol. Their software can be downloaded from
`Lasseters Online.
`
`•
`
`Lasseters Online uses a 128 bit key encryption to secure the transfer of sensitive information and
`the use of credit cards. This system is password protected and scrambles information sent between
`the player and Lasseters Online. Anyone attempting to tap this information in transit would find
`the material unusable.
`
`Servers holding sensitive player information are housed in a secure environment in Lasseters
`Casino MIS Department in Alice Springs. The area is under 24 hour surveillance and has restricted
`access.
`
`•
`
`Players who may feel they are developing a gambling problem are assisted in two ways.
`
`First, Lasseters Online has a hotlink to community counsellers, Amity House, who provide advice
`about gambling problems, information and assistance.
`
`Second, players have the option to exclude themselves from playing for a ‘cooling off period’.
`Through a self exclusion button, players on Lasseters Online can take a seven day break. If they
`use this button three times, then they are considered to have a problem and are permanently
`excluded from registering again.
`
`4
`
`

`

`• Every transaction by a player is recorded and can be tracked through a comprehensive audit trail.
`The system tracks the time a player entered and left the casino, the games played, amount wagered,
`amount won, and amount deposited or withdrawn. This is both to the advantage of the player and
`to the operator particularly in the case of any disputes.
`
`• All staff at Lasseters Online are licensed under the NT Gaming Control Act (Internet Gaming).
`
`• Controls can be programmed to prevent improper activities such as money laundering. A specific
`program scans for certain conditions which may indicate money laundering and will report these
`automatically.
`
`These controls show the regulations for online gaming to be much tighter than with any physical casino.
`No physical casino can verify the identity of all players, restrict how much they spend, or provide a
`report on their playing history.
`
`Lasseters’ Perspective
`
`In summary, Lasseters Casino’s position on internet gaming is as follows:
`
`1.
`
`2.
`
`3.
`
`4.
`
`5.
`
`Australia is recognised internationally as having an outstanding record on gaming regulation. The
`success of the internet and the current high use of unregulated gaming sites demonstrates the
`demand for action on online gaming regulation.
`
`A regulatory framework is vital to protect the interests of players, their financial security and to
`help control the shape of the growing industry.
`
`Internet gaming can be effectively controlled as shown through the successful development and
`operation of Lasseters Online, regulated by the Northern Territory Government.
`
`Lasseters Casino has agreed to postpone the national launch of Lasseters Online in the interests of
`cooperating on a national approach.
`
`The company is proud of the design of Lasseters Online and satisfied that it has taken a
`responsible approach which demonstrates that all possible issues associated with internet gaming
`can and have been addressed.
`
`For further information:
`
`Peter Bridge, Lasseters Casino – Chief Executive
`Telephone (08) 8950 7720 or mobile 0418 890 037
`
`David Ohlson, Lasseters Casino – Executive Manager, Special Projects
`Telephone (08) 8950 7773 or mobile 0418 756 609
`
`Joanne Pafumi, The Rowland Company
`Telephone (07) 3229 4499 or mobile 0407 112 668
`
`5
`
`