How Aussies can enter $1bn lotto
A little-known company that has sent millions of dollars in Australian lottery winnings to punters in Europe over the past 16 years is now offering Aussies the chance to bet on billion-dollar jackpots like the US Powerball, MegaMillions and EuroMillions.
The Lottery Office, a subsidiary of Global Players Network Pty Ltd, has stepped in to fill the gap in the market after the federal government effectively banned Lottoland at the start of the year.
But the Australian Lottery and Newsagents Association, which was behind the lobbying campaign to have the laws around so-called "synthetic lotteries" changed, says The Lottery Office is also operating in a legal grey area.
Earlier this month, the WA government said it had moved to shut down the online lottery service because it believed it broke a state law banning the advertising of a foreign lottery, The Australian reported.
While the Gibraltar-based Lottoland allowed punters to bet on the outcome of an overseas lottery - a now-banned practice - The Lottery Office issues a government-authorised Australian lottery ticket and then buys a matching ticket in an overseas draw.
"We're definitely not in a grey area, no," The Lottery Office general manager Jaclyn Mundey said. "We are licensed to operate our own lotteries just like Tatts are, and we're required to buy the matching ticket, that's what our license says."
Ms Mundey said The Lottery Office was the only company in Australia with this business model.
"We spent many years developing that and gaining all the necessary legal approvals," she said. "We've done a lot of work legally."
Until late last year, Global Players Network was virtually unknown to Australian customers, for good reason - it operated the same system but in reverse, allowing punters in other countries the ability to bet on Australian lotteries via mail order.
"I'm sure Tatts doesn't mind," Ms Mundey said. "We've spent nearly $100 million on Tatts lotto tickets (since 2003). We've had a number of division one winners, not huge ones - $1 million, $1.5 million - a number of those over the years, mainly from Europe."
The Lottery Office says it has been flooded with new customers over the past week eager to enter Thursday's $US750 million ($1.06 billion) US Powerball jackpot, the fourth largest in the country's history.
"We had our biggest day ever on Sunday and broke that again on Monday," Ms Mundey said.
Australian Lottery and Newsagents Association chief executive Ben Kearney said his members had raised concerns about The Lottery Office, "which appears to be some sort of new carriage service for foreign lottery products".
"We are seeking some advice on this model and we will be speaking with regulators about it," Mr Kearney said. "We do have initial concerns that the model could raise questions under some state and federal acts that in some cases exclude certain lotteries like foreign lotteries from being sold."
In January, Lottoland replaced its previous offering with a financial markets-based betting product called "jackpot betting", while retaining its lotto-themed imagery and product names - prompting an investigation by the Australian Competition and Consumer Commission.
Lottoland chief executive Luke Brill said the company "no longer offers lottery betting products, in line with current legislation".
"Results of our jackpot betting products are derived from stock market indices, an approved betting contingency under our sports bookmaking business, not lotteries," Mr Brill said.
"Placing a bet on a financial market is nothing new and has been done for years. In fact, all the major online bookmakers offer betting markets on interest rates and financial market indices. In the simplest terms, jackpot betting has no relation to lottery betting because punters are betting on a different event or contingency."
Mr Kearney said the ALNA had complained to the ACCC about Lottoland's adjusted model "and the way that in every practical sense, not much seems to have changed when it comes to the effect of their product offering, their advertising and their name when it comes to potentially confusing consumers".
"This fails the reasonable person test and the ACCC is investigating the issues we have highlighted," he said. "Innovation is important, but it cannot be at the expense of compliance with laws that bring consumer protections."
An ACCC spokesman said: "The ACCC is looking at Lottoland's 'jackpot betting' product as it relates to the Australian Consumer Law. We are unable to make any further comment at this time."