Gibraltar-based Lottoland is at the center of ongoing investigation by Australian regulators after it was found out that the wagering outfit has offered an exotic new betting product anchored on financial markets, despite being banned from offering international lotteries.
Three regulators, including the Australian Securities and Investments Commission (ASIC), is looking at lodging a complaint against Lottoland for launching the controversial new product called “jackpot betting”.
This new product leverages figures from financial markets such as the Australian Securities Exchange and then converts them to winning lottery numbers by an algorithm. The product might also be violating interactive gambling rules, prompting the Australian Communications and Media Authority (ACMA) to also launch a separate investigation.
International Lottery Ban
Australia passed legislation in June 2018 to stop Lottoland from allowing customers to bet on foreign-based lotteries.  Lottoland’s international lottery operations have taken a huge hit, as this ban which came into force from Jan 10.
The ban came as Australia conducted massive betting crackdown targeting operators offering synthetic lotteries. Rather than purchasing lottery tickets from physical outlets, Lottoland customers were instead previously allowed to place bets on lottery outcomes. This activity would lure people away from traditional lotteries, and therefore significantly impact on their revenue, campaigners said.
Lottoland which is regulated and registered in the Northern Territory claims to have a massive 750,000 user base, providing them the chance to place bets on the outcomes of Powerball and other major US lotteries.
Local wagering companies and newsagents, including Tabcorp and its TattsLotto division, had joined forces to have Lottoland’s operations examined. The ban was welcomed by the Australian Lottery and Newsagents Association with CEO Adam Joy saying the prohibition was long overdue.
However, Lottoland eventually gained support from several new agency industry bodies, with some arguing that the ban would remove competition and would hurt small businesses. But the ban did push through to impact Lottoland. There are rumours floating around that Lottoland might eventually decide to stop its operations in Australia.
The ban hasn’t caught Lottoland by surprise as it was in the works for a number of months. CEO Luke Brill insisted Lottoland would not leave the market and promised that the company would come up with more exciting, creative and innovative products in the years ahead.
Australian Authorities to Seek Advice From Northern Territory Government
The Northern Territory government, through Attorney General Natasha Fyles, will be consulted on Lottoland’s latest activity, with Communications Minister Mitch Fifield also coordinating with the ACMA to ensure the nation’s laws are not violated with the launch of the new betting product. Senator Fifield further said that the government won’t allow illegal activities that would put the operations of local businesses at a disadvantage.
Lottoland offered a 12 percent revenue-sharing deal with local newsagents in a desperate attempt to overturn the ban. Liquor & Gaming NSW said that move could be in breach of the law.
No Specific Details Released
Licensing NT is also understood to be looking into whether promotional content used to advertise the new jackpot betting product, such as using the words “Mega Millions” could misguide customers. No further details were given by the Northern Territory regulator.
ASIC and the ACMA similarly refused to discuss specific complaints but confirmed that every complaint will be dealt with on its merits. Despite the lack of information being released in relation to the issue, it’s understood all complaints point to the new product offering from Lottoland.
Other industry sources are suggesting Lottoland might actually be generating random winning numbers based on financial markets, which violates the Interactive Gambling Act.
In defense of Lottoland, Brill said it consulted its lawyers on whether or not they needed to obtain an Australian Financial Services Licence (AFSL) prior to launching the new product. They were told the new product could be introduced without an AFSL.
Brill said they are also not aware of any other sports betting operator holding an AFSL to offer financial market betting to locals. He further said their customers fully know that their products are not based on international lotteries and are in line with Lottoland’s own definition of “jackpot betting” indicated on its website.
Lottoland’s 2017 revenue from the Australian market stood at $23 million, though the company only counted a commission from bets for the first nine months of the year.

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