Committee Secretary Senate Standing Committees on Environment and Communications PO Box 6100 Parliament House Canberra ACT 2600

Participation of Australians in online

I would like to thank the Senate for giving me this opportunity to put forward my view on the participation of Australians in , and in particular within the context of the recently amended Interactive Gambling Act 2001 (IGA 2001).

I think it is very important to consider the nature of the game of poker and not dismiss it out of hand as just another gambling game played by a degenerate minority.

In my opinion the key points that make poker different from other style games are as follows:

Poker is a skill game with a short-term luck element. It is more akin to games like Chess and Bridge and even most sports. In these games, and the majority of sports, if all participants played a perfect game then the outcome of the game would be a draw or stalemate. There can only be a win either way by one opponent (or team) capitalizing on the mistakes of their opponent(s) – i.e. being lucky enough for the mistake to occur and being in a position to exploit it. This is known as a zero-sum game. Poker is no different. In a poker game participants are playing against each other and not against the house (i.e. a Casino or an Online Poker room). The only gamble involved is me gambling that I am better than my opponents – just as it would be if I entered say a Tennis Tournament or a Chess Tournament. The only gain made by the Casino or Online Poker Room is a small hosting fee either taken from a Tournament buy-in or from individual pots in a cash game. This would be similar to the organisers of a Chess Tournament deducting a hosting fee from a Tournament buy-in.

Casino games are completely different. In a casino game the gambler is playing against the house and is guaranteed to lose money over the long-term. This is because of the house edge which is basically the profit margin that the house charges for playing the game. The odds are stacked against the player and it is absolutely mathematically impossible to make money gambling on casino games over a long-term period.

The significant skill element involved in playing poker is also demonstrated by the many resources available to help players to become better at the game. There is a multitude of books, online training sites, forums, and personal poker coaches available to help with this.

The existence of poker forums and training sites also makes the game very social. I have been playing online poker since about 2005 and have made many friends all over the world and had many in depth discussion on poker strategy over the years. How is this different from a strategy game such as Chess or the many prize money video gaming tournaments that are appearing these days?

The majority of poker players one day dream of qualifying for a real life major televised event such as the World Series of Poker (WSOP) or the World Poker Tour (WPT). Online poker tournaments offer a cheap way to qualify by holding very low cost satellite tournaments where the prize is entry into a major tournament. In what other sport is it possible for an ordinary person to make it into a major televised competitive event? A relevant example here is Australian winning the 2005 WSOP, then an amateur player. The passing of this Act will effectively shatter the dreams of thousands of poker players in this country.

In my opinion it would be far better to regulate the online poker industry. A good example of this is in the UK where Online Poker Rooms are required to hold a license with the UK Gambling Commission. The Commission is funded by the license fees and it holds a public register of all license holders so that players can check that the site they are choosing to play at is reputable. Regulation of the industry would also enable the Australian Government to tax the revenue earned by the online operators in this country which would clearly benefit all of us.

As part of regulation I believe there should also be much more education available to the general public regarding gambling in general. Everyone should understand that it is impossible to win money long-term by gambling on casino games whether they are played online or in a real life Casino. Gains can only be made by being lucky in the short-term. People should also be educated on the difference between these games and skill games such as Poker or gambling on horse racing where the skill lies in studying form and making a reasoned gamble based on your own assessment of the race outcome compared to the bookie’s assessment.

Whilst I respect the spirit of the IGA 2001, I am deeply concerned that the amendments will effectively prevent reputable poker providers such as Pokerstars and 888 from operating in Australia but will not prevent disreputable operators who will choose to ignore the legislation and try to fill the market gap left by the reputable businesses. I do not believe the amended IGA 2001 will be effective in preventing this and the policing of the Act will likely be more onerous than just regulating the industry in the first place.

I would like to end by giving a bit of background to myself and my poker and gambling activity. I am a 47 year old self-employed family man. I play poker a few times a week when I get the chance. I deposited about $50 online back in 2005 and through careful study and application I became a winning player and have never needed to make another deposit. I harbour dreams of making it big one day, just like the majority of poker players. I am also risk averse and do not like to gamble. This is because I have educated myself to understand what gambling is and don’t see the point in throwing money away on a casino game that can give me no positive outcome.

I appreciate your time on this and would be grateful if you could consider my opinions and those of my fellow poker players as part of your inquiry.

Yours Sincerely,

Andrew Hitchen