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Cost Benefit Analysis of Interactive Gambling Act 2001. Presented By: Josephine Chuk & Paul You. What is Interactive Gambling Act 2001?. Passed on 28 June, 2001 Objective of Act:

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Cost Benefit Analysis of

Interactive Gambling

Act 2001

Presented By: Josephine Chuk & Paul You

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What is Interactive Gambling Act 2001?

  • Passed on 28 June, 2001

  • Objective of Act:

    To address the issue that interactive gambling may provide a “quantum leap” in access and an increased risk of problem gambling.

  • Content of Act:

    Prohibits online casinos from taking bets from Australian Internet users but allows the provision of interactive sports betting and wagering services.

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Growth in Australian Gambling Expenditure

1987/88: $45 B

1997/98: $115 B


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Expenditure by Type of Gambling Activity

Gaming machine & casino shares 72% of total, grow by 190%

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IGA2001 Benefit-Cost Analysis Framework

CBA of IGA2001

“Without” Path

“With” Path

Opportunity Cost of IGA2001

Externalities of IGA2001

Benefit of IGA2001

Cost to Implement IGA2001



Social Impact of IGA2001Implementation in & outside Gambling Industries


“Without” Case

Positive Impact

Negative Impact

Net Social Impact

Net Benefit or Cost of IGA2001 in 2003

Net Benefit/cost of IGA2001 in Perspective

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Net Impact Measurement Framework

Positive Impact




Negative Impact




ABCD: Gambling Industry

CDEF: Internet Industry

CD: Internet Gambling

  • What we want to measure: C – D

  • How we measure: C – D = (A+C-A) – (B+D-B)

    • A+C-A: Positive Impact

      • A+C: “Without” Case

      • A: “With” Case

    • B+D-B: Negative Impact

      • B+D: “Without” Case

      • B: “With” Case

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Positive Social Impactsof IGA2001 Implementation

  • Consumer Surplus

  • Taxation Effect

  • Adjustment for Problem Gamblers

  • Adjustment for Problem Gamblers with Taxation

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Negative Social Impact of IGA2001 Implementation

Tangible Cost -

  • financial costs (bankruptcy)

  • productivity loss

  • job change loss (income, job replacement)

  • crime and legal cost (police, court, jail sentences)

  • Problem gamblers treatment costs

  • loss of online gambling revenue

  • additional legal cost on illegal website

    Intangible costs –

  • Personal and family cost (distress, relationship break-up, depression, etc)

  • Diminish people’s enjoyment benefits