New South Wales state government is backing local newsagents with a clampdown on online bookmakers, including Lottoland, who take bets on lottery outcomes, a business sometimes referred to as “synthetic lotteries”. 

Lottoland has swept through most of Australia since getting a foot in the gambling door in 2015, posting a profit of $2.2 million last year.

That figure is expected to exponentially increase as their footprint continues to grow, particularly after they were granted a financial services license from Gibraltar regulators last week to operate as an insurer.

Lottoland does not actually conduct a lottery, nor does it supply any lottery tickets, rather, gamblers bets on the outcome of lotteries conducted by third parties, the problem however, is that Lottoland aren’t subject to the same tax regulations as the Australian based lottery retailers.

Inverell newsagent, Councillor Anthony Michael, said that the problem is not only that they are taking business away from traditional newsagents. “The profits are not going back into the community through taxation but are going offshore,” says Cr Michael. 

“I have two newsagencies in Inverell, however it is hard to keep them both afloat,” says Michael. He points to numerous problems plaguing the industry, such as the decision to also sell newspapers at supermarkets and the drop in lottery sales.

Cr Michael has not noticed a huge difference in local lottery sales yet, but there is still a problem that is becoming more prominent. 

Northern Tablelands MP Adam Marshall says that the “synthetic operations” appear to be legitimate lotteries, however consumers are betting on the outcome of a lottery that often occurs overseas. “A domestic lottery has a guaranteed prize pool, with revenue from unsuccessful picks going into the next round. However, synthetic lotteries may be paid out by an insurer – with failed bets heading straight to the company’s coffers,” says Mr Marshall.

“It’s also having a marked impact on the local economy. I’ve spoken with several of our region’s newsagents concerned about the loss of trade – all small, local businesses that are losing revenue to gargantuan foreign companies,” says Mr Marshall.

“I don’t support lottery charlatans like Lottoland. These companies take people’s money without any consumer protections, don’t put anything back into NSW and threaten the viability of our local newsagents.”

Last year traditional lotteries delivered an estimated $1.6 billion in taxes across Australia.

Recently, Tatts launched a nationwide Lottoland’s Gotta Go marketing campaign, and are calling on state and federal governments to step in and force the company to cease trading, while other stakeholders have called for a point of consumption tax across all digital betting.