Lottery-betting sites including Lottoland's are now banned in Australia

“This will protect Australia from synthetic lotteries and will bring important new consumer protections by closing the loophole that lotto betting sites have been operating out of,” said Adam Joy, chief executive of the Australian Lottery and Newsagents Association, in celebration of the passage of a bill last Friday that marks a win for lottery-selling newsagents and their campaign against the Gibraltar-based Lottoland, on the grounds that the website has been 'hurting their small businesses and eroding millions of dollars in state lottery taxes that would otherwise have helped pay for important community services and infrastructure.'

“We now call on all synthetic lottery operators to do the right thing by Australians and cease offering these products immediately.”

Lottoland has stirred controversy since its arrival in Australia, particularly through its provocative TV advertising, and is said to have amassed a customer base of more than 650,000 active users.

Lottoland’s chief executive in Australia, Luke Brill, issued a statement saying the company was “here to stay”, also stating the prohibition on lottery-betting would not take effect until 2019. "The company is well-advanced in looking at other ways we can continue to deliver choice to the 700,000 Australians who have registered with us over the past two years," Brill confirmed.

“It is a great pity that the Senate did not give due consideration of the unintended consequences the new laws will have,” he said, “not just on our customers, but on competition and innovation.”

The bill cleared the Senate on Thursday night with bipartisan support, despite independent senator David Leyonhjelm condemning the laws as a “shameful, protectionist measure” that would “lock out a new and innovative business”.

“We should not be closing down businesses, we should be encouraging them,” he said. “I condemn this bill.”

Another newsagents’ trade group, the Newsagents Association of NSW and ACT, had also voiced opposition to the bill, arguing it would cement Tabcorp’s monopoly of lotteries in Australia.

In a speech earlier this week, Tabcorp chief executive David Attenborough issued a strong rebuke to Lottoland.

“The Victorian lottery delivers over $400 million for the funding of hospitals, and over $100 million to venues, the newsagents and convenience stores that sell lottery tickets, and that’s what the lottery is about,” he said.

“The lottery is not there to make oodles of money for the operator, it’s there to drive returns to the community as well, but Lottoland paid zero tax and actually gave nothing back to the Victorian community at all.”

Investment banks are predicting the ban on so-called “synthetic” lottery websites will provide a significant boost for Tabcorp. Gaming analysts from UBS called the new legislation an “incremental positive”, given the danger of Tatts lottery sales facing “pressure from competing offshore lottery products”, while Morgan Stanley said the bill paved the way for “higher growth potential”.