Two-up, a traditional Australian gambling game, is played at The Greenroof Hotel in Newcastle, Australia on April 25, 2025. Roni Bintang/Getty Images
A leading health charity, representing the Charity Lotteries Alliance, says “shadow lotteries” are draining about $61 million a year of potential revenue.
Shadow lotteries refer to unregulated rewards clubs or foreign-matched lotteries that operate outside current laws.
Andrew Thomas, chief executive of the Mater Foundation, told the Senate Environment and Communications Legislation Committee that the Alliance supported the Interactive Gambling Amendment (Gambling Reform) Bill that aims to bring shadow lottery under control.
Mater—which operates 12 hospitals across Queensland, including Australia’s busiest maternity hospital—has been running its own lottery for 72 years and is also the beneficiary of Australian-regulated lotteries.
Thomas said most trade promotions were legitimate.
The Alliance’s concern was with a narrow but growing category of for-profit services that operate, in substance, as lotteries while being marketed as trade promotions, often through subscription memberships or rewards clubs.
Shadow lotteries end up diverting money that would otherwise go to Alliance organisations like Surf Life Saving Australia, the RSPCA, MS Queensland, Deaf Connect, art unions, and the Hospital Research Foundation.
These groups are frequently seen in shopping centres conducting raffles to raise funds.
Digital marketing costs were also rising because some operators are advertising under the “Mater” term online, which can drive up the cost of the ad.
Further, supporters have started to question whether they can actually win Mater prizes, after media reports of people entering competitions and not receiving their prizes.
“The emergence of online shadow lotteries has cost registered charities more than $61.6 million in 2024, money that would have otherwise gone to providing community services for vulnerable Australians. The number of shadow lotteries and the financial pressure on registered charities continues to grow unchecked,” Thomas told the committee.
On foreign matched lotteries—online products that let Australians play entries matched to overseas draws such as U.S. Powerball—Mater’s submission said banning access was consistent with the government’s harm-minimisation agenda and would keep lottery products within domestic oversight.
Mater argued such products sat outside the purpose of Australian lotteries because they did not deliver meaningful community contributions.
The Australian Lottery and Newsagents Association, appearing at the same hearing, also backed the reforms as protecting small businesses and charities.
The federal Labor government has said genuine trade promotions and licensed charity lotteries are not the target of the changes. The committee is due to report on Aug. 17, with the reforms scheduled to commence on Jan. 1, 2027.
The government has already moved to ban Australians from using credit cards and digital currency to gamble online in an attempt to both minimise harm and redirect gambling money to legitimate onshore operators.
Last year, a study by the Australian Institute of Family Studies found 65 percent of adults had gambled at least once in the previous year, up from 57 percent in 2019.
