The Australian coalition government's hostile attitude toward online gambling is about to reap the whirlwind, says Gartner Group research director Joe Sweeney.
Huge overseas operators such as the U.K.'s William Hill group are poised to move into Asia-Pacific.
"We are talking about operators who individually are larger than the entire Australian online gaming industry", says Sweeney.
They view pending legislation to bar Australian-based cyber-casinos from catering to Australians as creating "the perfect market environment where they don't face any competition from local players.
"It will mean tens of millions of dollars will be leaving Australia via online channels. We are still trying to put a figure on how much will be lost to Australian taxpayers if this ban goes through."
Much of the money is destined for the coffers of U.K. cyber-casinos which are enjoying boom times operating from the economic free trade zone of the Channel Islands.
Sweeney, who tracks online gaming trends in the region for Gartner, was speaking at the group's two-day e-commerce conference in Sydney.
Reports that the Packer business empire will shift its cyber-casino from Tasmania to Vanuatu's lower tax regime is a typical commercial reaction to a hostile government environment, Sweeney said.
Australian cyber-casinos banned from serving domestic players will be able to deliver their products to offshore customers but "it is a nightmare to work in that kind of regime.
"The killer is the tax dimension on top of that."
Sweeney predicts a government ban will deliver even worse outcomes from a social engineering point of view.
Problem gamblers will basically disappear off government radar screens in terms of the ability to measure who they are and how many there are.
They will spend their money with small pirate sites who have no incentive to cooperate with government policy makers.
Or they will go to legitimate overseas sites in jurisdictions where privacy laws make it difficult to pass information back to Australian authorities.
In addition, traffic flows to cyber-casinos from associated sites such as adult sites can't be measured by government monitors.
"Basically, they can move in under the government radar screen and government loses the ability to collect statistics that define the scope of the problem.
"It will look like it has disappeared but it will still be there and probably three or four times bigger."