PBL already owns the Crown Casino resort in Melbourne, acquired for A$1.6bn in 1998, and which generated more than $1 billion in revenue in the last financial year, contributing A$120m to PBL profits for the six months to December 2000.

Last year PBL and Packer's other listed company, Ecorp, secured one of five online gaming licences being offered by the Tasmanian Government, shortly before the Federal Government slapped a 'moratorium' on the issue of new on-line licenses pending its new legislation. Besides Tasmania, Queensland, the Northern Territory, ACT and Norfolk Island had all started to grant licences to operators wanting to run online casinos. Victoria had also made plans to issue licenses.

In the expectation that Federal legislation would ban Australians from gambling on domestic sites, the Tasmanian venture (called Crown.com) is expected to focus mainly on the lucrative Asian market. Now PBL has said that in order to protect its existing gaming revenue (which would be threatened if competitive operators targeted its Australian customers from offshore) it will set up its own offshore on-line ventures.

Australia's uncertain regulatory environment has prompted PBL to investigate each of the world's 54 on-line gambling jurisdictions. "The Internet gaming team has been looking at locations in Vanuatu for some time as we've watched the Australian Federal legislation on Internet gaming," a senior PBL executive confirmed. "There has been no final decision, but that is certainly the most likely destination."

The Federal Government has been widely criticised for the bill, which will need the support of at least three Democrats to pass the Senate. In a split in the party's ranks, two senators - John Woodley and Lyn Allison - indicated in a recent report on the Government Bill that they would vote against the Democrats' leader, Senator Natasha Stott Despoja, and support the Government's ban. The fate of the Government's proposed ban rests with those Democrats yet to indicate which way they will vote, including senators Andrew Murray, Aden Ridgeway and the party's former leader, Meg Lees.

In their minority report on the Bill, the pair said they believed that although Australians under the proposed law would be able to gain access to offshore Internet gambling sites, they would be less inclined to do so knowing there were likely to be fewer consumer safeguards in place.

Vanuatu, which is four hours by air from Australia, imposes a 2.5 per cent tax on online gaming revenue. A licence costs $US75,000 (A$144,000), which is trivial beside the A$10m PBL has already invested in building its on-line gaming platform, and the A$50m it's estimated the on-line casino will could make in its first year of operation. The general manager of gaming and wagering with Ecorp/PBL Gaming, Wayne Jones, said the system, developed at PBL's Crown casino in Melbourne, would show wins and losses and playing times. All wins would be paid in non-negotiable cheques. Paybacks into credit card accounts would be banned.

PBL is also considering establishing a casino off Taiwan should its government legalise casinos, as is expected in July.