FORMER New South Wales Premier Barry O'Farrell will lead an Abbott government review of the $1.6 billion online gambling industry.
Social Services Minister Scott Morrison announced the review on Monday in light of reports that 60% of the online industry's revenue was going offshore.
He said unlike the Australian industry, offshore firms running betting agencies did not contribute to racing or sports bodies, and "do not comply with Australia's legal system".
While many offshore operators have long sought Australian punters, loop-holes in current laws have meant authorities have struggled to regulate those firms.
Mr Morrison said aside from economic issues, some 400,000 Australians, mainly men, had gambling problems, which affected social services and could contribute to domestic violence.
"I have deliberately left the terms of reference broad to ensure former premier O'Farrell can look at everything he needs to, with no preconceived notions," he said.
Mr Morrison said Mr O'Farrell was expected to report his findings in mid-December this year.
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