Bookmakers are looking for clarity on how to offer betting products which comply with outdated legal regulations. Photo: Phil Carrick

Canberra has been forced into a fresh review of the Interactive Gambling Act because outdated laws have been rendered too ambiguous for new forms of controversial sports betting via smart phones and online poker services.

Social Services Minister Scott Morrison will take control of the review given he holds responsibility for overall gambling regulation despite the IGA falling within the remit of Communications Minister Malcolm Turnbull, according to sources close to the review.

The review of the act, which was created in 2001, will canvass opinion from gaming operators, betting agencies and gambling help authorities and is expected before year-end.

"The minister notes the speculation," a spokesman for Mr Morrison told Fairfax Media. "The government will make an announcement on such matters when they are determined."

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It is likely to ignite existing tensions within the wagering industry over the different approaches companies are taking to new digital technologies.

William Hill along with another British rival Bet365 have been operating the controversial in-play betting system for several months, which allows punters to bet live on sports via their smart phones.

Punters in Australia can bet on the outcome of an event after it has begun, but only via the telephone or in person. Such 'in-play' betting is outlawed on online platforms, including smart phones.

However, companies like William Hill claim that so long as punters keep their smart phone microphone on it still adheres to the rule that live bets during sporting events are made by phone only.

The Australian Wagering Council, whose members include William Hill and Bet365, is in favour of online in-play betting.

It argues that by making the practice legal it will bring Australian operators in line with more than 2300 offshore operators who illegally offer the product to Australian punters.

"The IGA should be amended to clarify that in-play wagering on sporting events will continue to be permitted, and on a platform-neutral basis, but restricted to the circumstances in which bet types are authorised by the relevant state/territory regulator and the relevant national sports controlling body," an AWC spokeswoman said.

But the legality of operating online betting remains unclear. British rival Ladbrokes withdrew its in-play betting service in July following complaints to the Australian Communications and Media Authority; and William Hill, headed locally by Tom Waterhouse, may face an investigation by the Australian Federal Police following a similar referral.

Industry heavyweight Tabcorp said a review of the IGA is overdue.

"The rise of unlicensed offshore betting on Australian racing and sport needs to be addressed," Tabcorp said in a statement on Tuesday. "Unlicensed offshore operators are not regulated to Australian standards and that poses risks to consumers and the integrity of sport and racing. It also means revenue that would otherwise be returned to the Australian racing industry and governments is instead going to unlicensed offshore operators."

The review will also examine laws around online casino betting, currently illegal but also openly available given the number of offshore companies operating in the sector.

A 2013 review into the Interactive Gambling Act actually recommended online "in-play" betting on the ­outcome of a match be allowed. However, the recommendation did not progress at a state level.