News: DCMS to consultant on licensing overseas on-line gambling operators
- Date: 08/01/2010
- Source: Poppleston Allen
- Author/Solicitor: Nick Arron
The DCMS yesterday announced they will be consulting on changes to the current structure of remote gambling regulation in Britain so that all operators who target British customers must be licensed by the Gambling Commission.
Currently only those remote gambling operators based here in the UK must be licensed by the Gambling Commission. Due to the unfavourable tax regime few remote gambling operators actually base their businesses here. Indeed, some well known UK operators have their on-line businesses offshore for this reason. Many of the popular gambling websites are not currently licensed by the Gambling Commission but based in and regulated by foreign jurisdictions. The most popular jurisdictions for gambling operators include the Isle of Man, Alderney, Malta and Gibraltar and these countries together with Antigua and Barbuda, Tasmania and all states of the EEA have been approved by the Government and included on a white list of countries whose operators are able to advertise in Great Britain. The proposed changes are likely to retain the white list and add the requirement that all on-line gambling firms accessed by UK residents also have to be licensed by the Commission. Sport sponsorship falls within the definition of advertising gambling and operators sponsoring teams and events will have to be licensed as well as those using TV and traditional forms of advertising.
The announcement follows a review undertaken by the DCMS on remote gambling regulations focusing on consumer protection and on how overseas operators can be made to contribute towards regulation, problem gambling treatment and the horse race betting levy.
Extending the licensing regime to include offshore operators will ensure that all gambling websites used by UK consumers meet the standards of UK legislation and the Gambling Commission. Operators would be required to adhere to the three licensing objectives, being; the prevention of crime and disorder, the fair and open provisions, and the protection of children and other vulnerable persons from harm or exploitation by gambling. Offshore operators would be obliged to report suspicious betting activity to both the Commission and UK Sport's Bodies and comply with the Commission's software testing, age verification, self exclusion, technical standards and social responsibility requirements. This will lead to a more consistent level of protection for British consumers. It will place foreign operators on a level playing field to British operators already licensed by the Commission.
It remains to be seen how the DCMS propose to police an extended licensing system. There are obvious practical and financial issues of regulating a gambling operator based in Cyprus or Antigua. I am sure there will not be a shortage of Gambling Commission officers volunteering themselves for compliance visits!
Taxation, although playing a large role in the decisions of operators on where to base their businesses, will not be included within the consultation. However, the DCMS will be exploring the application of the horse race betting levy to overseas and operators with the intention of ensuring that all operators taking bets on British races pay to support British Horse Racing. I am sure that this will be welcomed by the UK betting industry.
A full copy of the Minister for Sport Jerry Sutcliffe's ministerial statement on the consultation can be found at http://www.culture.gov.uk/reference_library/media_releases/6562.aspx
There was no indication on when the consultation will be published.
For more information please contact Nick Arron
