GPWA Times Magazine - Issue 13 - June 2010

The online gambling industry loves the current British regulatorymodel. But the British government has become unhappy with it, and is looking tomake changes. InApril of 2009,Minister of Sport Gerry Sutcliffe asked the Department of Cul- ture, Media and Sport (DCMS) to assess the performance of remote gambling regulations and suggest changes. Theun- derpinnings of the government’s unhap- piness were clearly outlined in a DCMS consultation report released in March and included: Lackof consumerprotections. Increase in complaints from Britishbettors. No requirement for overseas ju- risdictions to report suspicious bettingpatterns. OtherEUnations (e.g., France, Italy) rejectinga singlemarket approachandadoptingana- tional licensing system. Most casinos accessedbyBritish consumerswerenot licensed in theU.K. Manyoperatorswhowere licensed inBritainhavemoved overseas. Fear that emergingEuropean jurisdictionswill be lightly regulated. The inability to collect fees from offshoregambling sites for the Britishhorse racing industry. The lack of consumer protections appeared tobe thebiggest concern for legislators andDCMS. “The Commission does not, of course, have a monopoly on good regulation – most, if not all, sites targeting British consumers will be subject to some form of regulation in their home jurisdiction – therearedifferent regulatory standards and approaches,” the report reads. “Con- sumers therefore may experience vary- ing levels of protection depending upon whichoperator theydealwith. “The Commission receives many enqui- ries from British consumers about gam- bling activity licensed offshore. There have been enquiries in relation to social responsibility (for example, where con- sumers have been unable to self exclude fromwebsites) andunfairness (for exam- ple, where winnings are not paid out or − − − − − − − − where complaints havenot been satisfac- torily dealt with). However, as the Com- mission does not regulate these opera- tors, they can only refer enquirers to the regulator in the originating jurisdiction and cannot investigate the complaints or followup todeterminewhether the issues goon tobe resolved. “These enquiries giveus ageneral indica- torof thecommonproblems that exist for Britishconsumersand indicate that some people are unaware that they are gam- blingonanoverseas licensedwebsiteand arenot protectedbyBritish law.” The seconddriving forcebehind thepush for changes is the sheer lack of operators who choose to be licensed in Great Brit- ain, and the revenue lost because opera- tors are stayingaway. “It is estimated that there are currently between 2000-2500 gambling websites worldwide,” the report reads. “The Com- mission currently has approximately 150 remote licensees that can offer internet betting, casino or bingo. Of these, fewer than 100 are active, consisting of some large betting operators but mainly small betting operators. The Commission’s industry statistics paper for 2008 gives the remote sector’s gross gambling yield (GGY) at approximately £890 million with approximately £850 million gener- ated from remote betting operations and the remaining£40millionGGY from ca- sino, bingoandother gamblingproducts. “Inaddition toadhering toBritishregula- tory requirementsandcontributing to re- search, education and treatment of prob- lem gambling in the U.K., U.K.-based operatorsalsopaytaxontheirbettingand gaming revenue. Licensed remotebetting operators are also required to contribute 10 percent of their gross profits towards supporting the British Horseracing In- dustryvia theHorseraceBettingLevy.” TheDCMS solution to these prob- lems is to “introduce the need to obtain a licence to transact with British consumers andadvertise in theU.K.” “This is the Government’s pre- ferred option,” the report reads. “Under this optionwewould need to amend the Act and introduce a requirement for operators li- censed inEEAmember states and Gibraltar to obtain a licence from the Commission to permit them to transact with British consum- ers and/or advertise in the U.K. This would therefore apply to all operators who want to operate in the British market, irrespective of whether they want to advertise their servicesornot. “Operators would be required to demonstrate their ability to meet andadhere to theprovisions of the Act, its secondary legislation and the Commission’s requirements in order to be permitted to transact with and/or advertise toBritish consumers.” DCMS also wants to develop a more streamlined white listing process for ju- risdictions outside the European Eco- nomic Area. But online gaming proper- ties licensed in awhite listed jurisdiction wouldstillhave toreceiveaBritish license toacceptBritishplayers. At press time, the results of the general elections in theU.K.werenotknown.But the Tories have been unhappy with the Gambling Act for some time. Andwith a new regulatory scheme being pushed by theLaborParty, it’s likely thatnewonline gambling regulations similar towhat’s in the consultationpaper areon theway. “Theproblemwiththe Frenchbill isthat it is ladenwithrulesand regulationsthat inreality makethingsextremely difficultforforeign competitorstoenterthe marketsuccessfully.” –Ari Last,Right2Bet 72 France and the U.K take a second look at their gambling laws