New-gambing-legislation

A guide to the new gambling regulations and the consequences for match-fixing

Gambling is big business in the United Kingdom. Online alone the industry is worth £2billion[1] and a large portion of that figure is taken up by sports like horse racing and football. It is certainly a lucrative market which means it might not come as such a surprise that regulations need to be tight to prevent abuse. From the 1st November 2014 the Gambling (Licensing and Advertising) Act will come into effect which will see a change in how betting companies are licensed. 

The-previous-law

The licensing and regulation of gambling companies is done through the Gambling Commission which was set up under the Gambling Act 2005[2]. Any company wishing to operate gambling facilities in the United Kingdom needed to apply for a license[3], which includes companies wanting to operate online gambling facilities (known as ‘remote gambling’)[4]. Arguably one of the biggest issues with this particular piece of legislation is that betting companies who operate remote gambling facilities outside of the UK but provide their services to the UK market were under no obligation to obtain a license. This was because the legislation allowed betting companies who did not have ‘remote gambling equipment’ situated in the UK to be free of licensing[5].

For clarity purposes it is worth, briefly, describing exactly what constitutes remote gambling equipment. Remote gambling equipment refers to, but is not exclusive to, webpages that display virtual events and games, records of an individual’s gambling transaction and the generation of random data to be used by games/events[6].

The issue lies in that remote gambling equipment in in reference to the context of gambling on virtual games rather than real events like football for example. Therefore companies for example who offer gambling services exclusively to sporting events and are based outside of the UK are completely free of licensing rules. This creates a dangerous situation for sport as it is the perfect breeding ground for match-fixing.

The-new-law

The Gambling (Licensing and Advertising) Act 2014 comes into force on the 1st November 2014. It is not designed to wholly repeal the Gambling Act 2005 but instead make changes to the areas discussed above. It provides more consistency as now any gambling company whose services are available to UK customers, regardless of whether equipment is not in the UK, now must be licensed by the Gambling Commission[7]. This license must also be held should companies wish to advertise their services in the UK[8].

Consideration needs to be given to which services are available to UK customers. The statute establishes that services are being offered if “facilities are or will be capable of being used there[9]. Gambling companies need to hold a reasonable opinion that there services are not accessible to any member of the public in the UK should they choose not to be licensed.

The-consequences-for-sport

It is assumed that these changes to the law will aid in combatting match-fixing in sport. Licensed gambling companies, under the Licensing Conditions and Codes of Practice, are accountable for reporting all incidents of suspicious betting activity[10]. Therefore an increase in companies that are regulated means, in an ideal world, authorities can be alerted and take appropriate action. Some critics have argued that these measures will simply push match-fixing further underground where regulation is non-existent. The question that also must be asked is whether the Gambling Commission and crime agencies have sufficient resources to regulate companies across the globe. Naturally it is early in the process so we will have to wait and see what results come of this statute.

Controversy

The new statute hasn’t gone down well with everyone. It was subject to a judicial review which was instigated by the Gibraltar Betting & Gaming Commission[11]. The Gibraltar Betting and Gaming Commission cited concerns with how the Gambling Commission would be able to regulate outside of Britain, essentially relying on the argument raised above. They also cited that the legislation would infringe the right to provide services under the Treaty on the Functioning of the European Union (‘TFEU’)[12]. The court disagreed that there was infringement and held that the new laws were in place to serve legitimate objectives.

It may seem strange that this particular body is concerned as to how far the Gambling Commission’s resources will go but bear in mind that under this new law Gibraltarian gambling companies (among others) will be forced to pay gambling related taxes. Such an act isn’t really in their best interests.


References

[1] Addiction soars as online gambling hits £2bn mark – The Independent

[2] s.20, Gambling Act 2005

[3] s.65, Gambling Act 2005

[4] s.67, Gambling Act 2005

[5] s.36, Gambling Act 2005

[6] Remote Gambling Equipment: Advice note – Gambling Commission

[7] s.1, Gambling (Licensing and Advertising) Act 2014

[8] s.4, Gambling (Licensing and Advertising) Act 2014

[9] s.4(3)(b)(ii), Gambling (Licensing and Advertising) Act 2014

[10] s.15.1.1, Licence conditions and codes of practice – Gambling Commission

[11] Gibraltar Betting & Gaming Association Ltd v The Secretary of State for Culture, Media & Sport and another [2014] WLR(D) 421

[12] Article 56, TFEU

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