Friday, Aug. 9, 2013

Regulatory Framework Relating to Remote Gambling – UK

1. Legislative Background

Main Act governing Gaming in the UK is the Gambling Act 2005

  • S6 (ss1), ‘Gaming’ means playing a ‘Game of Chance’ for a ‘prize’.

Definition: ‘Game of Chance’ s6(2)(a) includes:

A game that involves both an element of chance and an element of skill;

  • (ii) a game that involves an element of chance that can be eliminated by superlative skill, and
  • (iii) a game that is presented as involving an element of chance.

Definition: ‘Prize’ s6(5):

means money or money’s worth, and

  • (b) includes both a prize provided by a person organising gaming and winning of money staked.

The issue of whether poker is as game of skill or chance was discussed in R v Kelly[1] where the Court of Appeal ruled that because poker was a game that involved elements of luck as well as elements of skill it came under the restrictions of gaming legislation – and needed to be licenced in order to be played in poker clubs.

Therefore, under the UK Act, poker falls under the category of gaming under a ‘game of chance’

Further Analysis

2. Sections within the Act pertaining to ‘Advertising’:

s331 (ss1): A person commits an offence if he ‘advertises’ ‘foreign gambling’ other than a lottery.

Other than lottery includes online poker.

  • Definition: ‘Advertisings327 (ss1): Does anything to encourage one or more persons to take advantage (whether directly or through an agent) of facilities for gambling.  Also covers bringing information about gambling facilities to people’s attention with a view to increasing the use of those facilities.
  • Definition: Foreign Gambling s331 (ss2)(b): Remote gambling none of the arrangements for which are subject to the law about gambling of an ‘EEA State.
    • Definition: ‘EEA State’, s353 (ss1): A State which is a contracting party to the Agreement on the European Economic Area signed at Oporto on 2nd May 1992 which includes EU Members States along with Norway, Iceland, Liechtenstein. Gibraltar (ss3) is treated as part of the EEA for the purposes of this Act.

3. Advertising Regulations

Territorial Application: Non-Remote Advertising (s332)

The prohibition relating to advertising foreign gambling applies to anything in the way of advertising which is done (ss2)–

  • wholly or party in the UK, and
  • (b) otherwise than by way of remote communication.

For example, where an advertisement is printed outside the UK but distributed in the UK, it may be said that a sufficient ‘part’ of the overall advertising has taken place within the UK such that the offence will arise.

Territorial Application: Remote Advertising (s333)

The prohibition relating to advertising foreign gambling applies to advertising by way of ‘Remote Communication’ (s4)(ss2) only if the advertising involves:

  • a) providing information, by whatever means (and whether or not using remote communication) intended to come to the attention of one or more persons in Great Britain,
  • b) sending a communication intended to come to the attention of one or more persons in Great Britain,
  • c) making data available with a view to its being accessed by one or more persons in Great Britain, or
  • d) making data available in circumstances such that it is likely to be accessed by one or more persons in Great Britain.

Definition: Remote Communication s4(ss2):

  • a) the internet,
  • b) telephone,
  • c) television,
  • d) radio, or
  • e) any other kind of electronic or other technology for facilitating communication.

General principle: As long as the operator is based within a ‘EEA State’, operators would be allowed to advertise within UK without committing an offence (s351, ss5).

The UK ‘White List’ was approved in August 2007 by the DCSM and Gambling Commission of which the  Isle of Man was included. Other ‘White List’ jurisdictions include Tasmania, Aldernay, Barbados and Antigua.

Conclusion Under Present Law

Being part of the ‘White List’ would allow the client and affiliates based in the Isle of Man to advertise online poker on British television, radio, newspapers, magazines, public transport in the UK.

4. Tax Status

There are no UK tax implications by obtaining a licence registered outside the UK

5. Proposals for Future Law and Developments

22 March 2010 Consultation on the Regulatory Future of Remote Gambling in Great Britain

UK announced that it would be introducing a licencing regime for operators to transact with British consumers and advertise in the UK.

White-listed jurisdictions would remain a part of any future regulatory system but would require operators to obtain an UK licence.

Alexandre Rotenberg & Simon Dehaney LLB, LPC

[1] [2008] 2 All ER 840