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New rules on remote gambling set to come into force

Organisations which provide or advertise remote gambling facilities in Great Britain must now be licensed by the Gambling Commission regardless of where those organisations are based in the world, under new rules that come into force tomorrow.31 Oct 2014

The requirement is set out in the Gambling (Licensing and Advertising) Act. The Act was passed in the UK parliament earlier this year. The provisions take effect on 1 November.

Under this new 'point of consumption' regime, it is an offence to provide or advertise facilities for remote gambling without a Commission licence if you know or should know that the facilities are used, or are likely to be used, in Great Britain.

The reforms under the Act mean that gambling operators based outside Great Britain but targeting remote gambling services or advertising at consumers in Britain must now hold a Commission licence to carry out that activity legally, as well as complying with the licensing conditions and codes of practice attached to the licence.

The Commission has been issuing licences this week to offshore operators currently trading in Great Britain who applied for licences by the deadline – originally 16 September, and extended to 23 October. Where the Commission has not completed its review of the application, it is issuing a 'continuation' or temporary licence which entitles the operator to continue trading until the Commission has decided whether to accept or reject the application.

In total, 170 applications for continuation licences were granted by the Commission, a spokesperson told Out-Law.com. Out-Law asked the Commission to disclose the total number of applications it has received for a full licence under the new regime and how many it has processed to-date, but was not been provided with an answer to the query.

"All operators granted a continuation licence will have been told they have a continuation licence," the spokesperson said.

"For offshore operators who successfully obtained licences from the Commission, the real work of compliance starts now," gambling law expert Audrey Ferrie of Pinsent Masons, the law firm behind Out-Law.com, said.

The Committee of Advertising Practice (CAP) issued a notice to marketers that outlined the implications of the new Act for the enforcement of wider rules on advertising.

"From 1 November 2014 only gambling operators licensed by the Gambling Commission will be permitted to advertise to consumers in Great Britain or provide them with remote gambling facilities," CAP said. "If a gambling operator is licensed, and the ASA (Advertising Standards Authority) receives a complaint about one of their ads, then it would continue to assess the complaint made, provided the ad objected to falls within the scope of the CAP or BCAP Code.  However, if it were to receive a complaint about an ad from an operator who is unlicensed, the ASA would simply refer the operator to the Gambling Commission, as they would be breaking the law."

"In order to demonstrate whether they’re licensed, operators should provide a link to their licensed status with the Gambling Commission on all pages that are used to access gambling services.  The Commission’s register of licensed operators can also be accessed to ascertain whether the operator has a licence or not. The change will affect not only gambling operators but also those who carry advertising such as broadcasters, publishers and sports clubs," it said.

However, the Gambling Commission previously explained that it is unlikely to issue 'advertising only' licences. Businesses are only likely to obtain a licence to advertise remote gambling services in Great Britain if they provide those services to British consumers too, it said.

Sports law specialist James Earl of Pinsent Masons previously warned about the potential implications of the Commission's approach for football club funding in England.

The Gambling (Licensing and Advertising) Act is being introduced alongside a raft of changes to licensing conditions that remote gambling operators now have to adhere to. Further changes to the gambling software licensing regime will take effect on 31 March 2015.

The Act survived a legal challenge brought by the Gibraltar Betting and Gaming Association (GBGA) earlier in the autumn.

The GBGA has, though, launched another legal challenge against separate UK government plans to introduce a 15% levy on remote gaming and betting activities carried out with a 'UK person'. Those plans are contained in the Finance Act and are scheduled to take effect on 1 December.