Sports Betting in the United KingdomSports Betting in the United Kingdom

Alan Littler – a.d.littler@uvt.nlTilburg Law and Economics Center (TILEC) & Faculty of Law,

Tilburg University, The Netherlands

Symposium Glücksspiel 2010

Forschungsstelle Glücksspiel, Universität Hohenheim, Stuttgart11 und 12 März 2010

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OverviewOverview

• Architecture of UK gambling regulation• Gambling Act

– Objectives– Forms of gambling – Betting– Non-remote v. Remote Gambling– Licence Types– Licence Conditions & Codes of Practice– Duty to Report Suspicion of Offences

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Architecture of UK gambling regulationArchitecture of UK gambling regulation

• Gambling Act 2005:– Geographically covers Great Britain, comments do not

relate to Northern Ireland (nor Isle of Man, Jersey, Guernsey and Alderney)

– Regulates all forms of gambling, except:• s. 15 - National Lottery >> National Lottery Act 1993

and subsequent amendments (National Lottery Commission)

• s. 10(1) - Spread-betting >> Financial Services and Markets Act 2000 (Financial Services Authority)

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Architecture of UK gambling regulationArchitecture of UK gambling regulation

• Regulatory bodies:– Gambling Commission

• Independent non-departmental public body• www.gamblingcommission.gov.uk

– Department of Culture, Media & Sport (DCMS) (Secretary of State for Culture, Media & Sport)

– Local authoritiesAll references in subsequent slides are to the Gambling Act 2005, unless stated otherwise

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ObjectivesObjectives

• s.1 ‘The licensing objectives’:– “(a) preventing gambling from being a source

of crime or disorder, being associated with crime or disorder or being used to support crime,

– (b) ensuring that gambling is conducted in a fair and open way, and

– (c) protecting children and other vulnerable persons from being harmed or exploited by gambling”

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Forms of GamblingForms of Gambling

Categories of gambling created by the Act:– 3 forms:

• Gaming• Gaming and ‘games of chance’, s.6• Casino gaming, s.7• Equal chance gaming, s.8

• Betting, s. 9 to s. 13• Participating in a lottery, s. 14 & 15

– Gaming machines – are ‘facilities for gambling’ (s.5); different categories of machine, regulation in terms of quantity of each category permitted in different categories of venue (s. 172 & s. 236)

– Poker – as a casino game or under the exemption for private gaming, s. 296

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BettingBetting

Betting - general, s.9:• s. 9(1):

“(a) the outcome of a race, competition or other event or process,(b) the likelihood of anything occurring or not occurring, or(c) whether anything is or is not true”– Bets may be placed where the outcome of a race, competition, event,

or process has already occurred or been completed, and where oneparty knows the outcome (s. 9(2))

– Same applies where transaction relates to an event occurring or not occurring (s. 9(3))

• Betting not limited to sports events, limits of what is permitted not clearly defined– Whether it snows on Christmas Day– Advertisement in 2008 for betting on which airline would be the next

to go into administration – banned by advertising regulator

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BettingBetting

Other forms of betting:• Spread betting – excluded, s.10• Betting – prize competitions, s.11

– Player required to guess matters given in s. 9(1)(a) to (c), pay to participate, and if guesses accurately wins a prize or is entered into a class among whom one or more members are allocated prizes (by chance or otherwise)

– Prize may be money, goods or services (s. 11(4)(b))• Pool betting, s.12

– Where all or part of winnings are determined by reference to total of stakes paid (or due to be paid) and divided amongst the winners

• Betting intermediary, s.13– Someone who provides a service to facilitate the making or

acceptance of bets between other parties (s. 13(1))

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NonNon--remote v. Remote Gamblingremote v. Remote Gambling

• Remote gambling includes ‘internet gambling’ with software generated content and ‘online gambling’ i.e. content generated offline but participation online, including sports-betting

• s. 4(1) – remote gambling is gambling in which a means of ‘remote communication’ is used to enable participation, s. 4(2) refers to the internet, telephone, television, radio and ‘any other kind of electronic or other technology for facilitating communication’

• Same set of objectives applies as to offline gambling• Specific requirements set out in licence conditions and codes

of practice, attached to licences for remote operations

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NonNon--remote v. Remote Gamblingremote v. Remote Gambling

• No requirement to have an offline presence to get a licence for remote gambling• Single piece of equipment within GB will make operator amenable to regime of

the 2005 Act (s. 36(3))• UK (inc. Northern Ireland) domestic market open to all licensed operators (s.

33(1)):– Both in terms of ‘active’ and ‘passive’ supply– Only those located within the EEA or in ‘white listed’ jurisdictions may

advertise their (sports-betting) services in GB (s. 331(2) & (4))• Cross-border oversight?

– No assessment of regulatory requirements in other EU MS– Openness not reciprocated by other EU systems– Offence to invite or enable participation in remote gambling to those in

‘prohibited territories’ (s. 44); no EU Member States have been classified as such by Secretary of State

– Forthcoming consultation on whether to require all operators serving the UK market to comply with requirements of the Act

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Licence TypesLicence Types

• An offence is committed if a person provides facilities for gambling (s. 33(1)), unless they hold an operating licence and comply with the terms and conditions thereof (s. 33(2)(a) & (b)), except if a specific exemption applies

• Persons providing ‘facilities for gambling’ must have a licence. The concept of ‘facilitates’ covers (s. 5(1)(a) to (c)):– Inviting others to gamble– Providing, operating or administering arrangements for

gambling by others– Participating in the operation or administration of

gambling by others

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Licence TypesLicence Types

• 3 licence types:– Operating licence– Personal licence– Premise licence (not required for remote

gambling)

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Licence TypesLicence Types

Operating licence (Part 5 of the Gambling Act 2005)• s. 65 details the types of operating licences,

including:– (2)(c) general betting operating licence– (2)(d) pool betting operating licence– (2)(e) betting intermediary licence

• s. 67 establishes ‘remote operating licences’ for activities carried on ‘in respect of remote gambling’or ‘by means of remote communication’

Licence TypesLicence Types

• s. 68 provides for combined licences:– s. 68(3)(a) – allows casino operators to offer betting

• a casino operating licence will permit the holder to offer ‘betting on the outcome of a virtual game, race, competition or other event or process’

– s. 68(4) – allows bookmakers to offer bets on virtual races• a general betting licence authorises the holder ‘to

provide facilities for betting on the outcome of a virtual race, competition or other event or process other than a game of chance’

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Licence TypesLicence Types

• Licences are either:– Non-remote; such as a bookmaker’s high street shop; or– Ancillary remote; which permit holders of non-remote

licence(s) to offer the licensed form of gambling via remote means in a limited quantity; or

– Remote;• online and internet gambling, available to all those with a

single piece of equipment in the UK (otherwise a criminal offence to supply)

• conditions can limit forms of communication permitted– Remote and non-remote licences cannot be combined but one

person can be granted both types for betting (s.67(2)) 15

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Licence TypesLicence Types

Personal licence (Part 6 of the Gambling Act 2005)• Individuals working within the gambling industry must hold such a

licence – s. 80 Discretion of the Gambling Commission to determine exactly who must hold such licences– Authorises an individual to perform management or operational

functions regarding provision of gambling facilities• Thus two forms created:

– Personal Management Licence – reflects s. 80(5) which includes directors and anyone who facilitates or ensures compliance with the conditions of the applicable operating licence

– Personal Functional Licence – reflects s. 80(6) which includes anyone with a function enabling them to exercise influence over the outcome of gambling; are involved with receiving or paying money; or hold a specific role regarding machine gaming

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Licence TypesLicence Types

Premises licences (Part 8 of the Gambling Act 2005)• Not awarded by Gambling Commission but relevant local licensing

authority• Authorises premise in question to be used for a specific form of

gambling, including ‘betting premises licence’, for;“the provision of facilities for betting, whether by making or accepting bets, by acting as a betting intermediary or by providing other facilities for the making or accepting of bets” (s. 150(1)(e))

• Award must be ‘reasonably consistent’ with licensing objectives (s. 153(1)(c)) yet the authority “may not have regard to the expected demand for the facilities which it is proposed to provide” (s. 153(2))– No scope for considering demand for services, number of venues for

betting premises left to market forces

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Licence Conditions & Codes of PracticeLicence Conditions & Codes of Practice

• Gambling Commission may specify conditions to be attached to licences (licence conditions), e.g. to all general betting operating licences – s. 75(1)– May also specify individual conditions when granting a licence to an

operator – s.77• s. 24 obliges and empowers the Commission to enact ‘codes of practice’

through which it discharges its duty to permit gambling as far as it considers is reasonably consistent with the objectives of the Gambling Act (s. 1)– The codes describe arrangements for provision of facilities for

gambling to meet said regulatory objectives (s. 24(2))– Failure to comply will not incur criminal or civil liability (s. 24(8)) yet

a code is admissible in evidence in criminal and civil proceedings and may be taken into account by the Commission (s. 24(9))

Licence Conditions & Codes of PracticeLicence Conditions & Codes of Practice• Set of conditions by which operators must abide by, divided into

– Conditions & Codes of Practice, the latter is sub-divided into• ‘Ordinary code provisions’ – generally reflect ‘good practice’• ‘Social responsibility code provisions’

• Applicable to all licensed operators are the general:– Licence Conditions and Codes of Practice (October 2008)

• Conditions - e.g. licensees offering gambling on websites must include a statement that they are licensed & regulated by the Commission and include licence number

• Codes of practice:– Ordinary – Check age of customers who appear to staff

members to be under the age of 21 years– Social responsibility - Policies and procedures to prevent

underage gambling and monitor effectiveness (non-remote)19

Licence Conditions & Codes of PracticeLicence Conditions & Codes of Practice

• Further conditions and codes relevant to specific licence type, e.g.:– Conditions and Codes of Practice applicable to: Non-remote General Betting

Licences, December 2008:• Ordinary code provision

Self-exclusion must be for a period of at least 6 months without a cooling-off period upon commencement, with a 1 day cooling-off period should the customer take positive steps to gamble again after the lapse of agreed amount of time

– Conditions and Codes of Practice applicable to: Remote General Betting Licences, December 2008:

• Social responsibility code provision‘Customer interaction’ – operator must have a policy specifying the types of player behaviour which will be logged and that could subsequently trigger customer interactionDetails procedures operators must have in place to prevent those who have self-excluded from gaining access to gambling whilst excluded

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Duty to Report Suspicion of OffencesDuty to Report Suspicion of Offences

• Condition 15.1 of the Licence Conditions & Codes of Practice:– Those who accept bets, or facilitate the making or acceptance of bets

on horse races and other sporting events governed by a sporting body scheduled to the 2005 Act (Part 3 of Schedule 6) are duty bound to report to that body if they suspect they have information which may:

• Lead to the Commission making an order to void a bet• Relate to a breach of a rule on betting applied by the relevant

sporting body. This concerns:– Cricket / Football / Tennis / Horseracing / Greyhound

racing / Golf / Rugby / Athletics – England / Wales / Scotland or UK as appropriate /

additionally Ireland regarding football