Changes to regulation of remote gambling postponed until November

Out-Law News | 26 Sep 2014 | 10:08 am | 3 min. read

Changes to the way online and other remote gambling is regulated and licensed in Great Britain will not be brought into force until at least 1 November 2014, the government has confirmed.

The new date on which the Gambling (Licensing and Advertising) Act is intended to be brought into force is a month later than the 1 October date on which the new framework was most recently scheduled to take effect.

The postponement has been caused by a legal challenge brought against the new regulatory framework being delivered by the Act and the associated changes to licensing conditions that have been formulated by the Gambling Commission.

A spokesperson for the Department for Culture, Media and Sport (DCMS) said: "We remain fully confident of our case, and of the significant benefits to consumer protection that the Act will bring. However to allow the judge to reach his judgement without undue time pressure we will be taking the necessary steps to postpone the Act coming into force for one month."

The legal challenge against the changes has been brought by the Gibraltar Betting and Gaming Association (GBGA). The GBGA represents a number of Gibraltar-based gambling operators that deliver remote gambling services to consumers in Great Britain.

Under the changes outlined in the Gambling (Licensing and Advertising) Act, businesses wishing to advertise or provide remote gambling services to consumers in Great Britain will be required to obtain a licence from the Gambling Commission to do so. The Gambling Commission has already implemented a range of changes to licensing conditions that remote gambling operators will have to adhere to under the new 'point of consumption' regime.

The GBGA has challenged the government's assertion that the changes in regulation will deliver benefits to consumers. It described the proposals as "illegitimate, disproportionate and discriminatory … and irrational" and said the plans were "designed for economic reasons: to grant UK operators a competitive advantage over those from overseas". It has said that the changes could even be detrimental to consumers in Great Britain if introduced.

Transitional arrangements for the move to the new POC framework have been in place since earlier this summer. Operators have been able to apply for a licence to operate under the new regime since the end of June but have been working on the basis that it would come into force on 1 October. 

In light of the DCMS statement, the Gambling Commission has written to legal advisers to recommend that operators get in touch with it if they have any concerns about the implications of the month's postponement on their business.

Gambling law expert Susan Biddle of Pinsent Masons, the law firm behind, assumed that the continuation licences which were to be granted on 1 October to those already licensed elsewhere in the EEA or white-listed countries who applied for new licences before the deadline of midnight on 16 September 2014, and the new licences to be granted to others whose application had been fully reviewed by the Commission by that date, would be deferred until 1 November instead, or from an even later date if implementation is further deferred.

The extension would give the Commission longer to consider the applications and so it might in fact be able to grant successful applicants definitive licences by the implementation date, without the need for interim continuation licences, she said.

Biddle said, though, that there remains a lack of clarity about what will ultimately happen to the application fees which were payable when the licence applications were submitted if the GBGA challenge is ultimately successful.

The Gambling Commission's reforms to the Licence Conditions and Codes of Practice (LCCP) affect all gambling operators. Most of the changes have been effective since 4 August 2014, but some of the new licensing requirements have yet to come into force.

Some changes that have yet to have effect are changes to the gambling software licensing regime. In April the Gambling Commission finalised plans to ensure that the manufacture, supply, installation and adaption of gambling software used by operators licensed by the Commission is only carried out by a provider that holds a gambling software licence it has issued. The regulator said, though, that it would not require "each and every business within an extended supply chain to hold a gambling software licence".

The gambling software licensing requirements were originally due to be implemented on 30 January next year but the Commission has now confirmed that they will not now take effect until 31 March 2015.

Separately to changes in remote gambling regulation and licensing, a general 15% tax rate is to apply on profits made by gambling operators on remote betting and gaming by players who usually live in the UK under the Finance Act which received Royal Assent in July. The tax will have to be accounted for by operators from 1 December 2014.