Out-Law News 2 min. read

Gambling law reforms to have effect from 1 October but prior High Court ruling expected on legal challenge

A new regulatory and licensing regime for online and other remote gambling activity in Great Britain is set to come into effect from the beginning of next month after the UK parliament passed an order specifying 1 October as the date of commencement for the new regime.

The Gambling (Licensing and Advertising) Act 2014 (Commencement No.1) Order 2014 will give effect to provisions in the Gambling (Licensing and Advertising) Act, which was passed earlier this year. However, the new framework is the subject of a legal challenge from Gibraltar-based gambling operators and might yet be subject to delay or amendment or even be required to be scrapped altogether although this is disputed by the Gambling Commission and the UK government.

Under 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. Transitional arrangements for the move to the new 'point of consumption' (POC) framework have been in place since earlier this summer.

The Gambling Commission has outlined a range of changes to licensing conditions that remote gambling operators will have to adhere to under the new POC regime.

However, last month the Gibraltar Betting and Gaming Association {GBGA) announced that it had lodged a legal challenge before the High Court in London against the UK government and Gambling Commission over the planned new gambling laws and accompanying licensing rules and guidance.

The GBGA described the proposals as "illegitimate, disproportionate and discriminatory … and irrational". It said the plans were "designed for economic reasons: to grant UK operators a competitive advantage over those from overseas" and that they could be detrimental to consumers if introduced.

At the time that, the GBGA said it had asked for an "expedited hearing" for its case on the basis that the new rules could take effect from 1 October. With the publication of the commencement order, the 1 October is now formally confirmed as the date on which the Gambling (Licensing and Advertising) Act will come into force.

"The absence of effective supervision and enforcement, coupled with the burdensome regulatory requirements, will encourage the growth of and migration to unregulated or poorly regulated operators which will present genuine risks to the British consumer," the GBGA said in its formal filing to the High Court.

"When introducing the new licensing regime, the [UK government and Gambling Commission (GC)] rejected the option of a 'passporting' regime. This would have been both less onerous to legitimate operators and more effective in protecting consumers, since it would have been based on effective supervision and cooperation between the GC and overseas regulators," it said.

Peter Howitt, chief executive of the GBGA, said the Gambling Commission "has neither the resources, the legal powers, nor the skills to operate successfully across the globe" and that it was "laughable" for it to suggest it is better placed that Gibraltar's gambling regulator to regulate gambling operators based in Gibraltar.

Out-Law.com understands that hearings in the case brought by the GBGA will take place on Tuesday 23 and Wednesday 24 September and that a judgment in the case is expected to be issued before the end of next week.

Gambling law expert Audrey Ferrie of Pinsent Masons, the law firm behind Out-Law.com, said: "I understand that 161 operators have applied for GB licences which is more than anticipated.  Perhaps the speed or otherwise with which the Gambling Commission deals with these will give some indication of whether or not the GBGA’s view on resources is correct. Certainly all of these operators and their advisors have invested a great deal of time and money in the application process and like us will no doubt await the outcome of the hearing with considerable interest."

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