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By David Schollenberger, Partner and Head of Gaming Team, Manches LLP

In a recent statement made before the British Casino Association, Tessa Jowell announced a government crackdown on the abuses in remote gaming advertising in the UK.  Whether this was a political play to the audience or whether there will indeed be some aggressive prosecutions remains to be seen.  The UK land based casino industry has been bitterly complaining about how their business, which they view as highly regulated and taxed are severely restricted in advertising, whilst the unregulated and lightly taxed offshore companies have free rein to advertise blatantly as they wish on taxis, tubes and buses. 

There are a number of reasons why it will be difficult for the Government to carry out its threat to prosecute.

      The Gambling Commission does not yet have enforcement powers, so any prosecutions will have to continue to be done by the Crown Prosecution Service under the old law.  According to a source formerly in government, to date there have not been any remote advertising related prosecutions under the provisions of the 1968 Act.



      Secondly, the language of the Gaming Act being applied by the Government is far from clear.  It was drafted at a time before remote gaming was contemplated.  The language is cryptic and can be interpreted in more than one way.  The law specifically prohibits advertising “inviting the public to subscribe money or money’s worth to be used in gambling whether in Great Britain or elsewhere, or to apply for information about facilities for subscribing money or money’s worth to be used.”  How the government can extrapolate its position from this language is intriguing.

      The position of the former Gaming Board which is now the new Gambling Commission, is that under Section 42 of the Gaming Act of 1968 advertising may only be informational about where to find its services, but may not act as an incentive inducement or encouragement to gamble.  So for example, in the Government’s view, an advertisement on a Middles brought team shirt with the 888.com logo would be considered legal because only the name and website address is given, while an ad offering tree bonuses, the matching of a player’s initial stake or offering free entry to a poker competition would be illegal.  The Committee of Advertising Practice Code requires advertising illegal such advertising would be a violation  of the CAP Code.  The Gambling Commission and CAP  have been urging marketers and publishers not to accept ads for remote gaming sites that advertise on anything other than on availability.


      Under the new Gambling Act 2005, advertising is defined as doing anything to encourage people to use gambling facilities.  OFCOM  (through the Committee of Advertising Practice ) in consultation with the Gambling Commission will make regulation controlling the advertising of Gambling by all media.  The Act requires particular regard for the need to protect children and the vulnerable.  The start of the consultation process has now been pushed back from Spring 2006 until July 2006.  The regulations are not likely to be finally issued for another 18 months.  Until that time, the existing law will continue to apply.


      Under the new Act, a person will commit an offence if he advertises gambling that is not licensed (“unlawful gambling”).  It will also be an offence to advertise “foreign gambling”.  Only companies licensed in the UK gaming poker , in the EEA or jurisdictions otherwise white-listed by the Secretary of State will be able to advertise in the UK.  White–listed jurisdictions are likely to include Gibraltar and Alderney.  Caribbean countries with less strict regulation such as Costa Rica and Curacao are, at least initially, not likely to be included and will not be permitted to advertise in the UK.


      The Remote Gambling Association had written several months ago to the DCMS confirming the desire of its members to cooperate in complying with the law, but requesting further guidance on exactly what is permitted and what is not.  So far they have not received a response.  With this background, many members were surprised with the Government’s statement.  The RGA has followed up with a further letter to the DCMS requesting this clarification and has been assured the guidance will be coming in the next few weeks. 

      It may well just be saber rattling for now.  With the new regulations coming up, the existing law clear as mud, and the Crown prosecution service with no history of enforcement, it may well be not worth the bother now for the Government to do more than make noises

 

 

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