GAMBLING (LICENSING AND ADVERTISING) bill

These notes refer to the Gambling (Licensing and Advertising) Bill as introduced in the House of Commons on 9 May 2013 [Bill 8]

Explanatory Notes

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introduction

1. These explanatory notes relate to the Gambling (Licensing and Advertising) Bill as introduced in the House of Commons on 9 May 2013. They have been prepared by the Department for Culture, Media and Sport in order to assist the reader of the Bill and to help inform debate upon it. They do not form part of the Bill and have not been endorsed by Parliament.

2. The notes need to be read in conjunction with the Bill. They are not (and are not meant to be) a comprehensive description of the Bill. So where a clause or part of a clause does not require any explanation or comment, none is given.

summary

3. The Bill extends the scope of the regulatory regime governing remote gambling under the Gambling Act 2005. It also introduces an offence of advertising unlicensed remote gambling which will only apply in Northern Ireland.

background

4. The 2005 Act introduced a new regulatory regime to govern the provision of gambling in Great Britain and created a single regulator, the Gambling Commission.

5. The general approach adopted under the 2005 Act is that a person who provides facilities for gambling must hold an operating licence from the Gambling Commission, unless otherwise exempted. A person who provides facilities for gambling without a licence as required commits an offence under section 33 of the 2005 Act.

6. The 2005 Act regulates both ‘non-remote’ and ‘remote’ gambling.

7. Remote gambling means gambling in which persons participate by the use of ‘remote communication’. This includes the internet, telephone, television, radio, or any other kind of electronic or other technology for facilitating communication.

Bill 8-EN

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8. A ‘remote operating licence’ is required to provide facilities for remote gambling if (and only if) at least one piece of ‘remote gambling equipment’ used in the provision of the gambling facilities is located in Great Britain. The effect of this is that remote gambling operators who locate all of their remote gambling equipment overseas do not need a remote operating licence from the Gambling Commission, whether or not their remote gambling facilities are used by British consumers.

9. The 2005 Act also regulates advertising of gambling services in Great Britain. Section 328 of the 2005 Act empowers the Secretary of State to make regulations controlling the advertising of gambling. To date no such regulations have been made. In addition to the advertising offences in the 2005 Act (see further below), licensed operators must comply with the Code of Practice issued by the Gambling Commission under section 24 of the 2005 Act. The Code requires operators to comply, as appropriate, with the Broadcast Committee of Advertising Practice, the Committee of Advertising Practice codes issued under the auspices of the Advertising Standards Authority, and the gambling industry’s own Gambling Industry Code for Socially Responsible Advertising.

10. There are two general advertising offences in the 2005 Act: sections 330 and 331.

11. Section 330 makes it an offence to advertise unlawful gambling, by remote or non-remote communication. For the purposes of section 330, advertised gambling is unlawful if an operator does not hold the required licence from the Gambling Commission for the gambling to take place as advertised. In the case of remote gambling, the offence of advertising unlawful gambling only applies if at least one piece of remote gambling equipment to be used in providing facilities for the advertised gambling is situated in Great Britain (see section 333 (territorial application: remote advertising)).

12. Section 331 makes it an offence to advertise foreign gambling, whether by remote or non-remote communication. ‘Foreign gambling’ means gambling which either takes place in a non-EEA state (e.g. a casino in Australia), or gambling by remote means which is not regulated by the gambling law of any EEA state. For the purposes of section 331, Gibraltar is treated as if it is an EEA state. The Secretary of State may also make regulations specifying places which are to be treated as though they were EEA states for the purposes of section 331, known as the "White List". There are currently four places on the White List: the Isle of Man and Tasmania, the States of Alderney, and Antigua and Barbuda. Gambling operators based in Gibraltar and White List places are able to advertise their gambling services in the United Kingdom without a remote operating licence from the Gambling Commission.

13. The Bill engages the Technical Standards and Regulations Directive 98/34/EC (as amended by Directive 98/48/EC) and as such was required to be notified in draft to the European Commission. This has been done.

territorial extent and application

14. Clauses 5(1) to (3) provide for the territorial extent of the Bill. Clauses 1 to 3 and 5 apply to England and Wales and Scotland. Clause 2(1) also extends to Northern Ireland, and clause 4 only extends there.

Territorial application: Scotland

15. Betting, gaming and lotteries are reserved matter s for the purposes of the Scotland Act 1998. The Bill does not contain any provisions that fall within the legislative competence of the Scottish Parliament. It does not affect the functions of the Scottish Ministers and does not make different provision in relation to Scotland .

Territorial application: Wales

16. The Bill does not contain any provisions that fall within the legislative competence of the National Assembly for Wales. It does not affect the functions of Welsh Ministers and does not make different provision in relation to Wales.

Territorial application: Northern Ireland

17. Gambling is a transferred matter for the purposes of the Northern Ireland Act 1998. Westminster will not normally legislate with regard to a transferred matter in Northern Ireland without consent of the Northern Ireland Assembly. Clause s 2 (1) , 4 and 5 extend to Northern Ireland. Those provisions w ill therefore require the consent of the Northern Ireland Assembly by way of a Legislative Consent Motion.

commentary on clauses

Clause 1: Licensing of remote gambling

18. Clause 1(2) extends the category of remote gambling operators who will need a licence from the Gambling Commission. An operator will need a licence from the Gambling Commission if their gambling facilities are used in Great Britain (even if no equipment is located here) and the operator knows, or should know, that the facilities are being used or are likely to be used in Great Britain. If the operator does not obtain a remote gambling licence, they will be committing an offence under section 33 of the 2005 Act.

19. For example, an overseas-based operator who makes remote gambling facilities available on the internet will need to obtain an operating licence from the Commission if their website is used in Great Britain and the operator knows, or should know, that the facilities are being used or are likely to be used in Great Britain. If the overseas operator wants to avoid having to obtain a licence, they will need to block their website in Great Britain to prevent it being used by consumers here.

20. Clause 1(3) repeals paragraph (a) of section 26B of the Betting and Gaming Duties Act 1981.  Section 26B makes provision for remote gambling duty. Under that section, duty is charged on the provision of facilities for remote gambling in two cases.  The first case is where the facilities are provided in reliance on a remote operating licence (section 26B(a)).  The second case is where at least one piece of remote gambling equipment used in the provision of the facilities is situated in the United Kingdom (section 26B(b)).  At present, under the 2005 Act, an operator is only required to hold a remote operating licence if they have at least one piece of remote gambling equipment in Great Britain. Therefore a remote gambling operator who needs a licence will always also fall within section 26B(b) of the 1981 Act. As above, clause 1(2) of the Bill extends the category of operators who will have to hold a remote gaming licence. The government do not intend to use this Bill to extend the remote gambling duty to this new category of operators.  The repeal of section 26B(a) ensures that  they will not be liable for remote gambling duty, whilst not affecting the liability of those who are currently required to hold a remote operating licence. 

Clause 2: Advertising of foreign gambling

21. Clause 2(1) repeals the offence of advertising foreign gambling in section 331 of the 2005 Act. The effect of this amendment is to abolish the White List (for further discussion about the White List see paragraph 12, above).

22. Clause 2(2) makes minor consequential amendments to sections 332, 333 and 361 of the 2005 Act.

Clause 3: Advertising of gambling by way of remote communication

23. Clause 3 amends section 333 of the 2005 Act. Section 333 sets out the territorial application of the advertising provisions in the case of advertising which is done by remote communication (called ‘remote advertising’ in the 2005 Act).

24. Clause 3(2) removes an anomaly in section 333(2)(b) in relation to television advertising. Currently a television broadcaster or service provider who is under the jurisdiction of an EEA state can advertise unlawful gambling in the United Kingdom that they would otherwise be prohibited from doing by section 330 of the 2005 Act. The amendment will ensure television broadcasters and service cannot advertise unlawful gambling.

25. Clause 3(3) amends section 333(9)(b). Section 333(9)(b) limits the extent of the offence of advertising unlawful gambling, in the case of remote gambling, to operators who have at least one piece of equipment in Great Britain, i.e. those operators who currently require a remote operating licence from the Gambling Commission. Clause 3(3) amends section 333(9)(b) to extend the offence to operators whose remote gambling facilities are capable of being used in Great Britain. The effect of this will be that a remote gambling operator will commit an offence under section 330 if their remote gambling facilities are capable of being used in Great Britain and a remote operating licence is required for the gambling to taken place as advertised, but the operator does not have a licence.

26. The amendment of section 333(9)(b) will also mean that any regulations made under section 328 in relation to remote advertising will apply to remote operators whose facilities are capable of being used in Great Britain (in addition to the other requirements). To date no such regulations have been made.

Clause 4: Offence of advertising unlicensed remote gambling: Northern Ireland

27. Clause 4 creates an offence of advertising unlicensed remote gambling which will only apply in Northern Ireland. The effect of this amendment is that a remote gambling operator who does not hold the required Gambling Commission licence will not be able to advertise remote gambling in Northern Ireland.

28. Currently the law in Northern Ireland does not regulate remote gambling or the advertising of remote gambling. The repeal of section 331 in Northern Ireland would therefore mean that remote gambling operators could advertise remote gambling in Northern Ireland, regardless of whether they were regulated in Great Britain (or in any country). The new offence will bring Northern Ireland back into line with the position in Great Britain, as it will extend the same protection that applies to British consumers in relation to advertising unlawful gambling (section 330) to consumers in Northern Ireland.

29. Clause 4(3) replicates the same protections that currently apply in relation to remote advertising in the 2005 Act (see section 333(4)). A person guilty of an offence of advertising unlicensed remote gambling is liable on summary conviction to imprisonment for a term not exceeding 6 months, a fine not exceeding level 5 on the standard scale, or both.

FINANCIAL EFFECTS OF THE BILL

30. There are no additional costs incurred by Government. The associated costs incurred by the Gambling Commission as a consequence of the Bill will be met out of fees paid to the Commission under the 2005 Act.

EFFECTS OF THE BILL ON PUBLIC SERVICE MANPOWER

31. The Bill is not expected to have any effect on public service manpower. The Commission is adequately resourced to enforce the extended scope of the regulatory regime.

SUMMARY OF THE IMPACT ASSESSMENT

32. The Regulatory Impact Assessment which details the proposals and alternative options considered has been carried out. An Equality Impact Assessment has also been carried out.

33. Copies of the Regulatory Impact Assessment and the Equality Impact Assessment are available on the Department for Culture, Media and Sport website.

COMPATIBILITY WITH THE EUROPEAN CONVENTION OF HUMAN RIGHTS

34. This Bill is compatible with the human rights and freedoms recognised in the European Convention of Human Rights.

35. The Bill engages Article 6 (right to a fair trial) and Article 10 (freedom of expression) of the ECHR and may engage Article 1 to the Additional Protocol to the Convention (right to peaceable enjoyment of property). However, to the extent that those rights are engaged, it is considered that the Bill does not breach any of those rights.

36. In relation to Article 6, the Bill does not change any of the provisions that apply in relation to the investigation of criminal matters, or the conduct of criminal proceedings in the UK. As regards Article 10, any restriction on freedom of expression as a result of amendment to the advertising provisions are necessary and proportionate to protect British consumers from the harmful effects of gambling, and prevent crime and disorder. If Article 1 to the Additional Protocol is engaged in relation to the abolition of the White List, any interference is necessary and proportionate to the protection of British consumers from the harmful effects of gambling, and to prevent crime and disorder.

COMMENCEMENT

37. Clause 5 and clauses 1(4) to (7) will come into force on the day on which the Act is given Royal Assent. The remaining provisions of the Bill will come into force on such day as the Secretary of State may by order made by statutory instrument appoint (different days may be appointed for different purposes).