Select Committee on Culture, Media and Sport Third Report


3  Legislative framework

20. The status of Call TV quiz programming is unclear both under current legislation and under legislation set to come into force later this year. At present, Call TV quiz shows are not being subjected to controls under legislation relating to gaming or lotteries; any shift from this position would have significant consequences for broadcasters and producers of Call TV quiz show programming. If, for instance, it is determined that the shows are lotteries, they will be required to operate under a licence from the Gambling Commission and contribute at least 20% of lottery proceeds to a good cause.[40]

Legislation

21. There are many uncertainties about the status of Call TV quiz shows under the present law. Much depends on whether a game is a game of skill or a game of chance. A game in which success "depends to a substantial degree on the exercise of skill" is treated as a prize competition under the Lotteries and Amusements Act 1976, rather than a lottery, and the game will be free of regulatory control.[41] If a game does not involve the necessary level of skill, it may be considered a lottery and would be regulated under the 1976 Act.[42] A different statutory framework will apply from September 2007, when the Gambling Act 2005 comes fully into force. Section 3 of the Act lists activities which are regarded as "gambling" and are therefore regulated: gaming, betting, and participating in a lottery. The question is: will Call TV quiz shows fall within one of these definitions and be regulated by the Gambling Commission?

Are Call TV quiz shows lotteries?

22. The Gambling Commission acknowledges that some Call TV quiz shows may fall to be regarded as lotteries under current law; but it observes that this could only be determined by pursuing a case through the courts, an exercise which would take considerable time and resources and which would not be resolved before implementation of the new Act in September. The Commission has concluded that, overall, there is little to be gained in pursuing such a case, and it will concentrate instead on the implications of the 2005 Act.[43]

23. The Gambling Act 2005 defines as a lottery any "arrangement" under which:

—  Persons are required to pay in order to participate in the arrangement;

—  In the course of the arrangement one or more prizes are allocated to one or members of a class; and

—  Either the prizes are allocated by a process which relies wholly on chance (a "simple lottery"), or, if there is a series of processes, the first of those processes relies wholly on chance ("a complex lottery").

The Gambling Commission's view is that Call TV quiz shows "have many of the attributes of what are defined as 'complex lotteries' in the new Act".[44] If, however, the shows can demonstrate that viewers do not have to pay to take part, they may escape classification as a lottery and be treated instead as a "free draw" and be exempt from statutory control.[45] Schedule 2 to the Act recognises provision of a means of free entry to a competition as being enough to qualify an arrangement as not requiring payment. The cost of postage, making a telephone call or using any other method of communication is not treated as a requirement to pay if the communication is at a normal rate (as opposed to premium rate).

24. In August 2006, the Gambling Commission issued a consultation paper on the implications of the new law in distinguishing between lotteries, prize competitions and free draws.[46] Responses indicated that some, if not all, Call TV quiz show operators would probably seek to argue that they were not operating "complex lotteries" as a free entry route using websites was available. The Commission was cautious but thought it likely that at least some of the programmes would meet the "free entry" criteria. One or two operators, however, showed an interest in being licensed, so that their programmes would operate as lotteries.[47]

25. It must be remembered that providing a free entry route via a website would not automatically enable a Call TV quiz show to escape the definition of a complex lottery under the Act. Web entry routes might fail to meet the "free entry" criteria because the routes were "user unfriendly" and failed the test of being no less convenient than entering by paying,[48] or because they were not publicised in a way likely to come to the attention of each potential participant.[49] It is also open to challenge whether shows can justly claim that each participant does indeed have "a choice whether to participate by paying or by sending a communication". Susan Marks, a Social Policy Officer at Citizens' Advice, told us that there were concerns about whether the internet entry routes would be an option available to Citizens' Advice Bureau clients. [50] The most recent statistics published by Ofcom show that only 28% of consumers aged over 65, and 35% of those in socio-economic groups D and E, have access to the internet.[51] Only 25% of consumers with annual incomes up to £11,500 have internet access at home, compared with 88% of those with incomes over £30,000 and a national average of 61%. ICSTIS is currently considering whether the free web entry routes are genuine equivalent alternatives to paying for a premium rate service call.[52] The free entry issue also formed part of the Gambling Commission's recent consultation exercise on prize competitions and free draws (see above); and the Deputy Chief Executive of the Gambling Commission told us that if internet access was as low as had been suggested, there was a real question as to whether people genuinely had a choice.[53] We understand that ICSTIS's conclusions are imminent, and we urge the Gambling Commission to publish its own findings as soon as possible.

26. It is intensely frustrating that uncertainty about whether programmes should or should not be regulated as lotteries under current law is unlikely to be resolved and that shows' status under current law will not be determined. For understandable reasons, the Gambling Commission has taken a policy decision that the trouble and expense of testing the issue in the courts - and the likelihood that cases would not be resolved before new legislation comes into force - means that there is little to be gained from doing so. With some regret, we agree with the Gambling Commission that there is little point in pursuing in the courts cases concerning the status of Call TV quiz shows under legislation which is soon to expire.

27. The Department told us that "ultimately only the courts will be able to decide whether or not certain Call TV quiz services constitute lotteries under the new Act".[54] We hope that the Gambling Act 2005 will prove to be a more useful tool than current legislation in clarifying the status of Call TV quiz shows. We do not take this for granted, as the new Act was drafted before Call TV quiz shows - very much a hybrid creation - became established in broadcasting schedules. We believe that fresh uncertainties in relation to Call TV quiz shows will arise under the new law and will be dispelled only once case law has been established.

28. We note the argument advanced by PROMIS, a counselling centre in London experienced in treating people addicted to gambling, that engaging in the Call TV quiz process "is effectively a form of gambling, where the individual viewer risks the cost of the call in order to win the jackpot". PROMIS concluded that it was "largely chance, not personal merit, which is rewarded".[55] We believe that Call TV quiz shows generally look and feel like gambling, whether or not they will fall within the definition of gambling under the Gambling Act 2005. The chance element, in whether or not a caller gets beyond the first stage, is an integral part of the format: it generates repeat calls and further revenue. Without it, we doubt that the format would be as attractive to broadcasters. We do not see why, just because a free entry route might exist, those who pay a premium rate to enter a game in which the first element is entirely one of chance are doing anything other than gambling. Had the Call TV quiz show format been widespread when the Gambling Bill was being drafted and debated, we would have recommended that the definition of gambling be drawn so as to cover viewers who pay to participate in such shows.

29. Attention to the status of Call TV quiz shows under the Gambling Act appears to have focussed entirely on whether or not the shows are likely to be operating as complex lotteries. It seems to us, however, that Call TV quiz shows may well fall within the definition of "gaming" under the Act: "playing a game of chance for a prize", including a game "that involves both an element of chance and an element of skill".[56] There may be scope for debate as to whether a participant whose call is not connected (as is the case for the majority of participants) ever gets a chance to actually "play a game" within the meaning of the Act. If Call TV quiz shows are indeed gaming, they will be subject to an entirely different set of regulatory controls. This issue has not been raised in any evidence to our inquiry and we cannot comment further; but it seems to us that Call TV quiz shows should constitute gaming under the Gambling Act 2005, and DCMS and the Gambling Commission should consider this as a matter of urgency.


40   Gambling Commission Issues paper, Prize Competitions and Free Draws, August 2006 Back

41   There is, however, no definition under the Act of what constitutes a "substantial degree": see Gambling Commission Ev 47 Back

42   DCMS Ev 69. There is no statutory definition of lottery, but the accepted common law definition is that a lottery is "a distribution of prizes by chance, where the persons taking part in the operation, or a substantial number of them, make a payment or consideration in return for obtaining their chance of a prize": see Reader's Digest v Williams [1976] 3 All ER 737 Back

43   Ev 47 Back

44   Ev 46 Back

45   See Gambling Commission Issues paper, August 2006, on Prize Competitions and Free Draws, paragraph18; http://www.gamblingcommission.gov.uk/UploadDocs/Contents/Documents/Discussion_paper[1].pdf.  Back

46   http://www.gamblingcommission.gov.uk/UploadDocs/Contents/Documents/Discussion_paper[1].pdf. Back

47   Ev 48 Back

48   Ben Good Ev 87 and Mark Raven, Ev 100; See Gambling Act 2005, Schedule 2, paragraph 8 (I) (b) (ii) Back

49   See Gambling Commission Ev 44; See also Gambling Act 2005, Schedule 2, paragraph 8 (I) (c) Back

50   Ms Marks Q 37 Back

51   Ofcom The consumer experience of telecoms, internet and broadcasting services, 16 November 2006 Back

52   Ev 56 Back

53   Q 169 Back

54   Ev 69 Back

55   Ev 99 Back

56   Section 6, Gambling Act 2005 Back


 
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