Gambling (Licensing and Advertising) Bill

WRITTEN EVIDENCE SUBMITTED BY BETFAIR (GB 02)

About Betfair

1. Launched in 2000, Betfair is a FTSE 250 company which currently employs 1,700 people worldwide, including nearly 1,000 in the UK. Betfair operates the world’s leading betting exchange. The exchange uses technology similar to a stock exchange, allowing Betfair to offset its risk perfectly by exactly matching sports betting supply and demand. Betting exchanges allow customers to both ‘back’ and ‘lay’ (bet that an event will not occur) and only accept a bet from a customer if they can immediately offset that bet with another customer.

2. In January 2013, Betfair launched a traditional fixed odds sportsbook in line with its competitors’ offerings. Betfair also offers casino, exchange games and poker products. Betfair has international operations, and currently holds operating licences in Denmark, Spain, Italy, Malta, Gibraltar, Schleswig-Holstein (Germany) and Australia. In addition to this Betfair owns TVG, a legal online horseracing wagering TV channel in the US.

Executive Summary

3. Betfair understands the principles behind the UK Government’s desire to regulate all forms of online gambling on a Place of Consumption (POC) basis. Betfair looks forward to applying for a licence from the Gambling Commission.

4. For the new regulatory regime to be a success, for both consumers and licensed operators, the Government must ensure:

a) An efficient application process that does not overburden applicants or the Gambling Commission with unnecessary bureaucratic requirements. Many of the operators applying will already be licensed in several EU and EEA jurisdictions where standards are similar to those that will be set in the UK. This can be utilised by the Gambling Commission to streamline the application process and avoid duplication for all parties. For example, security standards and certifications accepted in other regulated markets should be accepted by the Gambling Commission;

b) Strict enforcement of the regime to minimise the chance of unlicensed operators being able to take bets from consumers in the UK while not meeting the required regulatory standards (or fiscal burdens) met by licensed operators; and

c) The establishment of a regulatory regime which ensures a UK licence will be coveted by operators as providing clear evidence that they meet the highest levels of social responsibility. In addition, there should be a willingness on the side of the Gambling Commission to state this fact and help support the development of harmonised standards internationally that will benefit consumers and legitimate operators in the years to come by ensuring that viable licensed gambling markets develop around the world.

Impact of Enforcement on Regulatory Success

5. Ensuring use of effective enforcement measures is the key to the new regime being judged a success in the long run. Betfair believes it would be reassuring for the legitimate and licensed remote gambling sector to be kept informed, perhaps on an annual basis via a statement from the Secretary of State in Parliament, about the nature and outcomes of the enforcement activity undertaken by the Gambling Commission against illegal operators and the estimated size of any black market.

Impact of Fiscal Policy on Regulatory Success

6. In parallel with the regulatory changes it is essential that the POC fiscal regime being introduced by HM Treasury establishes a structure and rate of tax that does not disadvantage UK licensed operators. Licensees must be able to continue to offer the competitive and varied products consumers have become used to accessing over the last decade.

Betfair and Responsible Gambling

7. Betfair already makes annual contributions to the Responsible Gambling Trust (RGT) to fund the research, education and treatment of problem gambling. Betfair welcomes the Bill’s intention to make contributions to the RGT a mandatory requirement of holding a UK licence and asks that this be done in a transparent manner so operators know what costs will be involved ahead of applying for a licence.

Betfair and Integrity in Sport

8. Betfair is a leader in the field of betting integrity, having pioneered information-sharing agreements, known as Memoranda of Understanding (MOU), with Sports Governing Bodies (SGBs). Betfair now has 58 MOUs with SGBs around the world in a wide variety of sports; these include the FA, ECB, FIFA, UEFA and the IOC. Betfair continues to work with the Gambling Commission’s Sports Betting Integrity Unit (SBIU) despite having been licensed in Gibraltar since March 2011. Betfair welcomes the Bill’s intention to ensure all licensed operators have to share unusual or suspicious betting activity with the SBIU, as Betfair already does.

November 2013