Memorandum from the Interactive Gaming,
Gambling and Betting Association (DGB 86)
MAJOR THEMES
1. The interactive Gaming, Gambling and
Betting Association welcomes the publication of the UK Draft Gambling
Bill and agrees with its intention to provide a remote gambling
license. iGGBA has been very supportive of the efforts to modernise
the gambling market in the UK, particularly the emphasis to reconcile
gambling regulation with modern technology.
2. iGGBA agrees with the Bill's purpose
of creating a proper UK regulatory framework by issuing a set
of regulations and conditions for a remote gambling licence. Remote
gambling is the only gambling segment currently unregulated in
the UK and this Bill will bring such laws up to date with new
technology and communications platforms. This will have the affect
of enhancing consumer protection and social responsibility for
such services.
3. iGGBA believes that the Bill strikes
the right balance between wanting to bring remote gambling within
the regulatory sphere while assuring that such an industry can
operate in the UK. The approach by the Bill to provide flexibility
in adopting new technologies, licensing the use of such technologies
and advancing new services is welcome by iGGBA.
4. The Association recognises that the prohibition
of remote gambling is not an option as this would only encourage
sites to be established in other jurisdictions with less rigorous
standards of regulation. Prohibition would not be able to limit
the ability of UK citizens from accessing remote gambling sites.
In this light, it is encouraging to see that the Bill recognises
this basic tenet and seeks to provide a licence to establish a
level of protection for consumers and probity for the industry.
One particular note is that the Salvation Army has reiterated
the same need for regulation in the UK.
5. iGGBA recognises the responsibility of
the industry to uphold the three principles outlined by the Government
in the Draft Bill. To this extent, iGGBA has adopted its own internal
Code of Conduct as well as having concluded a substantial Code
of Practice with Gamcare, the social responsibility organisation.
The latter Code of Practice is the most far reaching of its kind
and addresses key issues of age identification, socially responsible
gambling and consumer protection.
6. iGGBA believes the remote gambling licence,
without prejudice to taxation and regulation levels, will have
a positive impact on job growth, tax revenues and overall technological
development in the UK. It is important for the UK, in areas like
broadband take up, to encourage the development of content driven
services and a remote gambling licence will have positive effects
on these public policy objectives. iGGBA has released a impact
statement which shows increased levels of inward investment, job
creation and tax growth.
7. iGGBA believes that the UK must have
an effective tax regime to encourage offshore operators to locate
to the UK. The tax regime must take into account the aspects of
the global market and thus any regime should be competitive with
existing regimes in other countries. If such a rate is advantageous
compared to other regimes, the UK has a great opportunity to attract
a large segment of the market which will positively impact the
country in terms of job growth, tax revenue and technological
advancement. The Association is not convinced that a "UK
Kitemark" will mean much to consumers and therefore provides
little value to operators.
8. The Association believes that the success
of any remote gambling licence will rest on the interpretation
of this Draft Bill by the Gambling Commission and the drafting
of such regulations by the Commission following adoption by the
Bill. iGGBA would like to see the measured content of the Bill
prescribed in the actual regulations.
DRAFT BILL
COMMENTS
9. iGGBA agrees with the definition of remote
gambling in Article 1, point 3 but would encourage the Government
to establish a transparent system of determining whether a technology
platform comes under the definition of remote gambling. In order
to develop new services, the Association believes that new technology
should be encouraged.
10. Much of the responsibility of operating
licence should rest on the personal and fit and proper licence.
By underpinning the regulation on these two items, the ability
to adapt operating services to the market is enhanced. iGGBA recognises
the fact that a level of regulation must be administered in this
sector. By relying on the probity of the operating company and
the personal licence, major regulatory hurdles can be avoided
that would make it impossible to operate in the UK.
11. iGGBA welcomes the establishment of
a Gambling Commission (Article 2, point 12). However, iGGBA would
strongly encourage the early establishment of the Commission in
order to provide licences at an early a date as possible. iGGBA
is concerned that the delay in obtaining licences will deflate
the UK's ability to capture the advantages of remote gambling
licences. iGGBA is particularly concerned with any phasing in
of licences as the continual delay will only deter remote gambling
companies from locating in the UK.
12. iGGBA welcomes the formal consultation
guidelines on Gambling Commission policy including principles
and Code of Practice (Article 2, point 15 (5); Article 1, point
16 (7).
13. iGGBA is gravely concerned about Article
3, point 31 which stipulates the ability of the Secretary of State
to determine which countries an operator may not take bets. iGGBA
believes it is the operators responsibility to obey the laws of
other jurisdictions and that once an operator has a UK license
it is free to provide such services globally. The liability of
obtaining bets from other jurisdictions is the business of the
operator and international treaty obligations.
14. iGGBA is concerned about the interpretation
of Article 4, point 34 which addresses gambling advertising in
relation to children. iGGBA whilst supporting the wholesale restriction
of gambling to under 18's, notes that often advertising medium
are of such a nature as to be visible to under 18's. It is unclear
whether this would mean a potential liability for the operator.
Point 4 and 5 are unclear about advertising an internet site for
use by over 18's if such advertisement can be seen by under 18's.
Advertising should restrict the element of invitation to play
for under 18's, but the posting of a web site should not imply
an offence under the Act. iGGBA has already taken a robust position
on advertising on television with the publishing of the advertising
policy.
15. iGGBA is concerned about Article 5,
point 2 which indicates that the Gambling Commission will not
provide a unique remote gambling licence. Operators provide a
mix of casino, gaming and betting options to consumers. To obtain
all three licenses and their remote gambling extensions would
be an undue regulatory burden on remote gambling operators. It
is also unclear whether a remote gambling licence for multiple
games could only be made available under a casino operating licence
(Article 5, point 54 (4)). Most operators wish to offer a variety
of games across the gambling spectrum and having to obtain multiple
licences would delay the start of services and cause regulatory
gridlock when having to comply with different sets of regulations.
iGGBA would advocate a single remote gambling licence which could
be expanded (a tick box system) to cover the different activities
(gaming, betting, betting intermediary). The add on compliance
measures should demonstrate expertise in the various sectors,
but not be so burdensome to effectively be three different licencing
tests.
16. iGGBA is concerned about the vagueness
surrounding which companies will be required to seek an operating
licence, particularly companies involved in the provision of services
but are not the actual operator. For instance, there seems to
be no clear indication of which companies would require an operating
licence for the provision of software to operators for remote
gambling services. There should be further discussion with the
industry and clarification from the Government on what determinant
will be used for deciding on who should be obligated to hold an
operating licence.
17. iGGBA is concerned about Article 5,
point 64 (7) which allows a licence to be arbitrarily amended
for any number of items, particularly restricting means of communication
which previously were acceptable under Article 1, point 3. Such
uncertainty will make it more difficult for offshore operators
to take up a UK licence.
18. iGGBA supports the testing of equipment
as written in Article 5, point 70 (1-6), but would suggest that
a license be predicated on the passing of the fit and proper test
and personal licence test for the application. Approval of equipment,
games and other compliance factors should be considered with a
regard to the proportional benefit of each regulation.
19. iGGBA is concerned about the change
control mechanism under Article 5, point 81 (6) which allows the
Gambling Commission to determine when a variation to the licence
may take effect. iGGBA feels that if the holder of the operating
licence has passed the fit and proper test and hold a personal
licence then the variation should be permitted during the time
of Commission amendment of the licence or approval of the variation
within the licence.
20. IGGBA is concerned about the process
of appeal to decision by the Gambling Commission. In the case
of the draft Bill it seems that the Commission acts as both judge
and jury for determining violations of the licence. In this case
there should be a system in place which does not force a shutting
down of an operation without some sort of independent investigation
into the alleged breaches.
21. Under Article 5, point 70 (2), stipulates
that remote gambling equipment must be located in Great Britain.
iGGBA is concerned that many ancillary technology requirements
such as "on the edge" and game download servers, call
centres and bank processing are not core to the game determination
and thus should not be required to be situated in Great Britain.
iGGBA has stated that the "primary determination" server
should be located in Great Britain where authorities have access
to the logs and player database, but not a requirement for all
equipment involved in remote gambling to be located in the country.
22. iGGBA would wish to clarify the position
within the draft Bill on credit play and positive incentives for
adults to visit and play on the sites. It is rather unclear about
the legality of allowing various marketing methods such as credit
play, free play and other mechanisms.
23. iGGBA is also very concerned about
the timing. The Policy document from the DCMS states that the
Gambling Commission may have to phase in the licence schemes.
Any more delay will only defeat the Government's purpose of insuring
companies relocate to the UK for remote gambling purposes. iGGBA
strongly advises that remote gambling licences should be made
available as soon as possible after the coming into force of the
Bill.
24. In summary, iGGBA is pleased with the
Draft Bill which reflects the position set out by the government
in the Remote Gambling Position Paper. The provision of a UK remote
gambling licence will go a long way in securing a proper regulatory
environment, protecting consumers and accruing benefits to the
UK in terms of jobs and tax revenue.
December 2003
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