Further memorandum from Sportingbet Plc
(DGB 144)
Sportingbet Plc is a UK based international
operator of interactive licensed gambling services. Our company
is listed on the Alternative Investment Market of the London Stock
Exchange. In excess of 90% of Sportingbet revenues are from overseas
with the US dominating as our major market. In line with the company's
on-going policy Sportingbet Plc has been lobbying the US government
in support of a fully regulated system of internet gambling and
we are strong supporters of UK Government policy to update the
gambling regulations. To give you an understanding of the scope
of our business Sportingbet's figures for the financial year ending
March 2003 was turnover £1,150.3 million, Gross profit of
£74.1 million, Net profit of £14.6 million. We are currently
licensed in the UK and employ more than 450 people worldwide.
1. Sportingbet welcomes the Government's
policy objective of allowing legitimate gambling businesses to
advertise in the same way as other businesses subject to compliance
with relevant codes of practice. Our support for industry regulation
includes the regulation of advertising.
2. However we share the concerns expressed
by the Advertising Standards Authority and the Advertising Association
about the proposed role of the Gambling Commission as regulator
and enforcer of industry advertising standards apparently modelled
on the Financial Services Authority (Paragraph 12 of Policy Note
6). We believe that this approach may cause confusion for the
industry and customers and would deny both of the experience and
expertise of the ASA and OFCOM. We believe a more appropriate
role for the Gambling Commission would be as an expert adviser
to the regulatory bodies (mirroring the role of industry bodies
in other sectors). As the body responsible for issuing, amending
and revoking licences the Commission will be the ultimate legal
backstop for dealing with those who breach the code(s) of practice.
3. Sportingbet's understanding of Paragraph
16 of Policy Note 6 is that advertising in Great Britain by remote
gambling operators in all other jurisdictions will be allowed
unless expressly excluded by the Secretary of State. Sportingbet
strongly believes that an open, competitive and international
market in remote gambling will be to the benefit of all. At the
same time, we recognise that in order to protect the consumer,
the reputation and long-term future of the industry, it is necessary
to place some restrictions and regulations. It is for these reasons
that Sportingbet welcomes the Government's initiative to regulate
the industry and introduce a framework of operating licences.
We are therefore surprised that while the provision of remote
gambling services in Great Britain will be properly regulated,
any operator will be entitled to advertise their services in this
country without regard to their fitness or propriety. While we
note that the Secretary of State will hold a reserve power to
ban jurisdictions where problems occur, we are concerned about
the impact on consumers and their confidence in the industry in
the initial period after the introduction of the Act when it would
appear that there will be an advertising free-for-all. In addition,
we believe that an open-door policy on advertising will dramatically
reduce the attractiveness of applying for a British operating
licence and in turn will significantly decrease the positive impact
of the proposed framework of licences for consumers and the industry
alike.
February 2004
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