THE U.K. WHITE LIST
By Tony Coles

The recent announcement from the United Kingdom government that it has decided to add Tasmania to the so called ’white list," but not to add either Antigua or Kahnawake, has again brought these arrangements to the forefront. It will be remembered that under the new U.K. regulation of all gambling (Gambling Act 2005), which was brought into force on Sept. 1, 2007, the British Gambling Commission regulates all kinds of online gambling in the U.K. (an activity which new legislation describes as ’remote gambling"). U.K. fiscal legislation also provides for its taxation.

With a view of protecting the U.K. player against what the legislators regard as risky sites outside the British Gambling Commission’s remit, the new law prohibits the advertising and marketing of such sites in the U.K. It is noteworthy that it does not prohibit the use of such sites by players in the U.K.

But because the U.K. is part of the European Union, this legislation could not prohibit the advertising and promotion of online gambling lawfully provided from a licensed site elsewhere in the EU. Thus online sites licensed in, for example, Malta can be lawfully promoted in the U.K. alongside sites licensed by the British Gambling Commission. In fact, many operators have opted to be licensed outside of the U.K. because of the unattractive taxation regime imposed by U.K. fiscal rules.

Furthermore, when the new U.K. legislation was passing through Parliament, it was thought unfair to exclude certain operators from the opportunity to promote in the U.K. These operators include those licensed in a jurisdiction which, although outside the U.K. and outside the EU, are nonetheless regarded as ’first tier’ and are thus acceptable to the U.K. government.

The 2005 Gambling Act provided a mechanism under which the U.K. government could identify such first-tier Casino Lawyer - Spring 2008 9 jurisdictions and add them to the so-called ’white list." In January 2007, the government published a series of guidelines for jurisdictions that wanted to be added to the white list.

First, the application has to be made by a government that holds the relative legislative and/or regulatory authority within a particular jurisdiction. The U.K. government will take into account representations by other people and organizations, but it will not accept an application unless it is from the government concerned. Thus, an operator cannot apply to the U.K. government for its jurisdiction to be added to the white list. Only the government of the jurisdiction concerned can do that, although the operator can add its representations in support of the application.

Furthermore, the applicant government must satisfy the U.K. government that its regulatory regime provides for stringent regulatory control. This regulatory control must not necessarily replicate U.K. legislation, but it nonetheless must address all of the issues that U.K. regulations cover, and it must be substantially similar in intention and effect. The applicant government also has to show that its jurisdiction has the capacity, as well as the technical and regulatory ability and political impetus, to enforce its own regime.

The intention behind these guidelines is for applicant governments to provide their licensed operators with substantially the same regulations as are provided under the U.K. rules, so that U.K. players have a very similar level of protection.

Applications for inclusion on the white list can be made at any time, but there is no backdating; operators within an applicant jurisdiction cannot rely on an exemption from the prohibition of marketing and advertising in the U.K. unless and until that jurisdiction is included in the white list. Although most of the attention paid to the white list relates to its effect on online gambling, the provisions also apply to terrestrial gambling. Thus, unless a jurisdiction is on the white list (or is within the EU), its operators of terrestrial gambling establishments (such as casinos or Bingo halls) cannot advertise in the U.K. For example, Nevada is not on the white list, and therefore, it is illegal for the operators of Las Vegas casinos to promote or advertise in the U.K. It is, of course, legal to advertise a hotel located in Nevada, but it is now necessary to consider the extent to which that hotel’s gaming facilities can be mentioned before an offense is committed.

The U.K. government originally announced that seven applications had been received for inclusion on the white list, and two were initially approved: Alderney and the Isle of Man. Those from Alexander (a Canadian reservation), the Netherlands Antilles and Tasmania were rejected. But subsequently, in an announcement released just before the end of 2007, the U.K. government revealed that following the introduction of amended tax legislation in Tasmania, it had reconsidered its application and had now added Tasmania to the white list. And despite what it described as an ongoing, careful assessment of the applications by Kahnawake and Antigua, the U.K. government had decided not to white list them.

The U.K. government has not given any detailed reasons for its decision not to white list any of the failed applicants, but it must be assumed that the failures arise because either the applicant in question did not satisfy the U.K. government that it is ’the government which holds the relevant legislative and/or regulatory authority," or if it did, that the regulatory regime in the applicant jurisdiction did not properly address the same concerns as are covered by the U.K. law, or that the applicant jurisdiction did not have the capacity, ability or political impetus necessary to enforce that region.

It is interesting to speculate on what might now take place. The example of Tasmania indicates that the U.K. government is open to a reconsideration of an application if the circumstances in the applicant jurisdiction change. Also, it is always open to an applicant to re-apply since there is no provision either in U.K. law or in the guidelines limiting an applicant to one try nor, indeed, is any penalty imposed if its application fails. But, of course, there would be little point in an applicant simply re-applying without identifying changes from an earlier failed application.

Although the guidelines indicate that the U.K.’s Gambling Act contains no provision for any appeal from a refusal, it may well be open to an aggrieved applicant to seek the assistance of the U.K. courts on an application for a judicial review of the decision. Judicial review of decisions by government officials and other public bodies is well established, but its use in these circumstances would clearly be novel, and it would be for the courts to decide the extent to which they would interfere.

What is clear, however, is that because of the importance of the U.K. as a gambling market, it is unlikely that we have heard the last of white list applications.