LJUBLANJA  -  JUNE 2006

UK UPDATE – A TIME OF TRANSITION

Tony Coles

Nick Nocton[1]

Background

In April 2005, the Gambling Act 2005 (the “Act”) became law, establishing a new framework for the provision of gambling services within the UK including, for the first time, a proper structure for the regulation of remote gambling.  The Act is being brought into effect in stages during 2005, 2006 and 2007.  It is planned that it will be in force fully by September 2007.

Key Concepts

At the Act’s core are the licensing objectives of keeping gambling crime-free and fair and open, and of protecting children and other vulnerable people from being harmed or exploited by gambling.

Other key concepts include defining “gambling” to cover gaming, betting and participating in a lottery (each of which is further defined) and defining “remote gambling” as gambling in which people participate by the use of the Internet, telephone, TV, radio or “any other kind of electronic or other technology for facilitating communication”. 

“Gaming” means playing a game of chance for a prize and a “game of chance” includes a game involving both chance and skill, and also a game that involves an element of chance that can be eliminated by superlative skill as well as a game that is presented as involving an element of chance.  Poker will therefore continue to constitute gaming under UK law.

A “casino” is defined, not as any kind of building, but as an arrangement whereby people are given an opportunity to participate in one or more casino games.  It therefore includes a remote (or on-line) gambling site of whatever kind.  “Casino game” means a game of chance which is not equal chance gaming and for purposes of the Act “equal chance gaming” is gaming which does not involve playing or staking against a bank and where the chances are equally favourable to all participants.  Thus, by way of example, roulette is a casino game but poker is not, being merely a game of chance.

There are new, if familiar, definitions of “betting” and “pool betting” and a new concept of a “betting intermediary” as someone who provides a service designed to facilitate the making or acceptance of bets between others (e.g. a P2P betting exchange).

Commercial lotteries will continue to be prohibited under the Act, with lottery operating licences being only available to non-commercial societies, local authorities (municipalities) or external lottery managers acting on their behalf.  But there are significant changes in the regulation of lotteries so as to allow them to be operated on-line and with virtual tickets etc.

The Gambling Commission

The Act has established a new industry-wide regulator known as the Gambling Commission (the “Commission”), which came into being in October 2005 and which has assumed not only the duties of the Gaming Board for Great Britain (the previous regulator of casinos and lotteries), but an extended regulatory remit to include all gambling in the UK other than the National Lottery but including remote gambling.

When the Act is in force fully the Commission will be responsible for licensing and regulating gambling operators.  It is directed to aim to permit gambling so far as reasonably consistent with the licensing objectives.  Thus the restrictive and conflicting rules in the UK’s old law are intended to be reversed.

Disclaimer

This summary of the Gambling Act 2005 is prepared by Jeffrey Green Russell but it is not intended to be comprehensive, nor is intended to be a substitute for legal advice.  Professional advice should be sought before applying the information to particular situations.

Please note that in this paper the term United Kingdom or UK is used for ease of reference, but the Act does not all extend to Northern Ireland, which has its own laws on gambling.

While all care has been taken in the preparation of this update, no liability is accepted by Jeffrey Green Russell for its contents. 

June  2006

Jeffrey Green Russell  
56 New Bond Street
London
W1S 1RG

Tony Coles: arc@jgrlaw.co.uk

+44 (0) 207 339 7000