Online gambling companies that advertise in the UK, or take bets from customers in the UK, are facing the prospect of much greater scrutiny and the requirement to obtain a licence of some description from the UK Gambling Commission.
This is the news, emanating from the DCMS just a few days ago, which I suspect will not be welcome news to the online gambling industry. Credits go to the APCW 2nd April video for bringing this information to my attention.
I’-ve commented also in my own UK online gambling article.
The plans came to light in an announcement by the DCMS of a consultation on the regulatory future of remote gambling in Great Britain. The full details of the proposals can be found as follows:
I have also produced a user-friendly version, with contents links for convenient navigation to the various sections –- see my consultation document copy. If you want to read the full document, this version definitely facilitates the process.
I’-ll summarise the situation as succinctly as possible:
Basically, the DCMS, the governmental department directly responsible for remote (online) gambling in the UK, is concerned about the current imbalance represented by the existence of two types of online gambling operations with access to UK customers:
• Those which are located in the UK and fully covered by UK legislation.
• Those which are located outside the UK.
The latter category represents the vast majority, and this is then divided into two groups:
• EEA member states, plus Gibraltar, Isle of Man, Alderney, Tasmania and Antigua &- Barbuda.
• Everyone else.
It is the problems presented by these two non-UK based groups that the proposals seek to address.
The problems under consideration, all outlined in the document, centre on the lack of a guaranteed regulatory framework for non-UK based operators, and the risks this presents to UK customers.
First, the DCMS considered four possible options for EEA member states, which I quote here:
• Do nothing.
• Introduce non-statutory changes to the system and increased regulatory co-operation.
• Introduce the need for such operators to obtain a licence to enable them to advertise in the UK.
• Introduce the need for such operators to obtain a licence to enable them to transact with British consumers and advertise in the UK.
The option planned for adoption is the last, which is the most far-reaching.
Second, for non-EEA member states (plus Gibraltar, Isle of Man, Alderney, Tasmania and Antigua &- Barbuda), The DCMS considered three possible options:
• Improve the white listing system for non-EEA jurisdictions.
• Develop a more streamlined white listing process as well as introduce licensing for operators in white listed jurisdictions.
• Abolish the white list and introduce a licensing system for operators in all non-EEA jurisdictions.
The option that the government proposes to adobt here is the second, the more “-streamlined”- whitelist.
To summarise to date: EEA member states (plus Gibraltar, Isle of Man, Alderney, Tasmania and Antigua &- Barbuda) would need a to obtain a license to transact with UK customers- non-EEA member states would need to be whitelisted.
The proposals are currently very flexible on matters of compliance. They do suggest the following safeguards, however:
• A mirrored, tamper-proof server containing a full copy of gambling transaction records for inspection by the Commission (in Britain or elsewhere)
• A regulatory representative in Britain
• A UK registered company and certain office functions located in Britain
• More enhanced regulatory returns
• A bond lodged in Britain or payable to the Commission in the event of default.
On the question of actual enforcement: the consultation considers, and rejects, prohibitive and punitive measures (such as extradition applications for offenders, the actual blocking of transactions to non-licensed operators by UK banks, ISP blocking, and so on), preferring to focus on cooperation, rather than than sanctions, as a means of ensuring compliance.
Which is all very “-British”-. 
They also say as follows with regard to prohibitionist measures:
We have considered whether to make it an offence for a British citizen to gamble with an unlicensed provider.
At this stage we are not minded to consider such a provision further as it seems disproportionate to the harm caused and raises issues of informed adult choice.
We do not intend at this stage to introduce an offence that would criminalise the consumer for gambling with an unlicensed operator.
This suggests that they do not rule out a US-style prohibitive approach at some future point –- though I suspect this is very unlikely.
Issues of raising consumer awareness, such as a dedicated section of the Commission’-s website put aside for facts relevant to the player customers, are also considered as part of the compliance / enforcement considerations. Consumers could thuswise:
• Check the licensed status of operators.
• Learn which operators have had their licences suspended or revoked.
• Learn which operators are trying to access the market without a licence (we envisage this would usually refer to repeat offenders).
• Anonymously or otherwise, inform the Commission of any operators that have been targeting British consumers without a licence.
The actual consultation document is long, but not too long. It’-s definitely worth reading if these matters are of interest to you.
The proposals under consideration will certainly tighten up the online gambling scene as it relates to the UK-based customer. As such, I support them. However, I suspect the industry as a whole will not view this development with any great affection, as it represents more cost and, crucially, closer scrutiny.
Close scrutiny and online gambling are not happy bedfellows.