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A New Era?

Please note the Law may have changed since the publication of article.

Following the report published by the Gambling Review Board (“the Budd Report”), the Government has produced proposals which could potentially make the UK one of the best and most responsible places to locate an online casino operation.

Currently, the legislation which regulates gaming does not cover online casinos, potentially meaning that all such activities are illegal. The reason for this lies in the fact that it is the casino premises which must be licensed under current law and gaming may only legally be carried out from such licensed premises. Obviously this simply does not work with online operations which do not have “premises” as such. In fact, all of the various ways of “having a flutter” – gaming, casinos, bingo, gaming machines, betting and lotteries, are regulated in different ways by different pieces of legislation – and none of the legislation addresses the issue of online gaming by phone, internet or via interactive TV.

Recognising the need for change, the Government commissioned The Budd Report. The Report recommended that the requirement for premises to be licensed should be removed and replaced with an obligation for those undertaking gaming operations to be licensed. This paves the way for online casinos to be licensed. The report also recommended that in order to be licensed in the UK, those establishing online casinos should at the very least have a company incorporated here, locate their server in Britain and use a UK country code as their domain name and that unlicensed sites should not be permitted to advertise in the UK, thereby reducing the visibility of them for UK punters. These proposals are designed to give the online gambler some local recourse in the UK if things go wrong.

The Budd Report also recommended that all gambling should be regulated by a single body, called the Gaming Commission. This would establish standards for obtaining a licence and oversee all gaming operations.

The Government seems to have adopted most of the recommendations and its proposals (see DCMS‘s “A Safe Bet For Success”) mean that UK sites offering online gaming will be able to do so legally by applying to the Gaming Commission for a licence. It is intended that by applying for a licence, legitimate operations can be established with a responsible approach to gaming online. This will include the obligation for operators to have their gaming software checked by the Commission to ensure it is fair, standards ensuring that the site operators are “fit and proper” people to be operating a gaming site and preventing access to the site by children. Punters will also know which sites are licensed as licensed sites will carry a kitemark assuring them that certain standards have been met. Publication of the proposals will now be followed by a consultation period when those in the industry and outside of it can comment on it. If you have comments you should mail them to [email protected]

There is currently no date by which it is anticipated that the new legislation will be enacted. Anyone considering adding an online casino to their website should get specific advice on the legality of it and ways to ensure as far as possible, compliance with the law until such time as the new legislation is enacted.

© This article is copyright Simon Halberstam 2008 and should not be construed as legal advice or opinion in any specific facts or circumstances. the contents are intended for generic information purposes only. You are urged to contact a suitably qualified lawyer for specific advice.