Legal Regulations Gambling Review – Recommendations for Online Gambling
The Gambling Review Body was set up by the Government after the Home Secretary announced a wide ranging review of gambling laws on 8th December 1999. The GRB’s terms of reference included “to consider the current state of the gambling industry and the ways in which it might change over the next ten years in the light of economic pressures, the growth of e-commerce, technological developments, and make recommendations for the kind and extent of regulation for gambling activities in Great Britain”. On 16 May 2000 the GRB asked for views on a number of issues to assist with its review, including What will be the impact of the Internet and new technologies on gambling? Should Internet gambling be regulated and, if so, how? The GRB submitted its report to the DCMS in July 2001. Its key recommendations in respect of online gambling – currently illegal in Britain – are set out below. The GRB defined online gambling as referring to gambling services that use a telephone connection, including gambling services accessed via the internet, interactive television and mobile phones. Online gambling covered both both online betting and online gaming.
Key Points Current legal regulation relates only to physical premises where the punter must be physically present. Would not be right to try to ban online gambling in the UK, nor would it be feasible. It is currently illegal to set up online sites in Great Britain. The principles governing the regulation of gambling apply as much to online gambling as to any other type of gambling. There were also particular characteristics of online gambling that made regulation desirable (including its availability, ease of use and negligible entry conditions). Sites based in Britain can be regulated, but not all those sites overseas, so the punter would have a choice of gambling in a regulated environment or take their chance with an overseas operator. Punters using regulated sites will be reassured that they are playing fair games and that they will receive their winnings; their banking details and money would be handled by a legitimate business and not funding criminal activity. The GRB recommended that an online gambling operator seeking a license from the Gambling Commission (a new single regulatory body the GRB recommended should be set up to, amongst other things, license online operations) should at minimum Be registered as a British company, Locate its server in Great Britain and Use a UK web address for its gambling site.
Operators will have to show they are fit and proper and financially sound. UK punters can still use overseas sites not licensed by the Gambling Commission – but will do so at their own risk. The GRB observed that unless taxation of online gambling sites was sufficiently low it might put off operations from seeking a licence here. For licensing purposes a distinction would be drawn between online gaming (stake placed online and the gambling generated by a random number generator of some kind) and online betting (placing bets on real time events).
Online gaming software Would need to operate on a random basis to ensure the outcome of games cannot be influenced; the Gambling Commission would test online casino software to ensure its fairness. Parameters for the development of online games would also be set to ensure they are fair and transparent to the punter. Punters should be made aware of the game rules and terms and conditions of play on online gaming sites before play commences. Online operators Should only make payments to the debit/credit card used to make deposits into the punter’s account, or by cheque to the punter. Online operators should be required to set up facilities that enable players to set maximum stakes and limits, and to self-ban. Clocks and counting systems should be displayed on the screen at regular intervals. Sites are that licensed by the Gambling Commission should be permitted to advertise in Great Britain.