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UK Gambling Act is now in force

Gambling Commission brings legislation up to date

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Major changes are in store for Britain's £91bn gambling industry after new gambling laws came into force on 1st September. The Gambling Act 2005 replaces legislation dating as far back as 1845 and governs nearly all forms of gambling.

The legislation aims to protect children and vulnerable people, cut crime and keep games fair. Operators will have to prove they can meet tough new laws aimed at making gambling more socially responsible. But critics have voiced fears that the result of the biggest overhaul of regulations for decades could be a rise in problem gambling.

The Act covers gaming in arcades and adult gaming centres, betting, bingo, casinos, gambling in clubs and pubs, lotteries (except the National Lottery) and remote gambling.

In theory, free draws and prize competitions are free from statutory control under the Gambling Act 2005. However, there are important changes that affect operators of such events. For example, the Act changes the "skill" test that can distinguish a legal competition from an illegal lottery. (Pinsent Masons is running free OUT-LAW Breakfast Seminars on the new regime for promotions in October. See the link below.)

Perhaps the biggest change under the Act is that casinos, bookmakers and online betting sites will be able to advertise their services on TV and radio in the UK for the first time.

The changes also open the door for the first £1m bingo prize and lift restrictions on casinos, such as the requirement for customers to be members.

The Act came into force in stages. The first stage created the Gambling Commission, established in October 2005, which took on many of the existing responsibilities of its predecessor, the Gaming Board of Great Britain. In addition, the Commission will now regulate British-based remote gambling operators, arcades and the betting industry.

As one of the most powerful gambling regulators in the world, the Commission will be able to levy unlimited fines, withdraw licences, bring prosecutions, enter premises, seize goods and suspend and void bets. The Act also gives a new role to local authorities, empowering more than 1,500 licensing officers (alongside 50 specialist Gambling Commission compliance officers) to inspect gambling premises to enforce the new laws.

As of 1st September, British-based operators who wish to provide gambling must have a Gambling Commission licence. More than 2,500 existing operators completed their application ahead of the April deadline to ensure continuation under the new arrangements.

All operators must abide by the Licence Conditions and Codes of Practice – which includes requirements to ensure all operators promote socially responsible gambling.

According to the Department for Culture, Media & Sport, which has responsibility for gambling, key changes to the industry's regulation include:

  • For the first time, betting shops and remote gambling sites based in the UK will be governed by a dedicated regulator, the Gambling Commission.
  • Local authorities will be able to impose sanctions on operators, including limiting opening hours and reducing numbers of gaming machines.
  • Local people will be able to object to new gambling licences and seek reviews of existing ones.
  • New codes governing advertising come into force, requiring ads to be socially responsible and banning the use of models under 25 or linking gambling to sexual success.
  • Adverts from outside Europe that fail to meet the UK’s strict regulatory requirements will be banned.
  • TV advertisements will be allowed for the first time, but subject to a voluntary 9pm watershed (with the exemption of betting ads during sports events).
  • The membership requirement on casinos is lifted.
  • Bingo clubs will be able to offer rollover jackpots.
  • Questions on phone-in quizzes on TV and radio must be harder. This is to prevent pay-to-enter phone quizzes that are too easy operating as if they were lotteries and therefore evading limits on stakes and prizes and the legal requirement for licensed lotteries to give 20 per cent of profits to charity.
  • Gambling operators will be required to display prominently information about responsible gambling and how to get help for problems. They will also have to work proactively to prevent underage gambling and contribute to problem gambling treatment and research, education and public awareness.
  • Betting cheats, including sportspeople, will face a two-year jail sentence.
  • UK-based betting operators will be required to pass information to sports bodies to prevent cheating.
  • Gambling debts will become legally enforceable, helping to ensure those who win get paid.

Gerry Sutcliffe, minister with responsibility for gambling, said: “Many people like to gamble, and for the vast majority it’s harmless fun. This has and always will be the case. But what has changed is the way people gamble.

"It used to be that you had to leave the house to place a bet, but advances in technology have changed that – TVs, home computers and mobile phones have become the digital equivalent of a betting slip and casino chip.

“The government brought in the Gambling Act because most of our laws were nearly 40 years old and these developments were going unchecked and unregulated.

"The new Gambling Act will give the Gambling Commission and local authorities unprecedented powers to ensure gambling is conducted fairly, children and vulnerable people are protected and crime is kept out.”

The new regulations, however, have met with some criticism. The Salvation Army said the new laws allowed for a general increase in the number of gambling premises, particularly betting shops.

"Gambling is not a normal leisure activity," said a spokesman for the organisation. "Whilst some people enjoy a flutter or bet from time to time, gambling can become addictive and cause many problems. The results can be devastating on the individual, their friends, family, and on society."

Meanwhile, the charity GamCare has called on the government to make changes to the new regulations to force bookmakers, casinos and some online operators to include its helpline number in advertisements.

GamCare staff are gearing up for a rise in the volume of calls in the wake of the changes. A spokeswoman said: "An increase in gambling equates to an increase in whatever small proportion of individuals who gamble who get into difficulty."

Gambling Commission chairman, Peter Dean, said: “We are a nation of gamblers, even if some who admit to the occasional flutter would shy away from that description.

"Parliament has set the basic rules about what gambling is permitted. The Gambling Commission’s task is to ensure that gambling is crime-free, fair and safe. It is a cause of great satisfaction to me that we now have the proper tools to do this within a modern system of gambling regulation which is second to none in the world.”

Free seminar on the new regime for promotions: Pinsent Masons is running a series of free, one-hour OUT-LAW Breakfast Seminars on Promotions: the new regime for prize draws and competitions at its offices across Britain in October.

See: OUT-LAW Breakfast Seminars

Copyright © 2007, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

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