Background

The Gambling Act 2005 (the "Act"), which is due to come into force by September this year, updates existing gambling legislation by providing new powers for the Gambling Commission and protection for individuals gambling in the UK. The Act has three main objectives:

  • protecting children and other vulnerable people;
  • ensuring that gambling is conducted fairly and openly; and
  • keeping gambling crime free.

The Act covers two main activities:

  • providing facilities for gambling; and
  • using premises for gambling,

In either case, you must have the requisite permission which may come from a licence, permit, registration granted or from an exemption given under the Act. There are three different types of licence: operating, personal and premises.

The Act introduces a new licensing regime to be regulated by the Gambling Commission, which replaces the old Gaming Board of Great Britain (the "Commission"). The Commission will not regulate the National Lottery, which is regulated by the National Lottery Commission or spread betting which is currently the domain of the Financial Services Authority.

Remote Gambling

Under existing law, no website offering online bingo, casino or machine-style gaming can be established legally in the UK. However, British residents can freely play on overseas sites without breaking any UK laws. The Act seeks to address this current anomaly by allowing operators to provide remote gambling facilities using equipment situated in Great Britain (subject to the appropriate licences being in place).

Gambling is defined as gaming, betting and participating in a lottery (within the meaning of those terms as defined in the Act). The definition of remote gambling incorporates communication using the internet, telephone, television, radio or any other kind of electronic or other technology for facilitating communication. To ensure that gambling delivered by unforeseen methods can be regulated in the future the Secretary of State may, by issuing regulations, provide that a particular method of communication is or is not to be considered as remote communication.

Gambling Software and Requisite Licences
Anyone intending to manufacture, supply, install or adapt gambling software and/or provide facilities for betting, gaming or participating in a lottery in Great Britain will require the appropriate licence(s). Software as defined in the Act is computer software that is used in relation to remote gambling - this includes software used in telephone, internet, mobile phones and interactive TV gambling.

Importantly, the Act states that a person does not supply or install gambling software by reason of the fact that he makes facilities for remote or non-remote communication available to another person and the facilities are used by the other person to supply or install gambling software. This exception would appear to cover passive internet service providers or mobile phone telephone operators for example.

Anyone intending to manufacture, supply, install or adapt gambling software but will not be using remote communication will require a non-remote gambling software operating licence. They will also require an ancillary remote operating licence if they currently hold or plan to hold a non-remote gambling software operating licence but want to supply gambling software by email only. Other forms of remote communication for the supply of gambling software will require a remote gambling software operating licence.

The provision of facilities for gambling without obtaining an operating licence will be an offence if one key piece of remote gambling equipment is situated in the Great Britain, irrespective of whether or not the facilities are provided for use wholly or partly in the UK.

Personal licences for people within organisations that manufacture, supply, install or adapt gambling software are also likely to be required. The Commission will be responsible for issuing operating and personal licences. A premises licence will be required if gambling services are provided to the public from fixed premises in Great Britain (as opposed to remotely). In England and Wales, local authorities will have new powers to issue premises licences within their area. In Scotland, these powers are given to licensing boards.

This article provides a brief summary of a specialised area of law with complex provisions coming into force. Specialist advise is essential if these provisions will affect your business.