Are you a start-up e-gaming business or considering entering this sphere? There are a number of technical, legal and jurisdictional issues to consider and in this article we look at some of these in the context of licensing requirements.

The Gambling Act 2005 (the "Act") defines "remote gambling" as gambling in which persons participate by the use of remote communication such as by the internet, telephone, television, radio or any other kind of electronic or other technology for facilitating communication.

It is vital that you obtain the correct licences if you are providing facilities for remote gambling otherwise you commit an offence under the Act. You commit an offence if at least one piece of remote gambling equipment is situated in Great Britain, irrespective of whether or not the facilities are provided for use wholly or partly in Great Britain.

There are many different types of gambling and gaming online and it is important that you understand how the Act applies to your business and accordingly what type of licence you will require.

Remote Casinos

The Act permits remote casinos to operate from Great Britain although all relevant equipment used to facilitate remote casino activities must meet the Gambling Commission's remote and gambling software technical standards.

Betting

The Act defines betting as the making or accepting of a bet on the outcome of a race, competition or other event or process; the likelihood of anything occurring or not occurring; or whether anything is or is not true. There are different types of betting:

General betting licence holders are able to offer facilities for betting:

  • at premises-based bookmakers;
  • on tracks; and
  • by remote means.

Pool betting can be remote or non-remote and incorporates:

  • racecourse pool betting;
  • football and other sports pool betting; and
  • many of the 'fantasy football' type competitions.

Betting intermediaries can be remote or non-remote and bring two or more parties together, but do not have liability for their bets. Remote betting intermediaries, which include betting exchanges, generally operate through the internet.

Bingo

Bingo is equal chance gaming but is currently not governed by a standard set of rules. However, the way in which bingo is played is broadly similar throughout Great Britain.

Bingo can be remote or non-remote and the requirements that those providing bingo by remote means need to meet are set out in the Gambling Commission's remote gambling and software technical standards.

The Gambling Commission has also published the Bingo and Casino Equipment Technical Requirements - July 2008 relating to:

  • remote bingo made available in licensed premises;
  • ancillary remote bingo (for example, hand held devices which play the game electronically;
  • non-remote bingo equipment (for example, random number generators for non-remote bingo).

Lotteries

Lotteries can be remote or non-remote and if you allow people to participate in a large society lottery or local authority lottery by remote means you will need the correct licences.

Obtaining Licences

If you are setting up a remote gambling service and any part of your remote gambling equipment is based in Great Britain, there is no single licence to cover your activities. Remote operating licences are available from the Gambling Commission for each type of gambling activity you might want to run, whether it be betting, bingo, casino games, gaming machines, gambling software or lotteries.

You may need more than one of these licences and will also need any relevant personal licences as you cannot start running a gambling business until you have obtained all the necessary licences.

If all of your remote gambling equipment is located outside Great Britain you do not need a licence from the Gambling Commission. However, if you are based abroad and want to advertise your gambling services in Great Britain, you must be based in a "whitelisted" country or a country mentioned in the Act, including:

  • EEA countries;
  • Alderney;
  • Antigua and Barbuda;
  • Gibraltar;
  • Isle of Man; or
  • Tasmania.

If you apply for an operating licence, you may also need to apply for one or more personal management licences ("PML") at the same time, unless you are exempt as a small-scale operator.

Anyone responsible for any of the following areas of your organisation will need to apply for a PML:

  • Overall strategy and delivery of gambling operations;
  • Financial planning, control and budgeting;
  • Marketing and commercial development;
  • Regulatory compliance; and
  • IT provision and security related to gambling.

Until you are issued with the relevant licences and PMLs, you should not carry out the responsibilities that a PML allows you to do such as making operational decisions.

Clearly operating a successful and legal online gambling business is a complex area.