Friday, March 30, 2007

Betting is drawing attention in the wake of Bob Woolmer's murder. Even as
speculation is rife that the betting biggies could have been behind the
crime, www.cricketworldcuplatest.com informs that the Jamaica sleuths are
yet to find any evidence regarding match-fixing and betting in Woolmer's
laptop. How big is the betting industry? A Las Vegas-datelined report on
http://abcnews.go.com cites PricewaterhouseCoopers' forecast - that global
revenue from gambling is expected to climb 8.8 percent annually 'to $125
billion by 2010'. However, according to estimates of Global Betting & Gaming
Consultants (GBGC) posted in a dated story on www.out-law.com, gross
turnover for the global gambling industry should be well over $1,000 billion
annually, with a gross profit rate of about 20 per cent. GBGC is of the view
that the UK could become the centre of global gambling; because "the UK has
long been a role model for integrity and regulation in the gambling sector."
To know about the UK laws that apply to betting, Business Line contacted
Jeff Rodwell, Partner in Reed Smith Richards Butler LLP, an international
law firm based in London. Here's Jeff, taking on a few questions on betting.
What is law on betting in the UK? The current legislation governing the
licensing of bookmaking in the UK is the Betting, Gaming & Lotteries Act
1963 as amended by the Gaming Act 1968. They provide for the licensing of
bookmakers and premises used for bookmaking. The Gambling Act 2005 is
partially in effect and is being phased in over time. The licensing
provisions of the Gambling Act 2005 come into effect on September 1, 2007.
Who can apply for a licence? The criteria under both the existing and new
licensing regimes are similar with bookmakers being required to show good
character, financial viability and industry knowledge. Both regimes also
control the use of advertising for any licensed bookmaker and prohibit
advertising for any person not so licensed. Bookmakers with a licence under
the current statute still have to apply for a licence under the new regime.
The period for application for a licence to be granted from September 1,
2007 has already closed but new licences can be applied for and granted
after the current applications (mostly existing bookmakers) have been
reviewed. On online gambling. Traditionally of course, bookmaking has been
done with a physical presence at the race track or a betting office situated
off-track. Over the last 2 years the volume and value of remote gambling
through the Internet or mobile phones has increased substantially. Both the
existing and the new statute provide for licensing in the UK of remote
gambling operations, although this is addressed more directly in the new
statute. Are these operations commercially successful? In the past there has
been little commercial interest in UK registration of remote gambling sites
because of the significant tax imposed on the turnover or profits of the
remote sites. Most of the gambling websites used by UK residents are based
in various offshore jurisdictions such as Gibraltar, Antigua, Curacao, Malta
and Alderney. Can a local person gamble on a foreign site? It is perfectly
legal for a licensed offshore gaming operation to permit UK residents to
gamble on a foreign based website. This is in contrast to the US prohibition
under the Unlawful Internet Gambling Enforcement Act 2006 on offshore
operators from providing gambling services through the web to US residents.
However in the UK advertising of gambling services not licensed in the UK is
prohibited and such prohibition will be enforced. This applies to
advertisements with a physical nexus to the UK
How then are gambling sites advertised? Obviously much advertising of
gambling websites are made via the Internet, which is legal provided that
the server is based overseas. However in the UK, there is no prohibition on
advertising websites per se, as long as they don't refer to the gambling
activities. Therefore it is quite common to see advertisements on the tube
and in magazines for the Party Poker website, but not the Party Poker gaming
operation. Has the recent UK Budget made any difference to gambling? Prior
to the 2007 Budget speech, there had been considerable speculation that in
order to promote the relocation of many of the offshore gambling operations
to the UK, the government might reduce the relevant tax to 2% or 3%. However
in the Budget speech last week, the UK Chancellor, Gordon Brown, announced
that the tax for remote gaming would be 15%. As a result it is now unlikely
that there will be any major shift of jurisdiction to the UK for those
gambling sites.