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Remote gambling in Britain is getting closer by: HP Sunday, May 11, 2003 April 30th 2003 gave a glimpse of the future regulation of online gaming when the British government’s DCMS (Department of Culture, Media and Sport) revealed their position paper ‘The Future Regulation of Remote Gambling’. ‘Remote Gambling? Is that the new casino in Outer Mongolia? No it’s the term that the DCMS is now using to pull together the concept of online gaming and all it’s other monikers (i-gambling/e-gaming/wireless gambling etc). The document, running to 28 pages, gives a ‘snapshot of the government’s view’ to date as well as many pointers to the legislative structure that is being proposed for a British-based remote gambling industry. The majority of the document confirms much of what has been expected, but the thinking and understanding that is contained in it is refreshing. Contrast this with the ‘head-in-the-sand’, prohibitionist attitude of the Americans and you’ll see what I mean. The key point to the whole of the proposed remote gambling legislation will be that a ‘Gambling Commission’ will deal with the detailed regulatory measures and procedures, whilst ‘The Gambling Bill’ itself will only create an outline framework within which the rules will be set. The Gambling Commission will be expected to issue codes of practise (with the ability to revise them quickly to reflect technological changes), will issue operator and personal licenses (there will be three remote gambling licence categories - gaming, betting and lotteries) and will have powers of entry, search and seizure from licensees. Regarding licenses, costs are yet to be determined and, importantly, existing British licensed gaming operators will not automatically qualify for a new remote gambling licence. Unsurprisingly, the DCMS, reflecting the government and the public’s concern, covers the issues of player protection (both underage and problem gamblers) and security in great detail. Specifically it highlights it’s thinking on privacy, security, player screening, reality checks, responsible management, site content filtering, play for fun games and payment methods. Player identification gets a whole section dedicated to it, looking at the options and possibilities available. It seems that draconian measures like passport identification have been, quite rightly, dismissed as unworkable. Despite the lack of real evidence, the topic of money laundering also gets its own section, with licensees expected to follow advice to be issued by the Gambling Commission, taken from other more specialised agencies. The important topic of technology (systems and software approval) confirms what was expected ie testing will be sub-contracted to specialists in the field. The document lists a dozen areas that will be subject to testing but the good news is that, once an RNG has been approved, each new game played on that RNG will not be subject to testing and approval. The DCMS is also clear on the issue of what, technologically, needs be based in the UK. Primary servers must be based in the UK in order to allow inspectors to physically access them. The gaming itself and critical records (the RNG game logic payouts/games/financial records audits reports and game management software) must all be held on these servers. Some of the DCMS’s most refreshing thinking is on the issue of how the UK’s jurisdiction on online games effects other countries. The DCMS has come to the right conclusion on attempting to regulate and police international, online gaming. Explaining the background and the thought process behind the decision, the DCMS has opted for the totally free market approach, meaning that there will be no country blacklists. On the desirability or practicality of prohibition, and with a pointed jibe at USA, it says “[it flies] …in the face of reality of international banking and the inherently international nature of 21st century telecommunications.” Very interestingly, the section on cross border gambling also contains a clear statement from the DCMS on the always ambiguous question of ‘where does online gambling take place?’ The DCMS have taken the stance that “the regulated activity takes place where the operator is based”. On advertising, the DCMS says that the Gambling Commission will be the monitor of the rules but will follow the E-commerce Directive, as well as taking advice from UK industry bodies like the ITC and the ASA. One point that is clarified is that only licensed operators will be allowed to advertise in the UK. The final topic of the document covers unlicensed premises being used ‘primarily’ for remote gambling. Further thinking is required on this point. The only disappointment in the document is the area of taxes. Again, although the DCMS acknowledges how important this will be to the success or failure of a British-based remote gambling industry, Customs and Excise can still not say what the appropriate level of taxation for remote gambling will be. Although the document itself does not contain a timetable, it is understood that the expected timetable will be for the Gambling Bill to be introduced 2003/2004 session, with royal assent in Summer 2004. Whilst this is progressing, a shadow Gambling Commission will commence work around April 2004. It is expected that the Gambling Commission ‘proper’ will be live by early 2005. In summary one must congratulate the DCMS on it’s work to date on this topic. Let’s hope that it bodes well for the establishment of a world-leading British-based remote gambling industry. The full position paper can be found at www.culture.gov.uk Phil Fraser is a leading consultant in the area of online gaming, specifically online bingo. For advice on all aspects of online gaming call email pfraser@i-ludus.com or visit http://www.i-ludus.com
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