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Betting, gaming and lotteries

Law in England and Wales, Northern Ireland and Scotland relating to gaming, betting and lotteries; spread betting; Gambling Commission; gambling licences and permits; prize competitions and free draws; private gaming; lotteries including society lotteries large and small, customer lotteries and work lotteries. Links to information on betting and gambling duties and horserace betting levy.

This page contains:


Introduction


England and Wales, Scotland
  Betting and gaming law reform
  Gambling Commission

  Gambling regulation: gaming, betting and lotteries
  Gaming
  Betting
  Lotteries
  Prize competitions

  Advertising


Northern Ireland

Gambling Duties

Introduction

Betting, gaming and lotteries are regulated by the law throughout the UK. However, the law in Great Britain was radically reformed by the Gambling Act 2005 whereas in Northern Ireland the legislation is modelled on the former legislation applicable in Great Britain.

This section is intended to provide a concise guide for owners and managers of SMEs to the law on betting, gaming and lotteries, how it affects business, and to explain what marketing and promotional activities are permitted. It s not intended to provided detailed guidance for bookmakers, casino operators and others involved in the gaming industry.

Money laundering regulation: holders of casino licences are required to comply with anti-money laundering regualtion as a condition of their licence.

20/02/2018: Gambling firms must do ‘better job’ after William Hill £6.2m money laundering fine

Source: http://www.gamblingcommission.gov.uk/news-action-and-statistics/news/2018/William-Hill-to-pay-6.2m-penalty-package.aspx

England and Wales, Scotland

Betting and gaming law reform

The law relating to gaming and gambling was radically reformed in Great Britain by the Gambling Act 2005 ('the Act'). The Act repealed the Betting, Gaming and Lotteries Act 1963, the Gaming Act 1968 and the Lotteries and Amusements Act 1976. For a description of the reform process and references to the Reports, White Paper and Parliamentary debates which led to the passing of the Act, see the Explanatory Notes to the Act.

Gambling is unlawful in Great Britain unless permitted by the Gambling Act or the legislation regulating the National Lottery  or spread betting (see below). The Gaming Act defines 'gambling' as including gaming, betting and participating in a lottery. These three activities are considered further below.

Gambling covers amusement machines, bingo, casinos, gaming, betting, gambling, gaming, lotteries and raffles physically and online. However the National Lottery and spread betting (see below) are governed by separate legislation.

A gambling business may need three categories of licence: operating licences, personal licences and premises licences.

Remote and non-remote gambling


The 2005 Act regulated both ‘non-remote’ and ‘remote’ gambling. Remote gambling means gambling in which persons participate by the use of ‘remote communication’. This includes the internet, telephone, television, radio, or any other kind of electronic or other technology for facilitating communication. A ‘remote operating licence’ is required to provide facilities for remote gambling if (and only if) at least one piece of ‘remote gambling equipment’ used in the provision of the gambling facilities is located in Great Britain. The effect of this was that remote gambling operators who located all of their remote gambling equipment overseas did not need a remote operating licence from the Gambling Commission, whether or not their remote gambling facilities are used by British consumers.

Gambling (Licensing and Advertising) Act 2014 - Licensing of remote gambling.

The Gambling (Licensing and Advertising) Act 2014 extended the category of remote gambling operators who need a licence from the Gambling Commission. An operator will need a licence from the Gambling Commission if their gambling facilities are used in Great Britain (even if no equipment is located here) and the operator knows, or should know, that the facilities are being used or are likely to be used in Great Britain.

Example: an overseas-based operator who makes remote gambling facilities available on the internet will need to obtain an operating licence from the Commission if their website is used in Great Britain and the operator knows, or should know, that the facilities are being used or are likely to be used in Great Britain. If the overseas operator wants to avoid having to obtain a licence, they will need to take action to prevent consumers using their website here.

[Source:explanatory Notes: Gambling (Licensing and Advertising) Act 2014,. Original text is Crown copyright: contains public sector information licensed under the Open Government Licence v3.0 Legaleze is solely responsible for the above text which is a summary only and the full instrument should be read.]

What’s new item on this topic [see What’s new page or archive for full item]:

07/01/2014: Gambling Commission warns gaming machine suppliers must be licensed
The Gambling Commission works in conjunction with online auction websites to prevent the sale of gambling machines via the internet by those not licensed to do so. Such websites have subsequently changed their terms and conditions which now stipulate that they will remove adverts for gambling machines if it is believed they do not have the necessary licences

Gambling Commission

The Gambling Commission was set up under the Gambling Act 2005 to regulate commercial gambling in Great Britain. On 1 October 2013 it took over the responsibilities of the National Lottery Commission to regulate the National Lottery under the National Lottery etc. Act 1993.

The Gambling Commission issues operating licences and personal licences for commercial gambling. The local authority issues premises licences.

Applications for gambling licences: Tacit consent does not apply. For further information about licences and gambling law, visit the Gaming Commission website

Gambling regulation: gaming, betting and lotteries

As noted above, the Gambling Act regulates 'gambling' and this includes ncluding gaming, betting and participating in a lottery (Gambling Act s.3).

Comment: the Act contains some complex definitions of various aspects of gambling law. Guidance on some of these aspects is available from the Gambling Commission.

Gaming

'Gaming' is defined in s.6 of the Act as playing a game of chance for a prize. A “game of chance” includes a game that::

* involves both an element of chance and an element of skill;
* involves an element of chance that can be eliminated by superlative skill, and
* is presented as involving an element of chance;

but does not include a sport.

A person plays a game of chance if he participates in a game of chance whether or not there are other participants in the game, and whether or not a computer generates images or data taken to represent the actions of other participants in the game.

Private gaming


Gaming is private gaming provided it is 'equal chance gaming', there is no charge for participation and it takes place somewhere to which the public do not have access. This may include a private room in an hotel or public house provided no member of the public has access. There are strict conditions and provisions in the Act to prevent any charge or levy being made for participation, and to prevent avoidance by allowing easy or last-minute 'membership' of a club.

Equal chance gaming: gaming is 'equal chance gaming' if it does not involve playing or staking against a bank and the chances are equally favourable to all participants.Iit is immaterial how a bank is described, and whether or not a bank is controlled or administered by a player.

On 18 October 2012, the Gambling Commission warned owners of clubs, pubs and hotels that hosting poker as private gaming is not possible without excluding public access. The update reminds licensees that private gaming can only take place in an area which is not accessible by members of the public. It also warns that attempts to use dubious, temporary or impromptu private membership as a front for private gaming risks breaching the law.

A licensee must not act as a ‘betting intermediary’,i.e. a person who provides a service for the making of bets between other people (the customer and the bookmaker.

Betting

Betting is defined in s.9 of the Act as making or accepting 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.

A transaction that relates to the outcome of a race, competition or other event or process may be a bet within the above definition despite the facts that:

* the race, competition, event or process has already occurred or been completed; and
* one party to the transaction knows the outcome.

A transaction that relates to the likelihood of anything occurring or not occurring may be a bet within the above definition despite the facts that:

*  the thing has already occurred or failed to occur; and
* one party to the transaction knows that the thing has already occurred or failed to occur..

Spread betting


Spread betting relation to stock market prices and indexes falls within the remit of the Financial Services Authority. See Financial services

Lotteries

A lottery is defined in the Gambling Act s.14 if it is an arrangement ( irrespective of how it is described) which meets the description of a 'simple lottery' or a 'complex lottery'.

Simple lottery
An arrangement is a simple lottery if:

(a) persons are required to pay in order to participate in the arrangement;
(b) in the course of the arrangement one or more prizes are allocated to one or more members of a class; and
(c) the prizes are allocated by a process which relies wholly on chance.

Complex lottery
An arrangement is a complex lottery if:

(a) persons are required to pay in order to participate in the arrangement,
(b) in the course of the arrangement one or more prizes are allocated to one or more members of a class;
(c) the prizes are allocated by a series of processes; and
(d) the first of those processes relies wholly on chance.

Prize
A 'prize' in relation to lotteries includes any money, articles or services:

* whether or not described as a prize; and
* whether or not consisting wholly or partly of money paid, or articles or services provided, by the members of the class among whom the prize is allocated.

Chance
A process which requires persons to exercise skill or judgment or to display knowledge is treated for the purposes of the definition of a lottery as relying wholly on chance if:

(a) the requirement cannot reasonably be expected to prevent a significant proportion of persons who participate in the arrangement of which the process forms part from receiving a prize; and
(b) the requirement cannot reasonably be expected to prevent a significant proportion of persons who wish to participate in that arrangement from doing so.

Payment
Schedule 2 of the Gambling Act sets out further detail about when an arrangement is to be or not to be treated for the purposes of the definition of a lottery as requiring persons to pay.

1. Meaning of payment:: a reference to paying includes a reference to:

(a) paying money;
(b) transferring money's worth; and
(c) paying for goods or services at a price or rate which reflects the opportunity to participate in an arrangement.

It is irrelevant for this purpose to whom a payment is made, and who receives benefit from a payment. It is also irrelevant for this purpose whether a person knows when he makes a payment that he thereby participates in an arrangement.

2. Stamps, telephone calls etc: a reference to paying does not include a reference to incurring the expense, at a normal rate, of:

(a) sending a letter by ordinary post;
(b) making a telephone call;
(c) using any other method of communication.

A “normal rate” is a rate which does not reflect the opportunity to enter a lottery, and 'ordinary post' means ordinary first-class or second-class post (without special arrangements for delivery).

3. Payment to discover whether prize won:a requirement to pay in order to discover whether a prize has been won under an arrangement is treated as a requirement to pay in order to participate in the arrangement.

4. Payment to claim prize:a requirement to pay in order to take possession of a prize which has or may have been allocated to a person under an arrangement is treated as a requirement to pay in order to participate in the arrangement.

5. Choice of free entry: an arrangement is not be treated as requiring persons to pay in order to participate if under the arrangement:

(a) each individual who is eligible to participate has a choice whether to participate by paying or by sending a communication;
(b) the communication mentioned in paragraph (a) may be:
(i) a letter sent by ordinary post; or
(ii) another method of communication which is neither more expensive nor less convenient than entering the lottery by paying;
(c) the choice is publicised in such a way as to be likely to come to the attention of each individual who proposes to participate; and
(d) the system for allocating prizes does not differentiate between those who participate by paying and those who participate by sending a communication.

Customer lotteries
Customer lotteries are exempt (i.e. no permission is required) if it is promoted by a person who occupies premises in Great Britain in the course of a business and the following conditions are satisfied:

* no ticket in the lottery is sold or supplied to a person except at a time when he is on the business premises as a customer of the promoter;
* no profits are made;
* no advertisement for a customer lottery may be displayed or distributed except on the business premises, or sent to any other premises;
* each ticket in a customer lottery must be a document (without prejudice to section 253);
* a ticket in a customer lottery may be sold or supplied only by or on behalf of the promoter, and the ticket must not be transferable nor may the promoter accept any transfer;
* each ticket in a customer lottery must state the name and an address of the promoter of the lottery, specify the class of persons to whom the promoter is willing to sell or supply tickets, and explain the non-transferability;
* the price payable for each ticket in a customer lottery must be the same, shown on the ticket, and be paid to the promoter of the lottery before any person is given the ticket or any prizes are allocated;
* it must not be possible for the purchaser of a ticket in a customer lottery to win by virtue of that ticket more than £50 (whether in money, money's worth, or partly the one and partly the other);
* there must be no rollover;
* a draw in a customer lottery must not take place during a period of seven days beginning with a previous draw in that customer lottery, or another customer lottery promoted on the business premises.

Work lotteries
These can only be run and played by colleagues at a particular place of work, but this type of lottery cannot make a profit so is unsuitable for fundraising. You can run a lottery for your employees at a single set of work premises without an operating licence from the Gambling Commission, unless your workplace is subject to a gambling premises licence. All of the proceeds from ticket sales must be spent on prizes and expenses.

Not for profit organisations
The GA provides for three types of permitted lottery which may be suitable for not for profit organisations:
* Society lottery: large lottery;
* Society lottery: small lottery;
* Lotteries which may be operated by a society

Society lotteries are lotteries promoted for the benefit of a non-commercial society. A society is non-commercial if it is established and conducted:
* for charitable purposes;
* • for the purpose of enabling participation in, or of supporting, sport, athletics or a cultural activity; or
* for any other non-commercial purpose other than that of private gain.

Large lottery
A society lottery is a large lottery and may only be run under an operating licence issued by the Commission if the arrangements for that lottery are such that total proceeds (ticket sales) from it:
* may in a single society lottery exceed £20,000; or
* the proceeds of previous lotteries in the same calendar year have already reached or may, taking into account the lottery in question reach £250,000 in one calendar year.
If a society promotes a lottery which, applying the above rules, is a large lottery (the first lottery) then every subsequent lottery it promotes in that year and in the following three years will also be a large lottery and will require the society to hold a lottery operating licence issued by the Commission.

Small lottery
A society lottery is a small lottery if proceeds do not exceed £20,000 for a single draw and aggregate proceeds from lotteries do not exceed £250,000 in any one year.The society must register with its local licensing authority to run a small society lottery. A fee will apply.

Further information on lotteries, including customer lotteries, work lotteries and society lotteries: see Gambling Commission

Prize competitions

Participating in a competition or other arrangement under which a person may win a prize is not gambling for the purposes of the Gambling Act unless it is:

* gaming within the meaning of the Gambling Act s.6;

* betting within the meaning of s.9-11.; or

* participating in a lottery within the meaning of s.14

Comment: Promotional prize competitions, free draws, 'spot the ball', reverse auctions and other promotional schemes must be carefully structured so that they do not fall within the above definitions. Guidance is available from the Gambling Commission's FAQs.

Advertising of gambling

It is an offence to advertise unlawful gambling, by remote or non-remote communication. Advertised gambling is unlawful if an operator does not hold the required licence from the Gambling Commission for the gambling to take place as advertised. In the case of remote gambling, the offence of advertising unlawful gambling only applies if at least one piece of remote gambling equipment to be used in providing facilities for the advertised gambling is situated in Great Britain

The former offence of advertising foreign gambling, whether by remote or non-remote communication, was abolished by the Gambling (Licensing and Advertising) Act 2014. The former 'White List'  of countries has ceased to be in effect.

The extent of the offence of advertising unlawful gambling, in the case of remote gambling, is limited to operators who have at least one piece of equipment in Great Britain, i.e. those operators who currently require a remote operating licence from the Gambling Commission.

[Gambling Act ss.330-333 (as amended)]

[Gambling Act 2005 (Advertising of Foreign Gambling) Regulations 2007 (as amended)

What's new items:

15/02/2018

CAP has announced tougher gambling advertising standards

Source: Advertising Standards Authority (ASA)

The Committees of Advertising Practice (CAP) has announced tougher gambling advertising standards, specifically focusing on ads which appeal to ‘problem gamblers’ and ‘free bets and bonuses’. The new standards which will come into force on 2 April 2018 form a part of gambling regulators bit to ensure gambling regulations prevent harm and promote responsible advertising.

 

Northern Ireland

In Northern Ireland gambling (other than the National Lottery) is regulated under the Betting, Gaming, Lotteries & Amusements (NI) Order 1985 ('the 1985 Order'). The 1985 Order is modelled on older GB law which was repealed and replaced by the Gambling Act 2005.

The 1985 Order regulates betting on tracks and in bookmaking offices, gaming, including the use, supply & maintenance of gaming machines, small scale amusements with prizes and gaming in bingo clubs; and local lotteries.

The courts & district councils license gambling activities. The Department for Social Development (NI) licenses track betting and the Police Service of Northern Ireland enforces the law.

Reform of law: in 2011 the Northern Ireland government carried out a public consultation on possible changes to the current gambling law and it is currently giving consideration to the issues identified in the consultation. At the time of writing, no further changes in the law seem to have been implemented. For further information, check the NI Department for Communities.

Gambling Duties

For information on the following excise duties related to gambling, see Gambling duties:

* Bingo Duty

* Gaming Duty

* Lottery Duty

* Machine Games Duty

* General Betting Dut

* Pool Betting Duty

* Remote Gaming Duty

Horserace Betting Levy

See Horserace Betting Levy Board

[Page updated: 22/02/2018]

 

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