Here are some extracts of a rather damning Consultation on the Regulatory Future of Remote Gambling in Great Britain issued by the department of Sport and Culture - a UK governmental department concerned with remote gaming regulation.
The reason for the consultation was because of the current failing policy that has seen remote gaming sites leave the UK in order to escape such regulation and locate to other, "just give me the money", jurisdictions.
It also deals with the failed attempt of whitelisting offering some form of protection for UK (but this applies to anyone who plays at casinos based in the jurisdictions which is the vast majority) citizens.
The full published paper can be found
and for anyone serious about regulation and it's relevance I recommend you read at least these extracts as it very much echoes concerns I have detailed and argued here.
Remember this is public document issued by a government department so the language is necessarily dispassionate but if you dwell upon what is written it will become clear this is a desperate attempt to give UK gambling regulation some relevance in the new world order of remote gaming.
A Consultation on the Regulatory Future of Remote Gambling in Great Britain
{My notes in braces} coloured text, underline and some bold added for effect.
The Current System
2.7 It is estimated that there are currently between 2000-2500 gambling websites worldwide. The Commission currently has approximately 150 remote licensees that can offer internet betting, casino or bingo. Of these,
fewer than 100 are active, consisting of some large betting operators but mainly small betting operators.{none of these are what players here would consider mainstream casinos with MG, Playtech,Rival, RTG etc software} The Commission’s industry statistics paper for 2008 gives the remote sector’s gross gambling yield (GGY) at approximately £890 million with approximately £850 million generated from remote betting operations
(Includes GGY from
Ladbrokes, Skybet and William Hill who are no longer licensed by the Commission to provide internet gambling.)
The White List
2.8 Under section 331(4) of the Act, the Secretary of State has the power to designate certain countries or places permitted to advertise remote gambling services in the UK.
That list is more commonly referred to as the white list and jurisdictions that wish to be included must demonstrate that their regulatory system for gambling is robust and meets the Government’s published criteria.
2.9 The Government does not demand that a jurisdiction’s licensing and regulatory regime must mirror that of the UK: t
he key question is whether a jurisdiction has embedded within its regulatory regime the same core values which underpin ours. That is to say,
that they too regulate gambling in order to protect children and vulnerable people from being harmed or exploited;
to keep crime out; and to ensure that gambling is conducted fairly, and that they have the facilities and resources in place to ensure compliance and enforcement with those values and the regulatory regime in operation
{Obviously this has failed badly and so this consultation and..}
The Need for Change
concerns were raised by Parliamentarians and others as to whether the current protections for British consumers are sufficient, given that an increasing number of gambling operators are now regulated offshore, outside the scope of the Act and the Commission’s regulation.
3.5 However, our initial work has shown that whilst British consumers make up a significant proportion of the European remote gambling market, our domestic regulator {UKGC}, tasked with upholding the licensing objectives of the Act,
is regulating increasingly fewer gambling operators. Following the implementation of the Act,
no major remote gaming operators chose to relocate their overseas operation in Britain.
3.6
Furthermore, a number of remote betting operators previously licensed by the Commission have recently relocated overseas to compete with their overseas competitors accessing the British market. Such moves put pressure on other operators licensed by the Commission to follow suit in order to compete and have had a significant effect on the size of the remote gambling market regulated by the Commission. It therefore seems appropriate to look again at the current system to ensure that the protections enshrined in the Act continue to be afforded to British consumers.
3.7 Over recent years, internet gambling has grown considerably
Global Betting and Gaming Consultants (2008) estimate that worldwide online gambling revenues were US$16.6 billion in 2008.
Even with the economic downturn many remote operators are reporting increases in revenues and it is likely that growth will only continue as more and more people gain access to the internet and e-commerce becomes mainstream.
3.10 Many European and international countries such as France, Italy, Denmark and South Africa are moving from a prohibition stance to a national licensing and regulation system based upon a set of requirements for operators wanting to access their particular market and target their consumers.
This is in contrast to some existing offshore remote jurisdictions where the regulation is not provided for the protection of their citizens but for operators using their jurisdiction as an outward facing hub from which to access other markets. In particular, we are aware that some offshore jurisdictions which license remote gambling do not permit their own citizens to access that gambling.
3.13
As such, the specific provisions of the 2005 Act, and associated Commission requirements such as anti-money laundering and sports integrity reporting,
probity of operators and testing of software may not necessarily be enforceable requirements for the majority of the remote operators with whom British consumers gamble.
Standards and Software testing
3.14 There are differences in the requirements imposed on operators by gambling regulators in overseas jurisdictions which can result in different protection measures for British consumers, depending upon where the operator or website is regulated.
3.15 Commission licensed operators must undergo rigorous independent software testing to ensure fairness of games to consumers. They must also adhere to information security standards based on recognised international standards and designed to safeguard player data, funds and gambling operations from accidental or malicious misuse.
Overseas licensed operators have different levels of testing and security requirements and the Commission is not able to assess their robustness. This may ultimately mean that
consumers are gambling on websites that have not been independently tested or audited to the standards expected of Commission licensees.
Fairness
4.4
We consider that consistency in regulatory standards is closely linked to the issue of fairness – all operators active in the British gambling market should be required to adhere to the same standards, requirements and obligations in respect of social Department for Culture, Media and Sport
responsibility. Not all jurisdictions have the same requirements and so operators
in those jurisdictions with less robust regulations do not have the same administrative or regulatory burdens imposed thus creating a competitive advantage at the possible expense of the consumer
Options in respect of EEA member states and Gibraltar
4.8 Taking into account the criteria set out above, we have considered a range of options in respect of EEA member states and Gibraltar.
4.9
We considered the following options, explored in further detail below:
1) Do nothing;
2) Introduce non-statutory changes to the system, such as Memoranda of Understanding (MOUs) with other regulators, and increased regulatory co-operation;
3) Introduce the need for such operators to obtain a licence to enable them to advertise in the UK; and
4) Introduce the need for such operators to obtain a licence to enable them to transact with British consumers and advertise in the UK.
4.31 The Government believes that this option{
option 4} represents the most appropriate way forward warranting closer scrutiny and consideration. Further detail is explored in Chapter 5.
Options for non-EEA jurisdictions
a) Improve the white listing system for non-EEA jurisdictions;
b) Develop a more streamlined white listing process as well as introduce licensing for operators in white listed jurisdictions; and
c) Abolish the white list and introduce a licensing system for operators in all non-EEA jurisdictions.
Option b) Develop a more streamlined white listing process as well as introduce licensing for operators in white listed jurisdictions
4.42 This is the Government’s preferred option. Under this option we would retain the principle of the white list by developing a more streamlined process to assess certain key criteria relating to a jurisdiction’s statutory and regulatory framework, but
we would also require operators in white listed jurisdictions to obtain a Commission licence in order that they may transact with and advertise to British consumers[/U]. Further information regarding this option is set out in chapter 5.
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