...Firstly, and importantly for gambling software technical standards and testing requirements, we should differentiate between those operators that provide facilities for gambling directly to consumers (i.e. operate a website which takes deposits, verifies the age and identity of customers, accepts bets, pays out winnings, handles complaints etc) and those that provide services such as games to these customer facing operators.
Under the Gambling Act 2005 (the Act) online gambling is currently regulated on a point of supply basis. This means that a gambling company only requires an operating licence if they have certain key equipment located in Great Britain (for example the RNG, servers that store gambling transaction records, settle bets). See section 36(4) of the Act and the Commission’s advice note on remote gambling equipment.
In the case of gambling software developers, as stated in our email of 4 January, a licence is required if any of the licensable activities (manufacture, supply, install, adapt) take place in Britain. It would be an offence to carry out any of those activities without a licence. In the first instance a licence is required to be held in order to avoid an offence being committed.
As you may be aware, much of the online gambling by British citizens is carried out with operators licensed overseas. In fact, the Commission estimates that over 80% of British online gambling activity takes place outside Britain and is therefore not subject to the Act or the licence conditions and codes of practice attached to a Commission operating licence. This can result in confusion amongst consumers as websites can be operated in different jurisdictions and be subject to different requirements such as technical standards, complaints procedures and other matters.
On 3 December 2012 the government published draft legislation which is intended to amend the Act. The proposed new law would mean that remote gambling by consumers living in Britain is regulated on a point of consumption basis. Consequently, all operators selling into the British market, whether based here or abroad, would be required to hold a Commission licence to enable them to transact with British consumers and to advertise in Great Britain. Further information is available at
. One of the effects of the new law would be that because all online casinos transacting with British consumers would require a Commission licence, all games played by British consumers would, for the first time, have to comply with the Commission’s technical standards. As at present testing could be carried out by either the operator contracting with the customer or the gambling software licence holder. However, ultimate responsibility for ensuring a game was satisfactorily tested would still rest with the customer contracting operator i.e. the online casino operator.
In the scenario that you have raised the Commission has no legal or regulatory powers over the gambling provided from Gibraltar under a Gibraltese licence. If a game, manufactured by a Commission licensee, is made available for gambling on under a Gibraltar licence it must meet the requirements of that Gibraltar licence in terms of game fairness for consumers. Different jurisdictions have different regulatory requirements, and we believe it is unnecessary to require a game to be tested to the Commission’s technical standards if it is only ever offered under a non-Commission licence. Instead, the game should meet the technical standards in the jurisdiction where it is licensed.
To further explain this, one could consider an example of where a software developer based abroad supplied a game to an online casino licensed and regulated by the Commission. In that case, the software developer would require a gambling software licence from the Commission in order to legal supply a game into Britain (even if the development i.e. manufacture of the software took place abroad). That game would need to comply with the Commission’s technical standards in order to be offered to consumers by a Commission licensed online casino. The game may have already been tested for compliance against technical standards of the jurisdiction it was manufactured in but ultimately that is irrelevant – it is the Commission’s technical standards that it must comply with in order for it to be made available by a Commission licence holder. If the game does not meet the Commission’s technical standards, it cannot be offered by a Commission licensed online casino.
In his email, 'The Pogg' states “If this is the case, to all intents and purposed, for online players a UKGC seal would be of no inherent value what-so-ever as it offers the customer no regulator protection.” This is incorrect. A Gambling Commission licence offers regulatory protection to consumers gambling with Commission licensed operators. British consumers choosing to gamble in other jurisdictions are afforded the regulatory protections of those jurisdictions. The Commission published an
giving advice for consumers on some of the issues to look out for when gambling online, one of which is identifying the regulator for a website as just because a website is accessed from Britain does not mean it is regulated here.
I hope this clarifies the position and you now understand why the Commission cannot assist further in this matter.
Yours Sincerely
Licensing Officer
Gambling Commission
4th Floor Victoria Square House Victoria Square Birmingham
B2 4BP