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Online gambling operators may need license in UK

By admin, Jan 8th 2010

If you are a company from outside the United Kingdom who is targeting British customers, you are eventually going to need a license to operate, according to new standards proposed by the Department for Culture, Media and Sport (DCMS) in that country.

The new regulations would apply to any gaming operation that chose to advertise or sell to a British customer, and its objective is to promote more in the area of consumer protection for those who engage in online gambling, which is a regulated industry. Guarding against the participation of underage individuals or problem gamblers is also a rationale behind the licensing decision, according to Gerry Sutcliffe, who is the Sports Minister, although it is doubtful that anyone applying for a license who doesn't have such safeguards in place will be approved. Licensed operators would also have to contribute to a fund that would be established to treat problem gambling in the UK.

There are other dimensions as well. Inasmuch as there have been betting scandals in Britain involving sports, particularly in the racing industry, the aim is to have the newly-licensed operators also share information that would relate to irregular or suspect betting with British authorities, which includes not only the Gambling Commission but also the various governing bodies who oversee sporting activity in the UK.

Obviously the operators would be contributing toward their own regulation, and that involves the collection of levies, this coming in the wake of the move of two very prominent UK operators, Ladbrokes and William Hill, to locations that are offshore. They have moved to "white listed" locales, which have been approved by the government, to be free of such taxation, which is designed to benefit the horse racing industry in the UK. The "white listed" jurisdictions include Gilbraltar, the Isle of Man, Malta, Antigua and Alderney.

The new regulations, which are not in effect yet and are, for the time being, in a consultation period, would seek to obviate the usefulness of such a move. Some operators who are already complicit with UK regulations may welcome it, because it could knock out rival companies. Others are no doubt engaged in internal consultation as to how to plot strategy relative to the proposed regulations. Still others could care less, preferring to focus on the United States, which is by far the biggest market.

"Online gambling has changed significantly in recent years with many European countries taking new approaches to regulation," according to Sutcliffe. "It would be wrong of us to stand still where things are changing around us - especially where the protection of British consumers may be at stake."



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