How the new Gambling (Licensing and Advertising) Act 2014 can aid the fight against match-fixingThomas Barnard
The Gambling (Licensing and Advertising) Act 2014 (the “Act”) will come into force on 1 November 2014.1 It is hoped that the Act will offer at least some assistance in combating match-fixing in sport, and this article seeks to explain why and how that may be achieved, before looking at whether that is in fact likely to be the case. It also looks at the role of the Gambling Commission (the “Commission”) under the new legislation.
The key provisions of the Act
The Act introduces several key provisions to the Gambling Act 2005, as follows:
- A requirement that remote operators (i.e. those operating outside of Great Britain) hold a UK operating licence in order to provide gambling facilities to customers in Great Britain.
- A requirement to hold a UK operating licence in order to advertise gambling facilities in Great Britain. Previously, operators based in the European Economic Area, Gibraltar and ‘white-listed’ jurisdictions (Alderney, Isle of Man, Tasmania, Antigua and Barbuda) did not have to obtain a licence.
- A requirement that remote operators pay gambling duty on UK revenue in Great Britain, regardless of where the operation is domiciled or has its seat of administration for tax purposes. The duty is currently 15% of gross gambling profits on all transactions with customers whose usual place of residence is in the UK. This is introduced by the Finance Act 2014.2
Following the commencement of the Act, only gambling operators licensed by the Commission will be permitted to advertise to consumers in Great Britain.3 Carriers of gambling advertising, such as sports clubs and governing bodies, will need to ensure that they only partner with licensed operators for their activities in Great Britain. Likewise, remote gambling operators will only be able to supply services to customers in Great Britain if they are licensed by the Commission.
How will this combat match fixing in sport?
So far as combating match-fixing is concerned, the Act may assist in two ways:
- It requires overseas operators offering facilities in the UK to obtain a licence from the Gambling Commission. This brings with it a responsibility to report suspicious activity; and
- It will generate revenue from bets placed in the UK with overseas operators.
The reporting requirement
First, the requirement to hold a UK operating licence to advertise and / or provide betting facilities to customers in Great Britain will require any such licence holder to report suspicious activity directly to the Gambling Commission. The reporting requirements are set out in the Commission’s Licencing Conditions and Codes of Practice (2014) (the “LCCP”).
Currently, only those entities operating in Britain require a licence from the Gambling Commission to operate. As such, overseas or remote operators – who are quite able to offer their services in Britain via the internet – are able to operate free of Great Britain’s domestic legislation which already requires the reporting of suspicious activity. 4 This causes a problem, since it is widely accepted that a great deal of illegal betting occurs outside of the UK (most notably in the Asian markets) which goes unreported to the Commission.5 Although the bets may be placed overseas, recent cases have shown that the match fixing itself may occur on British soil.
The Commission has issued guidance on the new reporting requirement.6 In summary, the Act requires remote operators licenced by the Commission to report suspicious activity to the appropriate body.7 Suspicious activity includes suspected money laundering and gambling offences. The “appropriate body” to which the remote operator has to report depends on the circumstances of the suspicious activity but, where the remote equipment is based in Great Britain, the requirement is to report to the National Crime Agency (“NCA”); in most other circumstances the requirement is to report to the operator’s domestic “Financial Intelligence Unit”.8 Before proceeding with the transaction, the remote operator will be required to obtain the Commission’s authorisation to do so.
Pursuant to section 15.1 of the LCCP, licensed betting operators must also provide details of suspicious betting activity to relevant sports governing bodies. The licensed operator must supply information which they suspect may:
- Lead the Gambling Commission to consider making an order to void a bet; or
- Relate to a breach of a rule applied by that sport governing body.
The information provided under section 15.1 of the LCCP must be sufficient to conduct an effective investigation.
Generation of revenue
Secondly, and less directly, the requirement to pay duty on profits generated from UK customers,9 wherever the remote operator is based, may also assist to clamp down on match-fixing. The revenue will, in theory at least, be available to fund investigations into suspicious betting activity.
One criticism of the Act is that Parliament’s real intention in passing it was to increase tax revenues. Prior to the introduction of the Act, the pre-existing taxation regime allowed for remote operators to offer services in the UK without paying tax within this jurisdiction. That not only created an unfair advantage for the remote operators, but meant that HMRC lost out on revenue.10 The Act, in part, reverses that inbalance.
Will the Act help to combat match fixing in sport?
It is difficult to criticise the Act for being anything other than a step in the right direction. However, whether it will in fact combat match-fixing remains to be seen.
On one view, the reporting requirement will at least provide the Commission (or overseas Financial Investigation Units where appropriate) with greater volumes of intelligence. That intelligence will in turn be shared with the appropriate investigative and law enforcement authorities and sports governing bodies, making it easier for them to carry out effective investigations and prosecutions.11
That said, previous prosecutions led by the NCA have, in the main, resulted from investigative journalism, and not initially from intelligence available to the Commission.12 If that is because the Commission has not previously had the intelligence available to pass to the NCA, the Act may offer some assistance and change the status quo. If, however, it is because the NCA does not have the resources to deal with and follow-up on the intelligence, then the Act may be of little assistance.
There is also the possibility that the Act will serve to push illegal betting underground. With the increased risk of detection posed by the Act to organised crime syndicates, it is highly likely that such groups will look to black (underground) markets in the future. In that case the Act is likely to have little impact on match fixing in sport, and particularly match fixing in Great Britain. It could well be said that it will only serve to make detection, and subsequent prosecution, harder.
Only time will tell if the Act is effective and by itself it may not be sufficient. Yet as a starting point, it is hoped that the Act is a tentative step in the right direction, and one which is taken with (partly) a view to clamp down on match fixing in sport.
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- Tags: Anti-Corruption | England | Finance Act 2014 | Gambling (Licensing and Advertising) Act 2014 | Gambling Act 2005 | Gambling Commission | Match-Fixing | National Crime Agency (NCA) | Tax Law | United Kingdom (UK) | Wales
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