Elements of the Gambling Act 2005 have recently come into force, bringing about a number of changes to the regulation of the gambling industry. The Government anticipates that the Act will be fully implemented by late 2007. The Act modernises and codifies UK laws of gambling in a single piece of legislation. In particular it addresses the technological advances of recent years, by creating a licensing structure for ‘remote’ gambling as this form of gambling becomes more prevalent.
Section 4 of the Act sets out the definition of remote gambling. Remote gambling is defined as gambling in which people participate by the use of "remote communication". Remote communication means communication using the internet, telephone, television, radio or "any other kind of electronic or other technology for facilitating communication". This is designed to cover all forms of gambling where players are not face to face.
One of the major changes for the UK gambling industry brought about by the new Gambling Act 2005 is the regulation of remote gambling operations in this country. Whilst online betting has always been permitted under the Betting, Gaming and Lotteries Act 1963, the Gaming Act 1968 prevented the establishment within the UK of an online or other remotely operated casino.
For a traditional casino, there are a number of regulations regarding the way in which casino games can be played. This ensures that customers are not exploited by unscrupulous operators skewing the odds in their favour. The Government has been keen to ensure, particularly in the online environment, that sufficient safeguards were put in place to ensure fairness for customers. As a result, under the Act, licensing requirements are placed on the providers of software to be used in online gambling operations.
Under section 41 of the Act, an offence is committed if, in the course of business, a person "manufactures, supplies, installs or adapts" computer software for use in connection with remote gambling, other than in accordance with an operating licence. Again this provision is very wide and potentially means that a number of software providers, whose software is used for a variety of applications, not just remote gambling, would have to obtain an operating licence.
Although principally aimed at regulating those who actually generate the software used in gambling applications, its ambit is potentially much wider and could suggest that an operator based outside the UK may need to be licensed in order to provide its UK customers with the software necessary to take advantage of its services.