ENFORCEMENT
licensed industry that it would take action to protect the regulated industry from unlicensed and illegal operations. In 2021 the government increased the application and annual fees payable to the Gambling Commission. An element of the increase was to enable the Commission to increase its enforcement activity in tacking illegal online activity. The Commission has agreements with Internet service providers (ISPs) and payment providers that they will not service unlicensed operators and uses these very successfully to disrupt illegal activity. As part of its activity in tackling illegal activity on social media, the Commission succeeded in taking down nearly 400 illegal lotteries advertised on Facebook in the period 2020/2021 alone. The French regulator has also recently taken similar enforcement action against social media sites. In its advice to the government that informed last year’s White Paper on gambling reform, the Commission specifically raised concerns over the proliferation of unlawful raffle style sites and the fact that the prizes offered were encouraging those who could least afford it to buy tickets. Many of the schemes are structured in a way that it is actually more expensive to enter by an alternative “free” method and the Commission continue to receive a large number of complaints where either the prize advertised is not awarded or the closing date is changed, reducing the chance of winning for those who have already entered. There are strict rules in the UK’s Advertising Codes as to how such competitions are presented and promoted and the Advertising Standards Authority (ASA) do undertake significant enforcement activity in this field. If rulings are not complied with then the ASA has powers to refer cases to Trading Standards for prosecution. The government has confirmed in the White Paper that it will be reviewing the exemptions in the Gambling Act that permit “free draws” where there is a genuine choice of entering for free or paying to enter. It has also indicated that, given that parliament never intended that the exemption should extend to offering big ticket items such as cars and houses, it will introduce a form of regulation of promotions where the prize exceeds a prescribed limit. It has further indicated that promoters will be required by licence conditions to comply
anyone involved in such activity can expect to find themselves the focus of intense security and any so-called ill-gotten gains can be forfeit.” 4 In 2017, the Gambling Commission prosecuted two individuals for the operation of an illegal unlicensed gambling site, FutGalaxy.com, which targeted children. Its virtual currency “FUT” coins could be used to gamble and then be converted into FIFA coins that could be traded on a secondary unauthorised site operated by one of the defendants. Fines and costs orders totalling nearly £250,000 were imposed on the two defendants. One of the most recent cases involving the use of criminal powers has seen a significant gambling operator investigated by HM Revenue and Customs (HMRC) for offences under the Bribery Act 2010. The full facts of the case will not be made available until the ongoing investigation into allegations against individuals have been completed – this could take years if there are trials and appeals. However, the Deferred Prosecution Agreement between the Crown Prosecution Service (CPS) (as the prosecuting authority in the case (on behalf of HMRC) and Entain plc, approved by the President of the King’s Bench Division in a judgement delivered at Southwark Crown Court on 5th December, 2023 has potentially wide implications for gaming companies that “do business in the UK” wherever they are located given the extra-territorial application of the Bribery Act. 5 The financial penalty and disgorgement of profits in the case totalled £585m along with £10m in costs payable to the CPS and HMRC, and a charitable payment of £20m. This however does not reflect the wider financial impact on Entain in being required, as part of the decision, to withdraw from a considerable number of jurisdictions where their activity was “non-legal”. The extent of the impact of the judge’s categorisation of the terminology will only become known once the Statement of Facts is published. 6 Business Disruption Measures At the time of the implementation of the remote licensing regime in 2014, the Commission gave a commitment to the
4 Cleveland Police statement 5 For more see https://www.transparency.org.uk/bribery-act-and-adequate-procedures-guidance/Bribery%20Act#:~:text=The%20Bribery%20 Act%20has%20extra,reach%20of%20the%20Bribery%20Act. 6 Rex v Entain PLC - Deferred Prosecution Agreement | The Crown Prosecution Service (cps.gov.uk) https://www.cps.gov.uk/publication/ rex-v-entain-plc-deferred-prosecution-agreement
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IMGL MAGAZINE | APRIL 2024
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