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One Thousand Offshore Gambling Websites Face UK Marketing Ban

by Robin Pilgrim, LawAndTax-News.com, London

13 August 2007


A crackdown by the UK government on gambling adverts from places that don’t meet the country's strict new regulatory standards will lead to about one thousand gambling websites based in offshore jurisidctions being banned from advertising in the UK, the Department for Culture, Media and Sport has warned.

Regulations laid in Parliament on August 9 use new powers contained in the Gambling Act 2005 to ban gambling adverts from companies operating outside the European Economic Area (EEA). The move means that some popular gaming websites will not be able to advertise in the UK from September 1st 2007, when the Gambling Act comes into force.

The EEA comprises all member states of the EU plus Iceland, Liechtenstein and Norway. In this case, it also includes Gibraltar.

Independent research suggests there are around 2,300 gambling websites worldwide. Antigua is considered to have the largest number with around 537 sites, followed by Costa Rica (474), Kahnawake (Canadian Reservation) (401) and the Netherlands Antilles (343).

Jurisdictions which wanted to be exempt from the ad ban had to pass a stringent assessment of their regulatory standards, including the ability to demonstrate that they adhere to fair tax principles, in particular, openness, equal availability and equal treatment.

The Secretary of State for Culture, Media and Sport, James Purnell, has rejected applications to join the exempted ‘white list’ from Alexander (Canadian Reservation), the Netherland Antilles and Tasmania. Applications from Kahnawake and Antigua are still being considered.

Gambling operators in jurisdictions that did not apply to be white-listed are also automatically banned from 1st September. These include major online gambling centres such as Costa Rica and Belize.

Sites such as Betfred Casino and Poker, Interpoker.com and Littlewoodscasino.com are all currently based in the Netherland Antilles, a non-white listed jurisdiction, according to the UK government.

For companies not based in white-listed jurisdictions to be able to advertise in the UK, they need to move to the EEA or a jurisdiction on the white list, or the jurisdiction in which they are based needs to successfully re-apply for a place on the white list.

Only the Channel Island of Alderney and the Isle of Man were able to demonstrate that they had in place a rigorous licensing regime designed to stop children gambling, protect vulnerable people, keep games fair and keep out crime. Countries in the EEA however did not have to apply to be white-listed.

James Purnell stated that:

“I make no apology for banning adverts for websites operating from places that don’t meet our strict standards. Protection is my number one priority. The fact that only Alderney and the Isle of Man have been able to meet the high standards demanded by our white listing criteria shows how tough the Gambling Act is. Indeed white listing has actually helped drive up regulatory standards in some countries."

“The Isle of Man, for example, has made significant improvements to their regulatory regime in order to secure a place on the white list. This includes requiring all licensees to make contributions to problem gambling research, education and treatment in line with requirement on UK operators.”

The ban will apply to all forms of gambling advertising from excluded jurisdictions including TV, radio, newspapers, magazines, taxis, buses, the tube and some websites. If operators, publishers, broadcasters and advertising companies break the rules, they could face fines or even imprisonment.

The Department for Culture, Media and Sport, will keep under review Alderney and the Isle of Man’s regulatory regimes, to ensure that they continue to meet the white list criteria.

Figures recently published by the Gambling Commission found that over the four quarters to June 2007, 8.6% of the 8,000 adults surveyed had participated in at least one form of remote gambling in the previous month. If those only playing the National Lottery remotely are excluded, 5.9% of respondents had participated in remote gambling.

A comprehensive report in our Intelligence Report series examining offshore e-commerce and online gaming is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report6.asp
TAGS: Curaçao

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