A proposed code of practice for the Gaming industry in Gibraltar is currently undergoing a process of consultation between the Gibraltar Regulatory Authority and the industry. Steven Caetano reviews the proposal in a two-part article for our Communique. This, the first of two items on the subject, deals with the reasons behind the move, background to the Gibraltar e-gaming industry and the main thrust of the proposed code.
Why introduce a Code of Practice?
The Gibraltar online gambling industry as we know it today has cemented itself as the main pillar of the local economy. The e-gaming industry seems to have largely survived the effects of the US ban as a whole, and whilst some land based sectors have shown signs of decline due to, for instance, the UK smoking ban, the Gibraltar based providers stand firm.
The timely introduction of the UK Gambling Act which led to Gibraltar based providers being able to advertise in the UK has proved significantly positive, and it is quite common nowadays to see the adverts of most of these major players on UK prime time television.
It has to be said that the Gibraltar e-gaming industry has come a long way since the doom and gloom of the US ban, and particularly due to a variety of factors, not least the geographical advantage of this jurisdiction (within the EU) which, allied to unparalleled levels of regulation, makes Gibraltar a well established proposition for any major gambling company in the world.
Given the wide recognition of the Gibraltar Gambling Industry as one of the world’s most dynamic and innovative industries and already (and for quite some time) being the home to many of the world’s leading online gaming operators, the Government of Gibraltar and the Gambling Commissioner have recently commenced a consultation process to ensure that standards under which its licensees operate remain at the forefront of sound and effective regulatory practices and controls.
To this end the established regulatory bodies in Gibraltar, whilst recognising the need to ensure customer protection and safeguard wider social responsibility, have sought to provide guidance in interpreting significant provisions of the Gambling Act 2005 (“the Act”) to further enable operators and industry members alike to gain a greater understanding of the statutory framework to which they are subject. The underlying objective of this effort is to ensure proper and proportionate licensing and regulatory controls leading to a fair, secure and transparent environment, whilst at the same time ensuring that such safeguards do not curtail business profitability and dynamism.
The intention is to finalise the code of practice by October 2008 with a view to implementation soon thereafter.
The Licensing and Supervision of Gambling Activities in Gibraltar
The licensing authority for Gibraltar is currently the Minister responsible for Gambling, who is presently the Chief Minister in his capacity as Minister for Gambling and this includes the Gambling Division of the Ministry of Finance of the Government of Gibraltar. The Minister’s responsibilities are administered through the Finance Secretary’s office at No. 6 Convent Place.
The Gambling Commissioner who regulates the Gibraltar gambling industry is the Gibraltar Regulatory Authority (“the GRA” or “the Commissioner”). Section 6 (4) of the Act requires the Commissioner to ensure that licensees act within the terms of their license agreements and the Act in a way that maintains the good reputation of Gibraltar.
The principle method by which its responsibilities will be exercised is:
(a) Through regular and direct liaison with key individuals in the industry;
(b) Risk based programmed visits and examinations of relevant equipment and information;
(c) Consideration of licensees reports as agreed or considered necessary;
(d) The examination of complaints from the public including any underlying or systemic issues they identify; and
(e) Advising the Minister, the Licensing Authority and the industry as necessary.
What needs to be borne in mind is that the Commissioner has the power under the Act to take the steps to initiate the revocation of a licence or amendment thereof or where necessary initiate Court proceedings against a particular licensee or individual believed to be in breach of the Act or any regulations or codes issued thereunder. Such action is not taken lightly and therefore the policy of the Commissioner is to work with the industry to ensure that such action never becomes necessary.
Interpretative Guidance
It is intended that the final version of the new Gambling Code of Practice will provide interpretative guidance to the Gibraltar Gaming Industry at large. This will be the first code of practice issued under the provisions of the Act.
It is largely recognised that whilst many of the Act’s provisions are self evident and require little elaboration, some areas require a degree of analysis, for example:
(a) The provision of routing reports to the Gambling Commissioner (Regulatory Returns);
(b) Technical standards;
(c) Anti-money laundering measures;
(d) Responsible gambling practices; and
(e) The provision of operating procedures or internal controls.
Practical distinction between land based and online providers
It is noteworthy that the proposed code distinguishes between holders of remote and non-remote gambling licences despite the vast majority of the industry lying in the remote sector. Notwithstanding, the Act and many of its provisions, also apply to land based operators.
Key Definitions
The Act makes illegal the provision of any Gambling facilities in Gibraltar (i.e. betting, gaming, machine based slots and lotteries) unless the provider of the gambling holds an appropriate licence or the gambling is excluded by way of exemption in special circumstances such as domestic social fundraising functions etc.
The different forms of gambling although dealt with independently under the Act under separate definitions have the widely understood and conventional definitions attached to them. For instance gambling is a reference to gaming, games of chance and betting and non remote gambling is gambling to be conducted on a face to face basis although this includes telephone betting undertaken by licensed bookmakers in approved premises.
A remote gambling licence will be required under the Act where a licence holder has at least one piece of gambling equipment situated in Gibraltar.
Responsible Gambling
Remote operators are expected to have systems in place to enable customers to request to be self excluded and for such request to be dealt with immediately. This should include providing specific information on the process and consequences of self-exclusion. Self-exclusion systems modelled on established industries bodies such as gamecare, Gamble Aware, E-cogra and the RGA would be deemed as effective systems for the purposes of fulfilling this particular requirement.
Notwithstanding this, self-excluded persons could very well circumvent the provisions of any self-exclusion methods and when this occurs the affected operators should not normally repay deposits to the customer but instead to a charitable cause.
Duty to Publicise Rules
All licensees are expected to publish their rules where they are visible and accessible to all those who visit or use their facilities for gambling. These include the terms and conditions of use as well as the house rules or game rules relevant to the game or service being provided.
The meaning of ‘readily accessible’ is interpreted as broadly a live link from the home pages, about us page, and customer registration pages of the relevant websites to a dedicated page displaying the relevant rules and terms and conditions.
Where a remote licence holder controls a series of websites or brands or operates through joint ventures the rules should be accessible as above for each specific website.
Terms of use and games rules are usually under constant review by providers, and this is usually due to specific customer requests or systemic errors leading to misinterpretation or abuse. It is therefore sensible to maintain an adequate level of supervision and if in doubt, always consult local counsel or the GRA to ensure that the general terms and conditions (and rules of play) comply with the Act and the terms of the operating licence.
In the second part of this article, Steven will review more details of the proposed code including data protection matters, equipment requirements and offering his conclusion on the effect the proposed code might have if and when implemented.