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New Licence Condition on Gambling Advertising comes into force at the end of this month

The Gambling Commission has decided to introduce a new licence condition to curb the advertisement of gambling products on websites showing unauthorised content. The new condition will come into force on 31 October and will apply to all operators licensed by the Commission, whether remote or non-remote.

This development has come about as a result of the Commission’s consultation between 30 September and 30 December last year on the wider issue of the prevention of crime associated with gambling. Whilst that consultation’s primary focus was on measures to prevent money laundering, it also set out the Commission’s concerns about gambling advertising appearing on pirate websites providing unauthorised access to copyrighted content. Research has established that advertising for gambling products features disproportionately heavily on such websites, to such an extent that the main culprits, in the sense of allowing their advertising to appear on websites functioning illegally, are gambling companies.

Why should the Commission be so concerned about this issue? The answer lies in the fact that it considers gambling operators to be supporting these illegal websites by placing their advertisements there. This means that, in the Commission’s view, they are effectively funding crime. This, clearly, is in direct conflict with the first licensing objective under the Gambling Act.

The Commission therefore issued a short supplementary consultation to look at dealing with this issue, which ran from 9 May to 20 June this year, off the back of the initial, wider, consultation.

During the course of the supplementary consultation process, the Commission did acknowledge that gambling operators had already been working with organisations such as the City of London’s Police Intellectual Property Crime Unit (PIPCU) and the Federation Against Copyright Theft (FACT), using tools already at their disposal such as commercial content verification software, and already taking action against their affiliates who were found to be breaching the rules. However it considered the action taken thus far to be inadequate and unsustainable. It described the current approach as merely reactive, arising largely from the Commission itself bring to major operators’ attention the fact that their advertising is appearing on illicit websites. Despite this, the Commission noted, such advertisements continue to appear and hence it has concluded that additional measures are required to tackle the issue.

The Commission published its response to the consultation in July, in which it noted respondents’ concerns that it was seeking to proceed by way of a new licence condition, rather than by a new ordinary or social responsibility code provision. Nevertheless, the Commission has decided to press on with its plans for a new condition: it does not consider an ordinary code provision to carry sufficient weight commensurate with the seriousness and persistent nature of the problem and further thinks a social responsibility code provision inappropriate, because these are designed to ensure consumer protection, rather than to combat crime. These factors have led it to the conclusion that a new condition is the correct way to proceed.

The Commission has, however, taken on board respondents’ alarm surrounding the difficulty in controlling the actions of third party affiliates. Of course, there is already a social responsibility code in the LCCP requiring operators to take responsibility generally for the actions of third parties with whom they contract for the provision of any aspect of their business related to the licensed activities. However the Commission still sees the need to introduce a specific requirement relating to advertising on pirate websites by affiliates. That said, it has acknowledged the concerns raised by some respondents to the consultation, who flagged up the speed with which advertisements often appear and the very large number – sometimes running into the tens of thousands – of affiliates they use.

As a result, the new condition will introduce an absolute requirement on operators to ensure that they do not, themselves, place digital advertisements on websites that provide unauthorised access to copyrighted content, but the obligations for operators surrounding the actions of third parties will, by contrast, only extend to taking all reasonable steps to ensure that they do not do so and to taking the appropriate steps if they do, including providing within their agreements with third parties the right promptly to terminate the agreement, subject always to the relevant dispute resolution provisions, in such an event.

Operators will be concerned as to how they will ensure that they comply with the new requirement from the end of this month in a “real life” environment. There are various practical steps that they can take to ensure that they do.

PIPCU maintains, and regularly updates, the so-called Infringing Websites List (IWL). This can be obtained via their website:

Operators should obtain access to this and monitor it on a regular basis to ensure that they themselves do not place any advertisements on the sites listed. In addition there exists, as mentioned above, various commercial content verification software that they can use. Needless to say, if operators discover that advertisements for their services have been placed on illicit websites, they should take immediate action to have them removed. Not only that, but they should ascertain how it was that this came about and keep a record of their investigations, findings and remedial steps taken. Operators should also review their agreements with affiliates before the new licence condition comes into force to make sure that they do include a provision permitting them to terminate the agreement in cases where the affiliate does place an advertisement on a pirate website, and introduce, document and implement a clear policy on how they will deal with breaches. Of course, affiliates should themselves regularly and carefully monitor the IWL and they should be encouraged to do so.

If you have any concerns about compliance with the new condition, please do not hesitate to contact me or one of the team.