Part of this content first appeared in Gambling Compliance on 30th May 2017.
As part of its mission to “keep crime out of gambling”, the UK Gambling Commission is asking licensees to submit data on what their sister companies are doing in other markets because “revenues generated in ‘grey’ markets could be used to gain a commercial advantage in Great Britain”.
Since 2014, licensees have been asked to explain the legality of their business in other countries where that business represented more than 3% of total revenue. Wiggin associate Chris Elliot believes that the actual number of notifications may have been small, since because operators have only licensed a UK-facing unit that does 100 percent of its business in the UK.
“The commission is painting it as a slight change, but it is a broadening of the notification requirements,” he comments. The disclosure requirements make it clear that “demonstrating a coherent risk rationale is an ongoing obligation”.
The UK Gambling Commission is introducing a new requirement from April 2018 to notify it when revenue derived from a jurisdiction (by any entity within the licensee’s group exceeds 3% of the group’s total revenue (or 10% of the group’s total revenue where the group’s total revenue is less than £5m).
Whilst an increasing number of regulators are prepared to examine and assess legal rationales for the support of global revenues, only two regulators have made public statements with respect to suitability having regard to the derivation of .com revenue, being the Gambling Commission and the Division of Gaming Enforcement in New Jersey. Questions will continue to be raised as to whether the Commission should be concerned with the business of entities which are not (directly) within their regulatory purview.
To read more on this subject, please see this insight piece.