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Definitions and key concepts

Remote gambling

Remote gambling is defined in section 4 of the Act as:

(1) In this Act “remote gambling” means gambling in which persons participate by the use of remote communication.

(2) In this Act “remote communication” means communication using:

  • the internet
  • telephone
  • television
  • radio
  • any other kind of electronic or other technology for facilitating communication.

The previous list encompasses a variety of modern means of communication such as interactive television and mobile telephony, and is intended to ensure that the definition keeps pace with future developments in this field.

However, in order to ensure clarity as well as flexibility for the regulation of gambling, the Secretary of State may specify in regulations that a specified system or method of communication is, or is not, to be treated as a form of remote communication for the purpose of the definition.

Betting

Betting is defined in section 9 of the Act as:

Betting: general
(1) In this Act "betting" means making or accepting a bet on:

  • the outcome of a race, competition or other event or process
  • the likelihood of anything occurring or not occurring
  • whether anything is or is not true.

(2) A transaction that relates to the outcome of a race, competition or other event or process may be a bet within the meaning of subsection (1) despite the facts that:

  • the race, competition, event or process has already occurred or been completed
  • one party to the transaction knows the outcome.

(3) A transaction that relates to the likelihood of anything occurring or not occurring may be a bet within the meaning of subsection (1) despite the facts that:

  • the thing has already occurred or failed to occur
  • one party to the transaction knows that the thing has already occurred or failed to occur.

The Act does not provide a definition of the term ‘bet’, other than to state that, except where the context otherwise requires, ‘a reference to accepting a bet includes a reference to negotiating a bet’4.

The dictionary definition of a ‘bet’ is:

  • an agreement between two parties that a sum of money or other stake will be paid by the losing party to the party who correctly predicts the outcome of an event.

Pool betting

Pool betting is defined in section 12 of the Act as:

(1) For the purposes of this Act betting is pool betting if made on terms that all or part of winnings:

  • shall be determined by reference to the aggregate of stakes paid or agreed to be paid by the persons betting
  • shall be divided among the winners
  • shall or may be something other than money.

(2) For the purposes of this Act pool betting is horse-race pool betting if it relates to horseracing in Great Britain.5

Betting intermediary:

Betting intermediary is defined in section 13 of the Act as:

(1) In this Act 'betting intermediary' means a person who provides a service designed to facilitate the making or acceptance of bets between others.

(2) For the purposes of this Act acting as a betting intermediary is providing facilities for betting.

A betting intermediary is a person who provides a service to enable others to make or accept bets. Such a person does not, himself, partake in the bet. The definition includes betting exchanges.

It is important to note that there is a separate class of operating licence for betting intermediaries, and that the entitlement to make gaming machines available for use does not attach to such licences.

The Commission has adopted a common sense approach to the question of what constitutes ‘facilitating’ the making or acceptance of bets between others. For example, the Commission does not consider that merely placing advertisements about where to place bets or providing tips in a newspaper is sufficient to fall within the definition. In contrast, the offer of tipster services, whereby the tipster places bets on behalf of third parties in return for payment or commission would, in the Commission’s view, fall within the definition in section 13 of the Act (opens in new tab).

Likewise, making dedicated rooms available at race tracks, for example by equipping them with computer terminals and live racing feeds and marketing them as being available for people to use for betting would be likely, in the Commission’s view, to amount to facilitating the making or accepting of bets between others.

Remote operating licence

Section 67 of the Act defines the term ‘remote operating licence’ as:

(1) An operating licence is a "remote operating licence" if it authorises activity to be carried on:

  • in respect of remote gambling
  • by means of remote communication.

(2) A remote operating licence may not also authorise activity which is neither:

  • in respect of remote gambling
  • carried on by means of remote communication.

(3) An operating licence must state whether it is a remote operating licence or not.

It is important to note that a remote operating licence covers two distinct situations:

  • where the licensed activity is carried on ‘in respect of’ remote gambling
  • where the licensed activity is carried on ‘by means of’ remote communication.

'In respect of’ covers the situation where the player uses remote communication to participate in the gambling, whether or not the player and the operator are in different physical locations; for example use of the telephone to place a bet, the use of self-service betting terminals (SSBTs) to place a bet in a betting shop, or a player’s use of an electronic bingo terminal to play bingo in a bingo premises6.

‘By means of’ covers the situation where the operator uses remote communication to provide facilities for gambling or to carry out other licensed activities; for example the operator of the National Bingo Game uses remote communication to technically deliver the game although the game itself is not remote gambling because the players do not themselves use remote communication. Another example is a gaming machine supplier who supplies machine software by email.

Licence conditions

There are different types of licence condition that may be attached to operating licences under the Act:

  • statutory conditions imposed by the Act
  • general conditions and individual conditions (both of which are attached by the Commission)
  • conditions imposed by the Secretary of State.

Statutory conditions

Section 92 of the Act imposes a statutory condition on general betting operating licences as:

(1) A general betting operating licence shall, by virtue of this section, be subject to the condition that bets may be accepted on behalf of the licensee only by:

  • the licensee
  • a person employed by the licensee under a written contract of employment
  • the holder of another general betting operating licence.

(2) A general betting operating licence shall, by virtue of this subsection, contain an implied term permitting the use of postal services for the making of bets.

(3) The effect of the term implied by subsection (2) may not be disapplied or restricted by a condition attached under section 75, 77 or 78.

The Explanatory Notes to the Act explain that a general betting operating licence will be required by anyone wishing to accept or make bets by way of business (this includes negotiation of bets). If someone wishes to provide facilities merely for other people to accept and make bets, then the appropriate operating licence will be a betting intermediary operating licence, not a general betting operating licence; the latter is relevant for people who are themselves making or accepting bets in the course of a business7.

Section 92 (1) of the Act sets out who is empowered to accept bets under the terms of a general betting operating licence, this will be:

  • the licence holder
  • an employee of the licence holder
  • any other holder of a general betting operating licence. No other person may accept or make bets under the authorisation of a general betting operating licence.

Section 93 imposes a statutory condition on pool betting operating licences as:

(1) A pool betting operating licence shall, by virtue of this section, be subject to the condition that bets may be accepted on behalf of the licensee only by the licensee, by a person employed by the licensee under a written contract of employment, by the holder of another pool betting operating licence, or in accordance with subsections (2) or (3).

(2) 8

(3) The holder of a pool betting operating licence that authorises (whether expressly or impliedly) the provision of facilities for football pools may in writing authorise an adult or young person:

  • to make documents or other facilities available in connection with the licensed activities
  • to receive entries on behalf of the licensee
  • to receive payments on behalf of the licensee
  • to make payments of winnings on behalf of the licensee.

(4) An authorisation under subsection (3):

  • shall be treated for the purposes of section 33 as if it were a pool betting operating licence
  • shall have no effect in relation to any activity, entry or payment that relates partly to a football pool and partly to another form of gambling.

Thus, football pools betting may be offered in betting premises without the need for a betting intermediary, or any other licence. However the authority to do so (issued by a pool betting licensee) must be to an individual not to a company, partnership or other corporate entity.

In similar, though not identical terms, section 94 (2) and (3) of the Act provides that:

  • (2) The holder of a licence to which this section applies9 may in writing authorise a person to provide facilities for horse-race pool betting.
  • (3) An authorisation under subsection (2) shall be treated for the purposes of section 33 as if it were a pool betting operating licence authorising the provision of facilities for horse-race pool betting.

As a consequence, pool betting on horse races may be offered in licensed betting offices without the need for either a pool betting or a betting intermediary licence where a written authorisation from Tote (Successor Company) Limited is held. However, there are no similar authorisations available for other forms of pool betting.

General conditions imposed by the Commission

Sections 75 and 76 of the Act concern general conditions, which the Commission may specify for an operating licence or a class of operating licence and have general application. In addition to the general conditions that apply to all operators, the Commission has made general conditions that apply to non-remote betting operators and remote betting operators in the Licence Conditions and Codes of Practice (LCCP).

Of particular relevance to the issues covered in this note is condition 16 in LCCP. Under this condition an operator must offer a sufficient provision of the gambling activity named on the licence, in this case betting, in order to benefit from the ancillary machine entitlement10.

Importantly, ‘sufficient’ facilities for betting would be expected to generate the core level of betting to constitute a business, which is, in fact, a betting business and not an arcade.

Contract

Section 335(1) of the Act (opens in new tab) makes it clear that the fact a contract relates to gambling shall not prevent its enforcement.

Applying the normal principles of contract law, it follows that to create a binding contract the parties to the bet must have an intention to create legal relations and there must be:

  • an offer
  • acceptance of that offer
  • consideration for entering into the contract.

Both betting exchanges and other betting operators have contracts with their customers, but there are different sorts of contracts in play; the former may provide for the exchange to hold each party’s money and to owe other obligations to the customer, for example in relation to data security or other matters, but the exchange is not a party to the bets between its customers.

In the Commission’s view, it is important to identify who is partaking in the bet, as that will determine the nature of the licence that is required.

The Commission has also imposed a licence condition on operating licences that requires licensees to satisfy themselves that the terms on which gambling is offered are not unfair under the provisions of the Unfair Terms in Consumer Contracts Regulations 1999 and, where applicable, the Unfair Contract Terms Act 1977. It is also a Social Responsibility Code provision that licensees must be able to provide evidence to the Commission, if required, showing how they satisfied themselves that their terms are not unfair.

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Last updated: 17 October 2024

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