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Is the operator offering betting or acting as a betting intermediary?

The answer to this question depends on who takes part in the bet.

If the operator is a party to the bet, then a general (or, as the case may be, pool) non-remote general betting standard operating licence will be required. A non-remote general (or pool) betting standard operating licence brings with it the entitlement to make gaming machines available for use¹², but in order to comply with the conditions of the licence sufficient facilities for betting must be made available on the premises.

If the operator is not a party to the bet (and is not operating under an authorisation in respect of football pool or hose race pool betting referred to earlier in this note), but is providing a service to allow two other parties to make and accept a bet, then the operator is acting as a betting intermediary and the appropriate licence is a betting intermediary operating licence¹³.

In order to assess whether an operator is acting as a genuine and compliant betting operator, the Commission will wish to understand the nature of the relationship that exists between the parties to the betting. In doing so, the Commission will look at¹⁴:

• who are the parties to the betting contract and the rights and liabilities of third parties under the contract
• whether the operator is simply facilitating access to the customer’s own account with another operator.

The Commission is aware, however, that some operators have devised arrangements whereby the operator is involved in the making and accepting of bets, but immediately thereafter lays off all the bets in question to a third party. These arrangements appear to be designed to enable the operator to make gaming machines available for use, in reliance on their general betting operating licence, but without carrying the normal risks associated with operating a licensed betting office. Such arrangements are likely to raise questions as to whether the operator is in fact providing sufficient facilities for betting in order to meet its licence requirements.

In deciding whether the contractual arrangements reflect the provision of betting as a primary gambling activity rather than an artificial device to enable machines to be sited, the Commission will consider:

• the operator’s liability under the contract and more generally the greater the degree of liability assumed by the operator, the more likely we are to consider the business is, in fact, a betting business and not an arcade
• the degree of control that the operator has over the terms and conditions of the betting contract
• the role the operator plays in deciding which markets are offered, negotiating bets, setting odds and determining terms and conditions (the Commission may also consider other factors)
• the business model of the operator; for example, whether profits or losses arise directly from the betting or the operator receives commission based on the volume of bets placed with another operator
• the extent to which the operator is responsible for settling bets and making payouts
• the extent to which the operator is protected from loss; for example, through indemnification by a third party
• the operator’s ability to manage money laundering and betting integrity risk and to meet the social responsibility code provisions for a general betting operator.

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Applying the previous principles to some examples of the types of arrangements the Commission has encountered

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Last updated: 26 July 2023

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