Remote Gambling Issues Stirring Debate with UK Bil

12 November 2004

More snags have delayed a government plan to overhaul the UK's gambling legislation after members of the House of Commons expressed some concerns over portions of the bill pertaining to remote wagering and the introduction of "super casinos" in the UK.

The latest rift comes just a week after the Department of Culture, Media and Sport made some concessions to the bill allowing it to pass an initial reading in the parliament.

The new bill, which allows for local authorities to ultimately decide if they want Las Vegas-style mega casinos or not, was scheduled for a line-by-line examination on Thursday. That hearing was pushed back to Tuesday after some issues were raised.

"We delayed it because we are still reflecting on the points and concerns that have been raised about casinos," a DCMS spokesman said.

The Tories, who have been pressing for a cap on the number of casinos that could be built, said that the Government appeared to be backing down from the bill's original goals.

"We welcome the fact that it appears the Government is preparing for a climb-down," said shadow culture secretary John Whittingdale. "The Government has had three years to get this bill right. The emergency postponement of consideration of crucial provisions relating to casinos shows the chaos that the Government's policy is now in."

The proposals in the bill for super casinos have been hugely controversial.

Culture Secretary Tessa Jowell came under fire from MPs on all sides of the House - including many Labour backbenchers - when the bill was given its Commons second reading earlier this month.

Loophole with Minors' Debit Cards?

For much of the early stages of the Gambling Bill's time in Parliament the remote gambling issue, which would pave the way for licensed casinos and sports book operators to return onshore by increasing regulations and establishing tax schemes that could be in line with offshore jurisdictions, remained under the radar screen of MPs.

That changed this week when concerns were raised over minors being able to access online gambling activities via mobile phones and their credit cards.

The Gambling Bill contains a clause that could allow an adult to use a child's debit card to rack up huge losses before getting them cancelled by claiming the child had placed the bets.

Section 79 of the bill, "Return of Stakes to Children," states that any operator who accepts wagers from minors would be forced to pay back any money gambled once they become aware that the customer is underage.

If the minor receives winnings from the operator prior to the company becoming aware of the users age, those winnings can't be collected back.

It is that clause that has caused some to speculate that adult-aged gamblers might find a loophole in the bill by establishing an account with a minor's debit card and collecting winnings on it but then claiming the activity was conducted by a child as soon as the losses start mounting up.

Most operators have remained tight-lipped on the issue for fear of appearing to align themselves against groups that want to block minors from gambling.

The industry's lobbying efforts are due to start in earnest next week as the bill moves on to the committee stage in the House of Commons.

Michael Smeaton, remote gambling specialist at GamCare (a group that helps educate and counsel problem gamblers), said the clause is open to interpretation and the burden of finding out the age of users should be on the operator, and not the government.

"Operators should use age verification software - this provides even more incentive for them," he said. "We can't reach the situation where operators are pursuing children for debts. That would be completely unacceptable."

Without having the ability to back check closed-circuit TV feeds that are available in land-based betting shops and casinos, age verification software might be the only solution for remote wagering operators, he said.

Reports have indicated that some remote gambling operators are formulating an alternative provision to Section 79, but any changes to the bill will have to satisfy both MPs and the DCMS.

Concerns over Mobile Phone Betting

Liam Byrne sits on the House of Commons Committee examining the Gambling Bill and he feels laws on Internet betting need to be tightened. Byrne is concerned that the expansion of the gambling industry to mobile phones could have an adverse effect on minors.

He is drafting a proposal that would prevent bookmakers and online casinos from offering their services to children who have the latest mobile phones and wireless devices.

The phones, which feature high-quality color displays, can be used in a similar way to a home computer.

"A child with one of these phones could operate their own casino from the school cloakroom or playground," he said.

A survey of 38 Internet gambling sites by children's charity NHC found that only seven had controls in place to stop children from using them.

"Online gambling is already a huge industry," Byrne said. " This industry is about to move on to mobile phones in a big way. These 3G phones are the next big thing and they are going to be very popular. The Gambling Bill does introduce better regulation for Internet gambling. But I don't think enough attention has been given to mobile phones."

Byrne has plenty of time to add his imprint to the bill.

The bill is expected to remain in committee stage for around 18 weeks before returning to the House of Commons for its third and final reading.

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