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New Rules for UK Sports Sponsorships

Nov 07, 2014 - by Monica Erdei
UK gambling regulator has come up with new rules for sports adverts and sponsorships

UK gambling regulator has come up with new rules for sports adverts and sponsorships

Sponsorships offered by betting companies without a UK license must come with a disclaimer.

After the court rejected the Gibraltar Betting and Gambling Association’s request to overturn new UK gambling laws, authorities are now going after British sports clubs and teams that closed sponsorship agreements with unlicensed betting companies.

The UK Gambling Commission is now asking that all adverts promoting operators without a British permit include a message saying their services are not available for UK players. Since the regulator did not include any clear instructions in its letter to sports governing bodies, clubs and teams are not sure how to approach the issue.

The new rules created a lot of confusion. Should logos on posters or flyers include an asterisk to a disclaimer? Do they need to mention this on players’ T-shirts too? For now, these questions remain unanswered.

PokerNews: UK Gambling Commission Warns Sports Teams About Deals with Unlicensed Operators

Nick Tofiluk, the director of the United Kingdom Gambling Commission (UKGC), sent out a letter to all sports governing bodies in the country, to warn them about the dangers of closing sponsorship deals with betting companies that did not apply for a UK license, as requested by the new regulations which came into force on November 1.

“You may be aware that all remote gambling operators selling into the British market, whether based here or abroad, will be required to hold a Gambling Commission license to transact with British based consumers,” Tofiluk wrote.

“We are aware that in some cases commercial partnership arrangements (which include sponsorship) are in place between sports clubs or bodies and remote gambling operators who do not hold a Commission license,” he continued.

In its letter, the regulatory body adopted a firm position on the matter, stating: “Those operators cannot in our view advertise their betting services without both making it clear in the product as advertised and in reality that betting is not available to those in Britain.”

As a consequence, such adverts will have to be accompanied by a disclaimer, and sports teams that don’t follow these rules risk being prosecuted.

“This letter seeks to draw to your attention the risks to sports clubs and bodies of maintaining such relationships”, the letter said, clarifying that those “risks” include committing an offence by breaking the law, as well as jeopardizing the state’s efforts to combat match fixing and betting corruption.

OutLaw.com: Regulator’s approach risks future of British sport sponsorship deals with offshore gambling providers, say experts

Law experts say the new guidance issued by the UK Gambling Commission could complicate things for sports clubs and teams looking to close shirt sponsorship deals with foreign-based betting companies.

Gambling law specialist Susan Biddle of Pinsent Masons, the firm behind Out-Law.com said she could “foresee practical problems if the requirement that the prohibition on play by British consumers has to be made ‘clear in the product as advertised’ means the prohibition has to be made clear as part of the advertisement or sponsorship itself.”

“For example, would players’ shirts, replica shirts and stadium boards which carry a sponsor’s logo each have to include an asterisk to a disclaimer somewhere else on the shirt or board?” she asked.

“Such a requirement would seem in practice to mean that sponsorship or other advertising by unlicensed offshore remote gambling operators will not be possible even if as a matter of practice they can achieve 100% successful blocking of British consumers,” the lawyer explained.

GamingZion: New British Gambling Laws Come into Force

Despite all the controversy, the new British gambling laws came into force on November 1, after the Gibraltar Betting and Gaming Association’s (GBGA) attempt to overturn the Government’s decision in court failed last month.

The new regulations and the upcoming 15% point on consumption tax coming this December have scared away some betting companies, who preferred to withdraw from the British market.

As of November 1, online gamblers can bet on sports scores using websites that have received approval for a continuation license. Remote operators have to apply for UK permits and pay an additional tax, regardless of where they’re located and even if they already hold a valid license in another jurisdiction.
“The Government announced that this law was introduced with the express intention of addressing concerns it said it had about the protection of consumers. The measures introduced through this Act are neither reasonable nor proportionate to achieving that goal and are likely to have adverse consequences for consumers,” the GBGA wrote in a statement, a few months ago.

The introduction of the Gambling (Licensing and Advertising) Act 2014 will be followed by an increase in taxes. Starting December 1, the Government is changing its rules for General Betting Duty (GBD), Pool Betting Duty (PBD), and Remote Gaming Duty (RGD). The changes will affect both offshore casino and sportsbook operators, as well as betting shops across the country.

According to the UK Government’s website: “Gambling activities are currently taxed on a ‘place of supply’ basis. This means that if you’re supplying gambling from the UK, you pay tax on all your gross gambling profits. Operators supplying UK customers from outside the UK pay no UK gambling taxes.”

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