Gambling Law Update

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With the final provisions of the Gambling Act 2005 coming into force on 1 September 2007, the UK gambling industry has bowed to government pressure and agreed to a voluntary code of practice which includes a ban on the display of gambling operators' logos on children's replica kits. The new code will oblige gaming companies which sponsor sports clubs to remove their branding from children's shirts. However, the restrictions will not apply to sponsorship deals signed prior to 1 September 2007.

Although a recent consultation carried out by the Gambling Commission did not conclude that it was necessary to impose a ban on branding on children's shirts, it has been reported that the DCMS Secretary, James Purnell, told industry representatives that he would not hesitate to exercise the rights reserved to the Secretary of State under the Gambling Act to impose further legislative restrictions on the advertising of the gambling industry unless they tightened their own voluntary rules. The move comes soon after the Portman Group made any opposition to such Governmental pressure virtually untenable by volunteering its own self-imposed ban on the inclusion of branding on children's replica shirts within alcohol sponsorship deals entered into after 1 January 2008. To read a more detailed analysis of the gambling industry's decision to implement a self-imposed ban on logos on children's replica shirts click here. Under the new voluntary code, there will also be a prohibition on gambling advertisements being broadcast before 9.00 pm and all such advertisements must carry 'social responsibility signposting' similar to that displayed in alcohol advertising.

On a separate note, the UK government has reportedly agreed to support five sports, namely football, rugby union, rugby league, cricket and tennis, in their approach to bookmakers for a voluntary contribution based on a share of each sport's respective betting revenues. The sports consider that they should be entitled to such amounts primarily on the basis that the growth of the sports betting markets in relation to their sports represents a threat to the integrity of their events and necessitates higher policing costs.

Meanwhile, the European Commission has formally requested that France amends its laws preventing overseas gaming companies from operating within the country (which, by way of example, stopped Team Unibet.com from competing in the Tour de France earlier this year despite the team's offer to race under the branding of its bicycle supplier only). The request follows the Commission's consideration of the French response to its earlier letters of formal notice sent in April and October 2006 whereby the Commission had sought to verify whether the restrictions in question were compatible with Article 49 of the EC Treaty which guarantees the free movement of services. The more recent formal request takes the form of "reasoned opinions", the second stage of the infringement procedure laid down in the EC Treaty. Following a recent extension of time, the Commission has given France until 29 October to respond to its inquiry regarding the restrictions. If there is no satisfactory reply by that time, the Commission may refer the matter to the European Court of Justice. Although France announced in June that it would reject the Commission's call to amend its laws, the situation may now have changed following a decision by France's top court to overturn a ruling that banned a Maltese firm, Zeturf, from offering online horse race betting in France. The rehearing of the case is unlikely to take place until next year.