UK LEGAL
White label agreements and permission to advertise gambling in the UK
Northridge Law’s Melanie Ellis looks at the nuances and implications of the ever-evolving Gambling Act purview.
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n recent months, Premier league football club sponsors BC game (Leicester City) and 8xbet (Manchester City) have seen their .co. uk or .uk sites closed, yet these brands continue to be advertised on the front of football shirts in Great Britain. This has prompted many to ask what is going on, and why the sponsorship arrangements are able to continue in these circumstances.
To understand this, we need to take a short journey back in time. When the Gambling Act 2005 first came into force it needed to deal with the burgeoning online gambling market, which was not contemplated when existing gambling legislation from the 1960s was drafted. At that time, the largest online operators (such as 888 and PartyGaming) were based offshore. The new Act made it lawful for online gambling operators based in EEA and ‘white list’ jurisdictions (such as Gibraltar, Alderney and the Isle of Man) to advertise to and accept play from British customers.
An offence of advertising ‘foreign gambling’ applied to operators advertising here from any other jurisdiction, while an offence of advertising ‘unlawful gambling’ applied to operators who required a Gambling Commission (GC) licence for their provision of facilities for gambling but did not hold one. In 2014, prompted by the GC’s concern that it could not control the standards being met by these overseas operators, a ‘point of consumption’ regime was introduced. This meant that all of those operators wishing to continue targeting British consumers needed to
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obtain a licence from the GC. The ‘foreign gambling’ advertising offence was removed from the statute books, leaving just the offence of advertising gambling that requires a GC licence but is not subject to one.
We also need to explore the arrival of ‘white label’ operators. A gambling operator licensed by the GC may list any number of web domains on its licence, on which it is authorised to provide facilities for gambling under different brands. From the early days of the Gambling Act this enabled agreements to be reached between licensed operators and brands wishing to benefit from offering a gambling product, but not wanting to operate that product directly, for example a newspaper wishing to leverage its brand popularity with a new online betting site. Following the introduction of the ‘point of consumption’ regime in 2014, this opportunity was also taken by offshore operators who wanted to use their brand to benefit from revenues from the British market, without becoming licensed by the GC. Crucially, a website that is listed on the licence of a GC-licensed operator can be advertised in Great Britain without committing the offence of advertising unlawful gambling. More recently, as online gambling has grown in popularity around the globe, this advertising right has become as important as the ability to gain revenue from gambling transactions with British consumers. At the forefront of this development is advertising on football shirts. Whilst front of shirt sponsorships will end after the 25/26 football season, at the moment they
continue to be a key source of revenue for many clubs.
With premier league football hugely popular across the world, gambling brands primarily targeting other markets are just as likely to want to benefit from this advertising opportunity as GB-facing brands. White label agreements and the statutory basis of the ‘unlawful gambling’ advertising offence opened the door for this to happen. By entering a white label agreement with a GC-licensed operator, the gambling being advertised in Great Britain is subject to a GC licence, so no offence is committed. This is regardless of the fact that other sites are likely also being offered under that advertised brand (e.g. as a ‘.com’ rather than ‘
.co.uk’ site) under other offshore licences, targeting potentially more lucrative markets for it.
But what happens when the white label agreement between the GC-licensed operator and the brand owner comes to an end, for whatever reason? The first step taken by the GC-licensed operator will be to immediately cease providing facilities for gambling under that brand and change the domain on its licence to ‘inactive’. However, the GC-licensed operator is unlikely to be a party to the sponsorship agreement reached between the brand and the football club. The key question is whether the advertisement of that brand in Great Britain continues to be lawful, despite it no longer being subject to a GC licence. The answer is… it depends. The offence of advertising unlawful gambling relates to gambling that requires a GC licence to take
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