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Who needs a licence?

I’ve spent quite a lot of time recently looking at the new licensing requirements under the new Gambling Act. I’ve been reading all the stuff that has come out of the Gambling Commission, who I think have progressively clarified many of the requirements.

Despite those clarifications, though, I think there are a number of areas which remain quite confusing for people out there, at least given the conversations I’ve been having. In an effort to establish whether this is really the case, or whether it is just me being a bit dim, I have put together a couple of scenarios of company structures, and I’d like help from you guys and girls out there. If everyone understands this stuff the same way, then hoorah. But I’d be fascinated to know – preferably by posting below but if not by e-mailing me – what you think the answer is to the basic question: who, in this scenario, needs a licence?

To be clear, I have not just ‘made up’ fictitious examples. I think that the scenarios I have (first of which is below, another to come tomorrow) are actual structures that exist out there in the gambling industry.

So… who needs a licence?

There is one principal company, Company A, involved in the provision of online gaming software to licensed gaming operators.  Company A contracts directly with licensed operators. Company A also sub-licences its software to Company B and Company C.

Company B contracts with licensed operators to provide software for online gambling, on a strictly business- to- business basis.  Company B is a wholly owned subsidiary of Company A. Company B contracts at arm’s length, acting as a principal, when it enters into software licensing contracts with Company A and with licensed operators. Company B does not sub-licence any software other than software sub-licensed to it by Company A.

Company C contracts with licensed operators to provide software for online gambling. Company C is not owned by Company A, nor does it share common ownership with Company A. Company C does not sub-licence any software other than software sub-licensed to it by Company ACompany C contracts at arm’s length, acting as a principal, when it contracts with Company A and with licensed operators. It does not act as an agent on behalf of Company A.

 

 

Posted in Betting industry, Gambling, Regulation.


2 Responses

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  1. Bet guru says

    Companies A and C

  2. mark.davies@camberton.com says

    I had this reply by e-mail from Stephen Ketteley at DLA Piper, which he agreed I could post:

    Have assumed:

    · Its “gambling software”

    · The operators are or will be GB licensed

    You can’t actually provide a definitive answer until you understand more about how the development and maintenance is undertaken and where key personnel sit and, importantly, how A and B, particularly operate. They may contract with each other on arms length but that’s probably a product of tax planning – in reality they may both be organised centrally, which is why umbrella licensing may work for them. You say B acts as principal, but does this mean organisationally it operators with autonomy or is it just the contractual structuring that is distinct.

    That all said, based on the facts in your scenario, I would consider A and C need a gambling software licence. B will too, if it acting as a principal is reflecting autonomy, but it might be able to take the benefit of A’s under an umbrella licence, depending on how A and B actually interact.

    Finally, I’d need to understand the nature of the software and the supply to ascertain if any of these suppliers needed a full operating licence as well as a gambling software licence. they could also be providing facilities for gambling depending on the model.

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