The gambling community was rocked last month with the latest news that one of the United Kingdom’s remote gambling operators, Lottery England Limited, following concerns of questionable operational practices that may run counter to the UK’s gambling code, the Gambling Act of 2005.
Effective immediately, the United Kingdom Gambling Commission (UKGC) has suspended the external lottery manager license of Lottery England Limited which was once considered one of the most respected UK operators. While not the only organisation under the Commission’s scrutiny in the last two years, Lottery England Limited faces possible licence revocation, pending the outcome of the review.
Prior to the suspension, Lottery England Limited had held a non-remote external lottery manager licence since December 2014, which permitted it to manage lotteries and provide lottery services for charities and local authorities.
What is an ELM licence?
A remote external lottery manager operating licence is a licence that allows an entity to manage a lottery on behalf of a society or local authority. These remote operating licences are required by law for each type of gambling activity that a business provides. Issued by the UKGC, businesses must obtain an ELM licence if they administer facilities for gambling to consumers in Great Britain online (or through any other means of remote communication) or have any remote gambling operation based in Great Britain.
Stepping-up regulatory review
This is not the first time the UKGC has taken action against a business’s licence to operate. In April 2021, the UKGC also suspended the regulatory licence of Nektan (Gibraltar), the British-facing B2C (business-to-consumer) arm of Nektan, which was subsequently sold by administrators in 2020 as a review into its licence was conducted.
Additionally, the Gambling Commission has suspended several licences in 2020, including those of iGaming operator Stakers, International Multi-Media Entertainments, Capen, which runs The Little Lottery, The Sports Lotto and Zaffo, and lottery betting operator Multi-Media Entertainment. It also revoked the licence of the London casino, the Park Lane Club, which subsequently appealed the decision.
Reviewing the Act
The UKGC stated that it has instigated a review under s116 of the Gambling Act 2005 into Lottery England Limited following “concerns that activities may have been carried out contrary to the Act, not in accordance with conditions of their licence”. Section 116 states that the Commission can review, suspend, or revoke any issued licence for an organisation that it believes to be in breach of regulatory law.
Specific activities by Lottery England Limited are not available but it seems that some of their business practices were worrying enough to draw the Commission’s attention. As a result, the UKGC noted that the business “may be unsuitable to carry on the licensed activities”. Pending the outcome of the review, Lottery England Limited may actually be in breach of required regulations and may lose their licence to operate.
Despite the seriousness of this regulatory investigation, the UKGC has not been forthcoming about the specifics surrounding its concerns or suspicious, merely stating that they have them.
3 year corporate strategy
This intense investigation is all part of the UKGC’s three-year corporate strategy and business plan to continue to help protect players from injury or damages caused by unscrupulous gambling operations.
The new strategy will be delivered through five priority areas; protecting children and vulnerable people from being harmed by gambling, a fairer market and more informed consumers, keeping crime out of gambling, optimising returns to good causes from the National Lottery, and improving gambling regulation.
Commission Chair Bill Moyes said, “Over the next three years, we will see the gambling industry change further, especially as the pace of innovation accelerates. As the regulator, we must keep pace with that change, be ready to adapt, and ensure that the millions of people who gamble in Great Britain can do so safely.”
Pending the outcome of the Commission’s review, Lottery England Limited will then be given the opportunity to perform integrations and system improvements, addressing the issues reviewed by the UK Gambling Commission. It will be interesting to see how the review plays out, whether or not it turns out in Lottery England Limited’s favour.
Staying in line
As gambling operations around the world continue to become more regulated, operators must stay up-to-date on current local, regional, and national gambling laws. These regulations are designed to protect plays and consumers, keeping watch on unscrupulous activities by the various entities under their supervision.
Even if gambling operators are abiding by the laws, many things can quickly change, putting their licences to operate in jeopardy and staining their reputations. Even if the review turns out to be nothing and the UKGC reinstates Lottery England Limited’s ELM licence, the bad press may be enough to hurt the company’s position in the industry. Charitable lotteries, especially, need to be on the lookout for regulatory changes in order to keep their licences in good standing at all times.
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