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Interactive
gaming and the law - Part 3: Rules of the Game
click
here to read part 1
click
here to read part 2
April 2002
The previous
articles in this series touched on some of the main points to bear
in mind when acquiring rights to iDTV games services and the legality
of those games services themselves. In this issue, we will look
at the approach of the regulatory authorities that claim jurisdiction
over iDTV games services provided in the UK
:The style of
service will determine the regulatory bodies that are relevant when
providing and promoting a games service. Games may be graphics-based
only and offered via a walled-garden as a purely 'interactive' service
or represent enhancements to existing television programmes ('ETV').
A game's mechanics may involve the making of bets under the terms
of a bookmaker's licence, represent a prize competition or what
may appear to be a hybrid of both. Increasingly, service providers
are also wishing to offer services which fall within the definition
of 'gaming' (for a more detailed description of gaming, see Part
Two). So, who are the main regulators of games services
like these?
Independent
Television Commission ('ITC')
The ITC regulates (broadly) all commercial television services that
comprise moving pictures and that are provided in the UK. The jurisdiction
of the ITC includes linear television, ETV and interactive 'walled-garden'
applications. However the ITC has declared that it does not intend
to regulate 'Internet on TV' applications.
All broadcasters of these regulated services will need to operate
under the terms of an ITC licence; the games services offered by
those licensees will need to comply with the requirements of the
various ITC codes of practice - the principal code being the ITC
Programme Code. What impact does the 'Code' have on games services?
Competitions - The Code sets out certain requirements in
connection with the making available of competitions via television.
Competitions must take place during editorial programme time and
not stand as programmes in their own right (rule 8.6).
If premium rate phone lines are used to enter the competition, the
Code requires compliance with the requirements of ICSTIS (see below)
and requires the broadcaster to retain responsibility for the service,
to use it to convey certain information only and clearly indicate
the total price of the call before the call is made (rule 8.2).
Any prizes offered must be described in way that is 'non-promotional'
and only referred to in a limited way.
Betting - The making of a bet will constitute a 'commercial
service' for the purposes of the Code, just like any other product
made available for sale. Rule 8 of the Code makes it clear that
commercial services may only be promoted in dedicated advertising
time and not within programmes; this would prohibit the promotion
of betting opportunities as part of any editorial linear programme
service content. The ITC also prohibits the advertising of betting
services and betting tips other than advertisements offered as part
of an interactive or teletext service (rule 18 of the ITC's Code
of Advertising Standards and Practice).
The Code will apply to an ETV service in much the same way as it
does to a linear service. Service providers should bear in mind
that there is a fine line between including material for the purpose
of 'operating' a betting service and including material for the
'advertising' of that service.
Information, therefore, that is over-laid on a television picture
or displayed in a bar beneath the picture should be an aid to operation
only and not an advertisement. The ITC considers that the user's
choice to 'interact' with a programme is not to be taken as a decision
to view advertisements for commercial services.
As such, a viewer should be obliged to perform two 'clicks' before
having the opportunity to access commercial content, which in this
case would mean the opportunity to buy a chance to compete or place
a bet.
In as much as a games service is part of an interactive walled-garden
service containing text and still pictures only, the ITC has adopted
a 'light touch' and does not apply the Code. A wider range of competitions
and betting services may then be offered as part of a walled-garden
service.
However, these will be subject to the general legal limits on advertising
of betting services, one of which is that advertisements must be
in a 'material form', such as brick or paper but which does not
include television.
The recent 'Budd Committee Report' (see below) sets out proposals
for reform of the law that restricts gambling in the UK. The ITC
has also moved in its attitude towards betting by proposing that
existing restrictions be relaxed to allow the advertising of betting
and gaming services to the extent they are allowed by law. Provided
that the law relating to advertising of betting services is relaxed
to reflect the Budd Report, before long it may be that advertisements
for betting services will be possible on all forms of television.
ICSTIS
Games services revenue is often accrued as a result of players accessing
services via premium rate telephone lines. All operators of premium
rate phone lines are obliged to comply with the requirements of
ICSTIS - the self-regulating body established to regulate premium
rate services.
ICSTIS has issued a code of practice and guidelines to assist that
code's interpretation (available from the ICSTIS website). The Code
of Practice provides that competitions that are likely to be attractive
to those under 16 should not offer any cash prizes.
It sets out the necessary requirements for a competition to be considered
'fair' and makes clear certain information that must be made available
to callers before they call. Particular consideration must be given
to competitions aimed at children. The ICSTIS Guidelines state that
ICSTIS will refer to the police any competition service that it
has been advised is illegal and which it considers would cause potentially
serious harm.
The Advertising
Standards Authority
The Code of Advertising and Sales Promotion is the code issued by
the advertising industry's self-regulatory body - the Advertising
Standards Authority (ASA). The ASA's code applies, broadly, to advertisements
in non-broadcast media and so will be relevant to the promotion
on any gaming services in listing magazines and newspapers for example,
as well as on banner bars on the Internet.
Under the ASA's code, conditions of entry should inform participants
of all relevant restrictions, criteria and mechanics of the competition
before the participant commences the game. The conditions and closing
date should not be liable to change.
The competition should be judged fairly and impartially, with winners
being notified and receiving their prizes promptly. Details of the
winners must be capable of verification. Rule 56 of the code sets
out restrictions on the way that betting services may be advertised
and, in particular, stresses the importance of advertisements not
being directed to those under 18.
The Gaming
Board
The Gaming Board is the body with the responsibility of enforcing
the terms of gaming licenses issued under the Gaming Act 1968. Gaming
is defined as: 'any game of chance for winnings in money or money's
worth whether the player is at risk of losing money or not,' (s52
of the 1968 Act).
As discussed in Part Two,
the 1968 Act prohibits gaming services from being offered to the
public unless offered under the terms of a gaming licence issued
by the Gaming Board. The Gaming Board would not licence an iDTV
gaming service because under the terms of the 1968 Act, where gaming
takes place in licensed premises, the only people who may take part
in that gaming are those that are present on the premises.
The 1968 Act is drafted in such a way that gaming services offered
to UK iDTV users are likely to be illegal, even when the host server
is based overseas. This position will change, however, if recently
proposed reforms of UK betting and gaming legislation become a reality
(see below).
Gambling
Review
In July 2002, the long-awaited Budd Committee Report was presented
to the Department of Culture, Media and Sport (DCMS). The Budd Committee
was asked to review the gambling industry in broad terms, its regulation
and the ways in which it might change over the years ahead given,
among other things, technological developments and the changing
leisure industry.
The resulting report addressed in detail the issue of operating
gambling services via electronic media including iDTV. If the proposals
in the Budd Report become law, it would open the gambling market
to a mass of opportunities and could free gambling to become the
'killer application' that iDTV service providers have been waiting
for.
Broadly, the Budd Report recommends that the legislation that governs
gambling in the UK should be simplified and should extend choice
both to providers of services and to punters. The report recommends
that 'on-line gambling' (including iDTV gambling) is specifically
recognised as a distinct category of gambling, and that as far as
possible, on-line services are treated in the same way as UK casinos.
In connection with this, the principal recommendations of the committee
were that:
1. operators should be permitted to establish operations
in the UK provided they are licensed by the (newly established)
Gambling Commission
2. operators should be permitted to advertise in the UK but
only if they are properly licensed
3. on-line (including iTV) gaming software systems to be
available for testing and inspection by the Gambling Commission
and, although not every new game should be subject to approval of
the Gambling Commission, the Gambling Commission should set the
parameters for the development of on-line games
4. licensed operators will be required to pass a 'fit and
proper' test
5. the Gambling Commission should have the power to take
action in relation to premises not licensed as gambling premises
in which terminals providing access for on-line gaming are located.
Further, the report recognises that there will be strong incentives
to apply for an on-line licence, particularly if the UK is the only
EU country to offer such a registration process.
At the time of writing, the DCMS has confirmed that it has completed
its consideration of the public submissions in response to the Budd
Report. Following consideration by Ministers, the government should
announce a response to the report in the next couple of months.
Reforming legislation has a 'long-stop' date of 2004. However, given
the possibilities offered by broadband technology and the potential
revenues to the UK Exchequer, reform of the law may not be so distant.
In this environment of evolving regulation, it will be those games
providers that both move fast and have an up-to-date appreciation
of the law who will benefit most from the opportunities that will
become available.
For more information
visit: www.wiggin.co.uk
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