5 Jul 2013

Feature: Jason Chess, Partner at British Media Law firm Wiggin LLP speaks on gambling regulation, cheating in sport and road ahead for the Indian gaming industry

Jason Chess

In this exclusive interview, we present the Gambling and Betting Law Head of top British Media Law firm Wiggin LLP; Mr. Jason Chess. Mr. Chess is an expert on electronic betting and gaming and has advised several top International companies in their gaming projects. In this interview, he discusses the gambling law regulations in UK, India’s potential in the gaming industry, match-fixing and cheating in sport and much more.

Q. Mr. Chess, it is a pleasure to present your interview to our readers. Could you briefly tell us what got you interested in gaming law and why did you chose this practice area?

Jason Chess (JC): Jay, back in 2004 the big UK football pools company Littlewoods asked me to advise them on a tie-up between some of their businesses and ITV, the UKs main commercial broadcaster. We worked on putting electronic betting products into the satellite set-top-box receivers of the UKs direct-to-home satellite audience and the viewers were able to access and play the products by clicking onto the red button interactive icon on the ITV channels. From that time onwards I developed expertise in electronic betting and gaming and have been practising in that area ever since.

Q. India has largely followed the British model of prohibiting gambling based on the (except betting on horse-racing) Victorian notion of morality and the archaic British-era Public Gambling Act, 1867 has been adopted by most states or legislation has been drawn on similar lines. However, UK itself has seen changes in its gaming laws in the past few decades and comprehensive changes after the passage of the Gambling Act of 2005 liberalising the sector. Can you take us through the progress of the gambling industry in UK in the twentieth century and the current legal and regulatory environment?

JC: Jay that is an interesting question with wide social and moral dimensions. The historic gambling legislation in both countries has been until recently reflective of a far deeper issue that of the fundamental morality of gambling. Historic legislation was always restraining and controlling, taking the view that gambling was a moral evil and that it should be suppressed as far as possible, and to the extent that it could not be suppressed and people were going to do it anyway, it would be controlled and confined to very strictly-regulated premises where the authorities could exert what control they felt appropriate, for example racecourses and casinos.

In more recent times, attitudes have become more liberal. The British 1968 Gaming Act provided that persons could apply for casino licences based on them demonstrating that there was a public demand and the current 2005 Gambling Act goes a step further and offers gambling licences to any person who wishes to run a gambling business regardless of demand. Official British Government policy behind the 2005 Act was that gambling was from henceforth to be treated as a leisure pastime like any other, with no adverse moral connotation, albeit subject to much heavier regulation than other sports or pastimes. Other European jurisdictions have similarly liberalised with a variety of more or less permissive licensing regimes allowing gambling businesses to obtain particularly electronic/remote gambling licences, pay duty, report to the regulators and operate in a well-regulated and transparent manner.

Q. What are your thoughts on the Indian gaming industry and its potential?

JC: India is a huge and fascinating market and like the USA will surely be one of the dominant global markets. There is enormous potential for sports bets operators particularly and for remote gambling generally as the takeup of smartphones and connectivity increases. The Indian sports fan will enjoy a bet on his favourite cricketers just as much as his English and Australian cousin.

Q. In Indian except two Indian tourist states of Sikkim and Goa, gambling is mostly prohibited. Though there is ambiguity on online gambling and initiatives involving online gambling may be illegal and it is assumed to be prohibited by the federal Information Technology Act, 2000 and allied rules. What do you think of the regulatory framework on gambling in India? Do you see opportunities in the Indian gaming industry? What would be your suggestions and comments on the model for regulating gambling in India?

JC: It isnt for me to develop a local framework for the Indian market because of course this needs to be worked out by Indian politicians and lawyers bearing in mind Indian needs and the traditional expectations and morality of Indian society. Here in the UK however the three principles or objectives of the current gambling legislation are to protect the young and the vulnerable (i.e. problem or addict gamblers) from harm, to ensure that gambling is fair and open, and to prevent any association of gambling with crime.

As someone close to the gambling industry if you asked me what I would like to see in India I would of course like to see a country-wide amalgamated market with federal enabling legislation offering responsible, certified and approved and socially-aware businesses the chance to obtain gambling licences, pay duty, and make a contribution to the prevention and treatment of problem gambling.

An India-wide electronic gambling market, with high-quality, fair and verified products, paying duty to the state and ensuring that problem gamblers are identified and excluded, would be the same sort of system that places like the US and Germany seem to be struggling towards and which jurisdictions like Italy, Denmark, Spain, Great Britain, France and the Netherlands already have in place. The emergence of the internet, smartphones and international connectivity vastly increases the difficulties for a Government that wishes to prevent gambling and a lot of Governments have taken the view that you cant beat the internet and so why not regulate and tax these businesses instead? All gambling businesses or at least the reputable ones are keen to operate legitimately, obtain the correct licences and pay the correct duty because of course that gives them business certainty, the certainty they need to invest in good systems and platforms and digital marketing and promotion.

Q. Do you think tribal gaming in India can be developed as a concept similar to native American gaming in USA? Tribal areas in India also enjoy constitutional protection; so do you think opening casinos will enable the development of these areas?

JC: I am not an expert on this and my only comment would be that these markets may lack the volume and liquidity to be attractive. The population in India may be greater than that of individual native US tribes and such segmented Indian markets may be capable of development for that reason in a way that the US markets are not, but all gambling companies like to see the market as large as possible and, for example in relation to poker, they like to be able to pool players from different countries/jurisdictions and have them all playing together for the maximum prizes and so on.

One only has to look at Germany for an example of a country where, in the absence of overarching federal gambling laws, individual states have sought to licence or prohibit gaming and the situation is something of a disaster. The US is looking like a similar case. Everyone is very excited at the moment about the opening of the US market but all we have so far is a small number of states opening up to electronic poker, primarily, and the integration of these jurisdictions may take some time, including native jurisdictions. A Nevada licence is in reality useless because of course Nevada is mostly desert and there are very few people there its all based on future hopes of what might happen. I wouldnt think that that would be the best model even for a large and varied country like India. So the working up from local units model of regulation isnt perfect and I suppose the lesson with gambling legislation is to try to do it on as universal a scale as possible, not on a micro-level.

Q. The recent allegations of spot-fixing in the Indian Premier League (IPL) and other International cricket matches as well as the larger issue of cheating in sport has tarred the integrity of many sports and jolted fans. However, the UK Gambling Act has brought transparency in betting and many say curbed the chances of cheating in sport. Do you agree that regulated and transparent betting and an independent regulatory body will curb instances of fixing and ensure swift punishment for the guilty? What would be your advice on the approach by Indian lawmakers as India is considered to be the hub of fixing and illegal betting?

JC: I am a cricket fanatic and I have no greater pleasure than watching the incredible cricketing talent that comes out of India, along with millions of others, but there does seem to be an issue with betting and sport in some areas and this is a hot topic throughout the world and not just in India at the moment.

Cheating in any shape or form should of course be a serious offence because it is a slap in the face for the overwhelming majority of honest fans who may enjoy a bet as part of their enjoyment of their sport. Sportsbook operators should be under strict regulatory obligations to identify and report immediately suspicious betting patterns and there should be software and system in place to do this. Any co-operation or collusion from a bookmaker with irregular betting patterns should result in that person losing their licence and facing prosecution.

Q. Bringing a legislation liberalising gambling requires political will and such a move is difficult in the near future considering the fragmented political situation and protests from religious groups. Has UK ever faced political and religious opposition to casinos or betting in the past few years?

JC: Yes. Even in the current secular and liberal UK society there are some groups who maintain the historical mistrust of gambling on moral grounds, particularly groups influenced by the old Evangelical Protestant traditions like the Salvation Army and the Methodist Church. Some sections of press also take a negative view and report in detail on the issues faced by the very small minority of people who suffer addiction problems.

However in the main, British society is fairly liberal and tolerant of peoples choice of pastimes and gambling is not a particularly prominent matter of concern in the national life. Of more concern are economic matters, welfare dependence, the neglect of the elderly and Britains place in the world. We have plenty to worry about before getting to gambling!

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