UK Gambling Commission says UK based sites need a license!

[stonehedge]

At the end of the day, the bitcoin betting sites are unregulated and closed books.  The established betting companies probably don't like their ability to bypass the regulations they have to comply with.

Directbet was (probably partially) hosted on servers based in England until recently even though they claim they are based in Costa Rica.  That was asking for trouble imho.  Even Costa Rica is starting to slowly regulate gambling now.  There will always be safe havens though.

EDIT:  For clarity, the UK gambling commission makes it clear that online gaming sites hosted in the UK MUST have a full online gambling license.  Directbet had servers hosted in a datacentre in Maidenhead.

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[tonyq]

I don't think Fairlay are based in Britain, and yet they've excluded UK IP addresses.
I doubt  Cloudbet, Nitrogen or Anonibet have implemented blocks yet.
How about all the casinos and poker sites?....Have they had the same request?

[LFC_Bitcoin]

Is DirectBet really a UK site? I had no idea, us Brits just expect everything good to not be British lol.
The UK doesn't normally produce anything that's good quality especially seeing as though bitcoin gambling sites are kind of pioneering in the sense that there are only maybe 10 that are of high quality.
So Michelle @ DirectBet can you confirm if you guys are UK based?

[sherbyspark]

Is DirectBet really a UK site? I had no idea, us Brits just expect everything good to not be British lol.
The UK doesn't normally produce anything that's good quality especially seeing as though bitcoin gambling sites are kind of pioneering in the sense that there are only maybe 10 that are of high quality.
So Michelle @ DirectBet can you confirm if you guys are UK based?

A lot of people said that their servers are based in the UK, so that might be the reason. But if I was them, I would probably move out of the country so as to continue having a large customer base. Maybe they might take some time to see how much of the business is affected and then make necessary changes.

[arallmuus]

A lot of people said that their servers are based in the UK, so that might be the reason. But if I was them, I would probably move out of the country so as to continue having a large customer base. Maybe they might take some time to see how much of the business is affected and then make necessary changes.

Another reason would be that they are taking all the precautions needed as I believe they are not a regulated sportsbook which means that they are taking precautions by complyng to all the rules to make themselves "safe" from it . Basically this will be just the same case like PrimeDice doesnt accept deposits from US based players anymore despite that they are not hosted in the US.

[Wharf]

Since October 2014 its now required to obtain license not only when you have servers on UK soil but also if you have UK gamblers. Thus BitDice closed gambling for UK users about 6 month ago.

Out of interest, what would actually happen if you decided to continue to accept UK IPs on offshore servers without a UK gambling license?

[GannickusX]

Since October 2014 its now required to obtain license not only when you have servers on UK soil but also if you have UK gamblers. Thus BitDice closed gambling for UK users about 6 month ago.

Out of interest, what would actually happen if you decided to continue to accept UK IPs on offshore servers without a UK gambling license?

You can imagine that nothing good but probably depending on how big your casino is, anyways dont you need a license pretty much anywhere to run a casino?

[arallmuus]

Out of interest, what would actually happen if you decided to continue to accept UK IPs on offshore servers without a UK gambling license?

Legal actions will be taken no doubt about that and if a legal actions is taken on these unlicensed gambling sites than it will get them much more lost then their decision to stop accepting bets from the UK based players.
Basically unlicensed means illegal and everything that illegal will be seized down also that affiliates that promotes an unlicensed gambling sites are also at risk by this point if they UK gambling comission decided to take legal actions

[Wharf]

But how does the UK gambling commission actually take legal action against a hypothetical offshore site which refuses to acknowledge its existence?

Would the site not need to be in the UK for any legal action to actually be imposed?

[WhatTheGox]

I see a lot of people here saying that Bitcoin Gambling sites in the UK do not need to be licensed because "Bitcoin is not money".

The Gambling Commission takes a different view:

Dear ButterflySammy,
 
Thank you for your email.
 
You mention that HMRC doesn’t recognise Bitcoin as currency, which is fine.
 
However, when it comes to gambling, the Gambling Act 2005 defines gambling as the ability to win prizes of money, or money’s worth.
 
While bitcoin can’t be classed as money, per se, it certainly counts as money’s worth.
 
The Gambling Commission receives a number of requests from people seeking advice or approval in setting up a business. We do not provide legal advice, including advice concerning the correct interpretation of legislation. Therefore, we cannot advise you regarding the viability or legality of a business idea. It is up to you to obtain your own business or legal advice.
 
Kind regards,
 
Licensing Officer

There you have it - Bitcoin is "Money's Worth" even if it isn't "Money" therefor any site operating in or from the UK still needs a license.

If you are betting with or investing in a UK based site you need to be aware that they could be shutdown and take your money with them.

If you run or are plan on running such a site - you need to lawyer up or start filling in the paperwork. I had a look at the fees, it is not cheap, it is not pretty.

The way they are wording stuff at the moment it looks like they would have a hard time chasing up people.  This might change within a short space of time so better watch out what happens.  If you are running a small opperation personally i wouldnt panic.

[Bizmark13]

Why is a casino's license significant to you when you want to gamble with bitcoin? I don't think that bitcoin casinos take steps towards being licensed. Provably fair gambling is the way to go. As of the legality, in most regions and countries it isn't illegal to gamble with bitcoin because of the lack of laws about it. Until this changes, we're probably not going to see many bitcoin casinos being blocked.

Most don't, but there is at least one Bitcoin casino which is licensed. BitDice.me recently registered as a legally incorporated and licensed gambling operation in Costa Rica:

http://bitcointalk.org/index.php?topic=1090627

However, the benefits for end users might not be that great because if the site gets hacked or otherwise loses its funds, then the site's liabilities will shift from that of the owner to the corporation:

Any lawyer worth his salt will probably tell you to have a third party agent incorporate a casino on your behalf. Incorporating does very little for the actual user, it does help the owner establish a banking connection/trust and cash out though.

I think incorporation actually reduces the protection of investors/gamblers as the liaibility is shifted from operator to company. That being said it's a wise decision to incorporate but I can't personally see any reason for it benefiting users. Then again, I'm not a lawyer.

This means that when you incorporate a company/business in this way, in most cases, the liabilities will be shifted from the owners onto the corporation itself. So if/when the site gets hacked, or something similar causes the site to lose money then the owners would not be responsible, the corporation itself will need to bear the losses.

The owners would have this protection while still keeping the benefits of getting to keep any profits that are not reinvested into their company.

Assuming their security is strong enough to prevent people with malicious intent from stealing from the site, and assuming the owners are acting in an honest manner, then it will most likely have no visible effect on players/investors.

Out of interest, what would actually happen if you decided to continue to accept UK IPs on offshore servers without a UK gambling license?

Legal actions will be taken no doubt about that and if a legal actions is taken on these unlicensed gambling sites than it will get them much more lost then their decision to stop accepting bets from the UK based players.
Basically unlicensed means illegal and everything that illegal will be seized down also that affiliates that promotes an unlicensed gambling sites are also at risk by this point if they UK gambling comission decided to take legal actions

I found the post below from an earlier thread. The info is a bit old and deals with fiat-denominated online gambling sites but if you agree with the OP's position that it doesn't matter whether a site uses BTC or fiat, then it's probably worth reading (emphasis not mine):

Any country with legal online gambling should be fine, UK could be one place.

This is completely false.

Seems there's a lot of misinformation and basic misunderstandings here. Whenever I see this topic come up in the non-BTC gambling world, I see the same vague and incorrect suggestions over and over.

Just because online gambling is legal in a country does not mean you can host an unlicensed site there. The UK has a very strict licensing regiment with master licenses costing around £500,000 per year. Hosting unlicensed games on a server there is a quick way to get booted by your hosting company who is required to comply with UK law.

It is, however, legal to serve games from offshore into the UK, if they are legal in the country where they're hosted. The key here under UK law is "where the bet is struck". The bet is considered to be struck where the server is. Since the UK abides by international trade laws (which the US refuses to sign onto), they have to allow their citizens to strike bets in another country so long as those bets are legal under that country's law.

Now here's where it gets interesting. There is no jurisdiction on earth where it's legal to host an online gambling site without a government-issued license, except for Costa Rica. Costa Rica requires something called a "data-processing license" but it is not strictly a license (more a way of incorporating) and is not subject to gambling regulation as such. The reason for this is that, for historical reasons and thanks to a byzantine Napoleonic legal structure, Costa Rica contradicts the rest of the world (except, interestingly, the United States) and considers the bet to be struck on the user's computer, not where the servers are. So they see nothing wrong with hosting a casino there. What you're not allowed to do in Costa Rica, if you host there, is take Costa Rican players. Because then you'd be breaking their law by running an on-shore casino. Funky, right?

It is certainly illegal to host a gaming site in Ireland without an Irish gaming license (this came into force several years ago; before that Ireland had no specific legislation on it and it wasn't prosecuted).

However, the vagaries of where a bet is "struck" leave open a number of interesting loopholes for the clever site operator. For example, some countries which require a license to host gambling have various amnesties in their laws to attract business, which allow back-office operations to be run there, even downloads to be served there, so long as the bet isn't struck there. Some will consider the location of the RNG to be where the bet is struck, and others consider it to be where the player connects to the game server (assuming those are two different machines). Hosting in Costa Rica is enormously expensive, the bandwidth is terrible and the service is nonexistent. So many companies host their primary website there and serve the games elsewhere.

The ONLY way you can be sure that what you're doing in a particular country is legal is to hire a gambling attorney in that country to advise you and, if possible, put an opinion on it in writing. The safest route for a casino not willing to pay for a governmental license is to get incorporated in Costa Rica for $1000 or so and serve the games and RNG from there; and then put your non-gambling stuff like videos, graphics, sounds, etc. on faster servers wherever you want. I like http://nohostsland.com for finding servers in odd parts of the world. But DO NOT consider sticking gambling services on one of these VPS's, or on a server anywhere in the EU without a proper license from the country you're serving from.

If you have the money, some countries which offer packaged license/hosting/banking arrangements are: Malta, Curacao, the Isle of Man, Kahnawake (First Nations, Canada), Belize, Antigua; and on the top shelf, the UK, Australia, France and Italy (primarily for domestic markets).

Also be aware that the UK classifies two types of offshore casinos: Those licensed in the EU or with a country whose gaming regime is recognized by the EU (e.g. Curacao), and those not recognized (e.g. Costa Rica). While it is not illegal for a Costa Rica casino to take UK players, it is illegal in the UK for Costa Rica based casinos to advertise in print, on radio or television. Again, lots of rules, so the best advice? Lawyer up and don't take advice that could land you in jail from anonymous people on the internet.

[boopy265420]

I take it as positive that UK based online casinos will need a license to operate in UK and its territory.This will make the casinos owners more responsible and also will help to reduce fraudulent activities.These online casinos must be operated under some rules and regulations  to be more trustworthy.

[newcripto]

As long as any online casino accept bitcoin they should not have been forced to get registered with UK Gambling commission.This registration requirement should be for fiat casinos.May be some of the casinos begin to deal just with Bitcoins to skip the reg requirement.Things are going to be more complicated than ever with online business and gambling sites.

[Havelivi]

If that is necessary for any casino they need a license to run their business from UK than i think they must follow the country rules to stay in safe environment to provide the uninterrupted services, any gambling casino when if he will accept only bitcoin as payment method than that is not a problem for them and i hope it can be helpful to build trust.   

[groozh]

The UK Gambling Commission has written to online sportsbooks, bookmakers and casinos telling them to block anyone with a UK IP address.
Already, Direct Bet and the Fairlay Bitcoin betting exchange have implemented this today.
It's outrageous.

Are Direct Bet and the Fairlay Bitcoin UK based?

If not, why are they blocking UK IPs?

I don't understand why everyone seems to be taking orders from the UK Gambling Commission all of a sudden without any explanation to end users.

Any more details on this would be appreciated.

Regardless of where the bookies are based, its customers are British. That's why they're only blocking UK IPs, and bitcoin sites are only following the other foreign bookmakers (188bet, sbobet, pinnacle) in leaving Britain since the new gambling laws require them to register under the UKGamingCommission's licensing system (and pay a hefty tax). The idea behind this is to protect British consumers apparently, though anyone who knows the first thing about betting knows you cannot win using British bookmakers alone. And I'd wager (no pun intnded) that there are fifa levels of corruption going on behind the scenes

[Wharf]

The UK Gambling Commission has written to online sportsbooks, bookmakers and casinos telling them to block anyone with a UK IP address.
Already, Direct Bet and the Fairlay Bitcoin betting exchange have implemented this today.
It's outrageous.

Are Direct Bet and the Fairlay Bitcoin UK based?

If not, why are they blocking UK IPs?

I don't understand why everyone seems to be taking orders from the UK Gambling Commission all of a sudden without any explanation to end users.

Any more details on this would be appreciated.

Regardless of where the bookies are based, its customers are British. That's why they're only blocking UK IPs, and bitcoin sites are only following the other foreign bookmakers (188bet, sbobet, pinnacle) in leaving Britain since the new gambling laws require them to register under the UKGamingCommission's licensing system (and pay a hefty tax). The idea behind this is to protect British consumers apparently, though anyone who knows the first thing about betting knows you cannot win using British bookmakers alone. And I'd wager (no pun intnded) that there are fifa levels of corruption going on behind the scenes

My point is, why are any sites blocking British IPs just because the UK gambling commission said so? Especially if they are outside of the UK, what can a UK gambling commission really do about it? How do you even prove that;

1) A cryptocurrency is equivalent to money's worth
2) An IP is equivalent to a location
3) An anonymous transaction is linked to a person in the UK and a gambling related server
4) A gambling commission in the UK has control over a server outside of the UK

None of these things have been held up in court and, especially if you are outside of the UK, how do you even get summoned to a UK court of law?

Basically, if sites start blocking IPs any time any random commission decides so then there is no point to using cryptocurrency. If anyone, from any side, honestly thinks that banning UK IPs resolves a problem here then they are seriously short-sighted. It will just censor the mainstream from cryptocurrency, and other commissions from other countries will soon start telling other sites to do the same with other services.

Ultimately the only ones who will continue to use cryptocurrency will be using VPNs without the site's consent and causing more problems down the line. Frankly the fact that no one is seriously challenging this is disastrous to the survival of cryptocurrency. It has set the trend for the future. Cryptocurrency sites are happy to provide censorship of their services at the first sign of fear without even really questioning it.

There is no longer any point in using them.

[tonyq]

The UK Gambling Commission has written to online sportsbooks, bookmakers and casinos telling them to block anyone with a UK IP address.
Already, Direct Bet and the Fairlay Bitcoin betting exchange have implemented this today.
It's outrageous.

Are Direct Bet and the Fairlay Bitcoin UK based?

If not, why are they blocking UK IPs?

I don't understand why everyone seems to be taking orders from the UK Gambling Commission all of a sudden without any explanation to end users.

Any more details on this would be appreciated.

Regardless of where the bookies are based, its customers are British. That's why they're only blocking UK IPs, and bitcoin sites are only following the other foreign bookmakers (188bet, sbobet, pinnacle) in leaving Britain since the new gambling laws require them to register under the UKGamingCommission's licensing system (and pay a hefty tax). The idea behind this is to protect British consumers apparently, though anyone who knows the first thing about betting knows you cannot win using British bookmakers alone. And I'd wager (no pun intnded) that there are fifa levels of corruption going on behind the scenes

My point is, why are any sites blocking British IPs just because the UK gambling commission said so? Especially if they are outside of the UK, what can a UK gambling commission really do about it? How do you even prove that;

1) A cryptocurrency is equivalent to money's worth
2) An IP is equivalent to a location
3) An anonymous transaction is linked to a person in the UK and a gambling related server
4) A gambling commission in the UK has control over a server outside of the UK

None of these things have been held up in court and, especially if you are outside of the UK, how do you even get summoned to a UK court of law?

Basically, if sites start blocking IPs any time any random commission decides so then there is no point to using cryptocurrency. If anyone, from any side, honestly thinks that banning UK IPs resolves a problem here then they are seriously short-sighted. It will just censor the mainstream from cryptocurrency, and other commissions from other countries will soon start telling other sites to do the same with other services.

Ultimately the only ones who will continue to use cryptocurrency will be using VPNs without the site's consent and causing more problems down the line. Frankly the fact that no one is seriously challenging this is disastrous to the survival of cryptocurrency. It has set the trend for the future. Cryptocurrency sites are happy to provide censorship of their services at the first sign of fear without even really questioning it.

There is no longer any point in using them.

A great post my friend and you echo many of my thoughts on this issue.
Just why have Direct Bet and Fairlay allowed the UK Gambling commission to order them to block my IP?
And why have they done as they've been told so quickly?
I find it astonishing.
I can only think that the British government have been leaned on by the big bookmakers here in my country.
The rise of crypto currency betting obviously has them worried.

[sherbyspark]

I take it as positive that UK based online casinos will need a license to operate in UK and its territory.This will make the casinos owners more responsible and also will help to reduce fraudulent activities.These online casinos must be operated under some rules and regulations  to be more trustworthy.

Yes that is certainly true , but it will also be bad for bitcoin unless any of the licensed casinos start accepting it.
The current laws would restrict bitcoin accepting gambling sites from growing. I also feel the gambling section on the forum proves that it is what finds one of the biggest use for bitcoin(even though it wasn't intended for it) and restricting that face will have a negative impact on bitcoin to some extent.

[groozh]

The UK Gambling Commission has written to online sportsbooks, bookmakers and casinos telling them to block anyone with a UK IP address.
Already, Direct Bet and the Fairlay Bitcoin betting exchange have implemented this today.
It's outrageous.

Are Direct Bet and the Fairlay Bitcoin UK based?

If not, why are they blocking UK IPs?

I don't understand why everyone seems to be taking orders from the UK Gambling Commission all of a sudden without any explanation to end users.

Any more details on this would be appreciated.

Regardless of where the bookies are based, its customers are British. That's why they're only blocking UK IPs, and bitcoin sites are only following the other foreign bookmakers (188bet, sbobet, pinnacle) in leaving Britain since the new gambling laws require them to register under the UKGamingCommission's licensing system (and pay a hefty tax). The idea behind this is to protect British consumers apparently, though anyone who knows the first thing about betting knows you cannot win using British bookmakers alone. And I'd wager (no pun intnded) that there are fifa levels of corruption going on behind the scenes

My point is, why are any sites blocking British IPs just because the UK gambling commission said so? Especially if they are outside of the UK, what can a UK gambling commission really do about it? How do you even prove that;

1) A cryptocurrency is equivalent to money's worth
2) An IP is equivalent to a location
3) An anonymous transaction is linked to a person in the UK and a gambling related server
4) A gambling commission in the UK has control over a server outside of the UK

None of these things have been held up in court and, especially if you are outside of the UK, how do you even get summoned to a UK court of law?

Basically, if sites start blocking IPs any time any random commission decides so then there is no point to using cryptocurrency. If anyone, from any side, honestly thinks that banning UK IPs resolves a problem here then they are seriously short-sighted. It will just censor the mainstream from cryptocurrency, and other commissions from other countries will soon start telling other sites to do the same with other services.

Ultimately the only ones who will continue to use cryptocurrency will be using VPNs without the site's consent and causing more problems down the line. Frankly the fact that no one is seriously challenging this is disastrous to the survival of cryptocurrency. It has set the trend for the future. Cryptocurrency sites are happy to provide censorship of their services at the first sign of fear without even really questioning it.

There is no longer any point in using them.

You're absolutely right. The thing is, although there will be very little repercussion for directbetif they continued serving Brit IPs, I think they see it as not worth the hassle. The UKGC perhaps has them a little bit scared and they're protecting their business. Their lack of comment on the issue just confirms this. It's a slippery slope once bitcoin, a decentralized currency, starts to be ruled over like this

[tonyq]

It's a slippery slope once bitcoin, a decentralized currency, starts to be ruled over like this

Indeed it is!

For what it's worth, allegedly, you can use the Tor browser from the UK and get around the problem.