Teletext loophole closed for offshore bookmakers

The High Court decision in July 1999 allowing Victor Chandler International, a Gibraltar based bookmaker, to advertise its bets in the UK on Teletext was reversed this morning in an important judgment handed down by the Court of Appeal.

Section 9(1)(b) of the Betting and Gaming Act 1981 prohibits the issue, circulation or distribution in the UK of “advertisements or other documents” relating to the making of bets with off-shore bookmakers.  The purpose of the legislation is to protect betting duties by preventing off-shore bookmakers, who are not liable to pay betting duty, from soliciting bets within the UK.

The High Court decided that “advertisements” were limited to advertisements in documentary form and that advertisements broadcast on Teletext did not involve the issue, circulation or distribution of any document.

The Court of Appeal today decided that the Act must be read in such a way as to take account of technological advances since the wording in the 1981 Act made its first appearance in the Finance Act 1952 (an “updating construction”).  VCI’s computers, Teletext’s central editing system and Teletext’s remote transmitter databases would all hold the relevant betting information and must therefore be regarded as documents.  These documents would be issued, circulated or distributed to UK television screens via Teletext.

Similar logic presumably applies to betting advertisements aimed at UK punters via the Internet.  Unless there is a successful appeal by VCI to the House of Lords, off-shore Internet bookmakers may risk prosecution if bets are offered to UK customers.

The VCI decision is important for the betting industry but also has far-reaching implications for on-line media in general.  It shows how willing the UK courts are to bring old legislation in line with new media.  The Court of Appeal noted that ‘it is now a matter of common parlance to talk of “sending a document” from one computer to another,’ even though what is really happening is that the sender is creating a document on the recipient database.  Loopholes in the wording of dusty old laws will be harder to find after this decision.

Bulletins are for general guidance only. Legal advice should be sought before taking action in relation to specific matters. Where reference is made to Court decisions facts referred to are those reported as found by the Court. Please note that past bulletins included in the Archive have not been updated by any subsequent changes in statute or case law.