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Topic: UK Gambling Commission says UK based sites need a license! - page 6. (Read 11980 times)

legendary
Activity: 812
Merit: 1000
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:

Quote
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.
newbie
Activity: 13
Merit: 0
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?
legendary
Activity: 2562
Merit: 1414
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
hero member
Activity: 490
Merit: 500
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?
newbie
Activity: 13
Merit: 0
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?
legendary
Activity: 2562
Merit: 1414
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.
hero member
Activity: 910
Merit: 1000
Is DirectBet really a UK site? I had no idea, us Brits just expect everything good to not be British Grin 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.
legendary
Activity: 3556
Merit: 9709
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Is DirectBet really a UK site? I had no idea, us Brits just expect everything good to not be British Grin 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?
legendary
Activity: 879
Merit: 1001
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?

legendary
Activity: 1722
Merit: 1002
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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.
full member
Activity: 189
Merit: 100
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:

Quote
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.

Bitcoin online gambling is also under the same regulations as fiat online gambling in most european industrial countries, not just the UK.
And as you mentioned it almost always comes down to the fact that bitcoin is money's worth and therefore it makes no difference.
In fact you could gamble with anything that could be sold for money and you would need a license.

While I think that does make sense, I feel like there should be some sort of global online gambling commision which makes online gambling laws for all countries that are part of it.
This would make the gambling law a lot better for casino owners and law enforcers since at the moment pretty much any type of online gambling is a grey zone unless you literally buy a license in every country in the world.
Such a global online gambling commision could also set a fixed tax agreed on by its members, collect it and distribute it fairly to the countries.(depending on how much profit has been made from people from which country)

I hope this will happen some day but I sadly don't see it coming anytime soon since gambling seems to be a taboo to governments and media.(besides the 50% house edge state lottery which is there to "protect" people)
Gambling is a HUGE market, a LOT of people gamble, it's a human urge so in the long run the governments must agree on some kind of law since online gambling is a global market.



It did have some affect on bitcoin sites. Directbet and Fairlay seems to have blocked UK based IP's already .

blocking IP's of some site is like fighting with wind mills. in world of dynamis DNS, cheap VPS and anonymous domain, almost nothing can stop you..
While this is true it will still certainly make some people from the UK not play due to them either not wanting to go through the hassle of getting a foreign IP or them simply being scared of law enforcement.
It's kind of like locking your bike. While most people will not steal it because it's too much hassle due to it being locked, if somebody really wants to steal it they can still do it very easily.
Making something harder to do will stop a lot of people from doing it even if it wouldn't be hard to do it anyways.
legendary
Activity: 1036
Merit: 1001
/dev/null
It did have some affect on bitcoin sites. Directbet and Fairlay seems to have blocked UK based IP's already .

blocking IP's of some site is like fighting with wind mills. in world of dynamis DNS, cheap VPS and anonymous domain, almost nothing can stop you..
legendary
Activity: 1176
Merit: 1000
But Uk request a license to uk based site, only for tax questions?
Because in italy, first you can bet to all site in the world, now you can bet only to italian site with government license and have a odds more low of 20% to other
hero member
Activity: 910
Merit: 1000
ahh, internet has no borders..why should somebody host his site in UK, if they had such regulations? for bitcoin sites, I don't see any issue at all here..fortunately.)
It did have some affect on bitcoin sites. Directbet and Fairlay seems to have blocked UK based IP's already .
legendary
Activity: 1036
Merit: 1001
/dev/null
ahh, internet has no borders..why should somebody host his site in UK, if they had such regulations? for bitcoin sites, I don't see any issue at all here..fortunately.)
hero member
Activity: 910
Merit: 1000
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.

couldnt users do just like they do on primedice and use a vpn though? seems like theres a loophole for almost everything these days

Yes they can login using VPN and TOR . I couldn't find any news article relating to the info however, but does seem UK users have been locked out. 
But I also see Pokerstars starting to open a sportsbook in the UK just recently: http://uk.pokernews.com/news/2015/05/pokerstars-sports-betting-offering-goes-live-in-the-uk-17854.htm

Seems they will be setback as well.
newbie
Activity: 13
Merit: 0
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.
member
Activity: 81
Merit: 1002
It was only the wind.
This is good information, thank you for sharing it. Hopefully some sites will get a license and comply with the laws to avoid legal problems.

Alternatively host the gambling site offshore.  Wink

Careful - UK based developers may still need a developer license and operators may still need a personal/organisational license if they reside within the UK.

If you ever try to cash out your share of your sites takings and the bank reports it upstream or if you were to record it faithfully on your tax return, if you were discovered to be operating without proper licensing even through an offshore website, you could still face the same fines and jail time.

Rather than take legal advice from people on a forum - which let's be honest is why we ended up with so many sites before one of them even consulted the law, get a lawyer rather than thinking you or someone else with no legal experience whatsoever have found a loophole.

This is why you don't cash out your share of the BTC, you don't send it to a bank, and you leave it off your tax return. You SPEND it. You can buy cash right off of BitMit, or buy something which holds its value well for a short time and sell it.

Yeah, you don't need to cash them out into your bank account, then you don't need to pay tax return. That is the point of doing it offshore. I know a lot of people who work abroad. And they will put those money in their offshore account which don't pay tax.

Also if you really need money, just go to localbitcoins.com exchange only what you need and spend it.

Nope. Problem with that approach: Many banks with strong bank secrecy laws won't do business with US citizens. You have a US passport, you're fucked. That's why you spend it.
legendary
Activity: 3766
Merit: 4554
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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.

couldnt users do just like they do on primedice and use a vpn though? seems like theres a loophole for almost everything these days
legendary
Activity: 879
Merit: 1001
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.
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