As an industry, the betting and gaming sector has grown to become a global phenomenon. This is driven by many different factors, as operators and regulators react to the emergence of disruptive technologies, new markets and new ways of doing business. The gambling and leisure market has created a unique range of opportunities and challenges, with companies experiencing exceptional international growth whilst having to navigate a complex series of laws and tax regimes across multiple jurisdictions.
Britain has the world's most advanced market for online gambling, and many of the world's largest online gambling companies are listed on the London Stock Exchange. There has been significant change in the UK market recently, with licensing and taxation now being dealt with on a point of consumption basis. Public markets have also seen increased levels of M&A activity, with consolidation being driven in part by the burden of regulatory compliance, increased taxation and margin erosion.
Mishcon de Reya's Betting and Gaming team has been at the forefront of developments in the internet gambling arena since 2000. Our dedicated team has first-rate industry experience with specialist teams focused on international regulatory developments, technology, insurance and sports and leisure. Clients include multi-national businesses, owner-managed enterprises, technology start-ups, through to investors and financial institutions. We provide advice across the full range of product offerings, including sports betting, poker, casinos and slots, social gaming, bingo, skill games, lotteries and prize draws.
We advise clients in the sector on all their legal and commercial needs at whatever stage of their business lifecycle, whether a start-up, through to fundraisings, acquisitions, restructurings, flotations and sales. We understand the commercial and business issues faced by our clients, and focus on getting deals done. Our industry knowledge and experience allows us to maximise our clients opportunities through the provision of expert and incisive legal advice, whilst also protecting against possible regulatory and commercial pitfalls.
We advise operators in the gambling sector, both online and land-based and are able to provide a 'one-stop-shop' for most services that the betting and gaming industry requires. Our team is large and includes expert Intellectual Property lawyers who can advise on trade mark and patent protection and enforcement strategies and insurance coverage lawyers who can advise on all betting and gaming risk related issues.
We have expertise in international corporate restructuring and tax planning for operators and their founders, and have one of the most experienced Regulatory/Corporate/Tax teams in the UK in this area.
Our services in the betting and gaming sector include:
Regulatory and Compliance
We advise operators and service providers on compliance with the Gambling Act 2005 and associated regulations, including gambling licence applications.
Given the international nature of the online gambling sector, we are also extremely experienced in assisting clients to navigate foreign licensing regimes. This includes emerging regimes in Eastern Europe and South America as well as the more mature jurisdictions in Europe. We have assisted operators and investors in many of the key online gambling jurisdictions. Examples of our experience include:
- Advising HM Government of Gibraltar as an interested party in relation to the 2 judicial review challenges brought by the GBGA against the UK's new licensing regime and point of consumption tax regime.
- Providing regulatory and licensing advice to clients such as Continent 8 Technologies plc, PKR.com and 188bet.com.
- Advising an international bank on specialised terms of business for use in the gambling sector.
- Advising a reverse auction website on matters relating to skill gaming and the structuring of its products.
- Advising operators seeking foreign licences in new territories, such as Nevada and New Jersey.
- Advising offshore operators on the impact of the Gambling Act on their businesses.
Technology and Licensing
We have extensive knowledge of the technology issues facing clients in this fast-moving sector. This includes advising on white label arrangements, complex IT projects, outsourcing arrangements and cloud computing issues. We frequently advise on the launch of new and innovative products. Examples of our experience include:
- Advising a major operator on the licensing-in of a number of games.
- Acting for a new operator in relation to the launch of its bespoke online peer-to-peer betting system.
- Advising operators in relation to their arrangements with the major suppliers to the betting and gaming sector.
- Advising on the structuring of online affiliate arrangements and related terms and conditions.
- Advising on the promotion of gambling through social media.
- Advising gambling operators on the licensing-in of data.
- Advising an operator on its white labelling arrangements with a major provider of sportsbook facilities.
Intellectual Property/Brand Management
We advise clients on the full range of international IP protection and exploitation strategies. We have a dedicated team well versed in dealing with trade mark, design and patent protection and enforcement in all core jurisdictions, and can assist clients with the maintenance and management of their existing portfolios of IPR. We have particular experience in advising on issues relating to use of sports data by betting and gaming companies including database right. Examples of our experience include:
- Providing advice on branding strategies including trade mark registration and domain name protection issues.
- Advising The Intertain Group Limited in relation to the portfolio of international trade marks that it acquired from Gamesys.
- Advising Bet365 on a range of issues concerned with the protection, enforcement and exploitation of its various rights.
Data Protection and Security
We understand the importance of customer data to online betting and gaming businesses, and we frequently advise on data protection strategies. We also advise on data security issues. Examples of our experience include:
- Advising on privacy policies, cookie policies and data protection regulatory compliance.
- Working with companies across a number of sectors on data protection strategies.
- Advising on data security issues and dealing with data security breaches.
Many of the sponsorship arrangements in the betting and gaming sector are with sports companies and personalities. Our Sports Law group has considerable experience of advising on these agreements, both for the sports sector and the gambling sector. Examples of our experience include:
- Acting for a leading Premier League football club on the full range of its sponsorship agreements including in relation to betting and gaming partnerships.
- Advising on sponsorship arrangements relating to Euro 2012, World Cup 2014 and The Confederations Cup 2013, football club sponsorship and PGA Events.
- Advising a Premier League football club on its licensing and other contractual arrangements relating to the launch of a fan football game on Facebook, and the use of its IP and images in other games.
Other Commercial Agreements
We advise betting and gaming businesses on all their commercial issues. This includes advising on standard terms and conditions, game rules, agreements with payment service providers, as well as bespoke arrangements tailored to a client's individual business. Examples of our experience include:
- Advising financial institutions and retailers on their use of payment systems, including advice relating to the allocation of risk for fraudulent transactions and charge-backs.
- Advising on joint ventures relating to the use of video lottery terminals in Italy.
- Drafting user terms and conditions for operators.
- Advising clients on their affiliate marketing programs.
- Advising clients on their partnering and joint venture agreements.
Our team has advised on some of the largest transactions in the sector, and has over 13 years' experience advising on M&A transactions in the online gambling sector. We can support clients throughout the full range of the corporate finance lifecycle, including fundraisings, joint ventures and other strategic partnering agreements and exits, whether a sale or an IPO. We also carry-out pre-finance health-checks for companies seeking funding. Examples of our experience include:
- Advising The Intertain Group Limited on its acquisition of the Jackpotjoy brands for an initial payment of £425.8 million and its partnership with Gamesys Limited.
- Advising minority shareholders of Stride Gaming plc on the admission to trading of its shares on the AIM market of the London Stock Exchange.
- Advising two of the founders of PartyGaming Plc on its £4.64b IPO and the subsequent merger with bwin Interactive Entertainment AG.
- Advising the owners of sportsbook.com on its $180m sale to Sportingbet Plc.
- Advising Antigua-based ISC Entertainment Inc. on the sale of its marketing operations for sportsbook.com and other sites to Sportingbet Plc.
- Advising the founder shareholders of Excapsa on its AIM flotation.
An understanding of the sector, and a commercial appreciation of the importance of assets such as domain names, player data, goodwill and operating licences, are key to resolving disputes. Our group has one of the largest dedicated teams in the UK experienced in dealing with contractual and other disputes in the sector with involving gambling operators, their customers or their employees (eg breach of restrictive covenants, or database theft).
This team also has experience of dealing with disputes with regulators. We acted on the first case ever heard by the UK Gambling Commission's Appeal Tribunal. Examples of our experience include:
- Acting for an operator in relation to litigation arising out of their operation of 60 adult gaming centres.
- Acting for individual directors and companies in relation to licence review proceedings brought by the UK Gambling Commission, both before the Commission and the Appeal Tribunal.
- Acting for an online casino operator and brand owner in disputes relating to assets sold to another operator.
- Complex cross-border disputes between joint venture parties involved in an internet gaming marketing business.
- Advising on asset protection strategies designed to prevent problems arising in the first place.
Where an industry matures and many of the biggest operators scale up or merge, competition law issues (such as restrictive agreements and abuses of dominant position) may well impact on the business deals. On the commercial front, there may be disputes with sports governing bodies regarding media distribution rights. On corporate transactions, it may be that merger approval is required at a UK or EU level in order for a merger to proceed. Our Competition Law Group has sector-specific experience on key issues affecting large scale mergers and acquisitions. Examples of our experience include:
- Advising online and traditional high street betting and gaming businesses on UK and EU merger control.
- Advising on the interplay between intellectual property rights and competition law, particularly important in terms of pricing strategy and the allocation of often exclusive rights (including advising the owner of key racing data on the application of competition law to its pricing strategy).
- Advising businesses in relation to whether state aid has been granted to themselves or competitors, and commenting on responses to the European Commission's inquiry into illegal state aid to football clubs.
- Advising a racing regulator on its guidelines for the approval of owners of operators.
Tax and structuring
The tax world is changing. Substance, transparency and paying tax on transactions and pricing at the place of consumption are the key features of the OECD's global change programme. Our Tax team work to create sustainable business structures, whether through vertical dis-integration or restructuring, both within and outside an M&A context. We also have a dedicated indirect taxes group who have experience in advising on VAT, POC tax, diverted profits tax and other European discrimination issues. Examples of our experience include:
- Advising poker and other software developers on their exit or redomiciling options in Europe, Canada, the Caribbean and UK.
- Advising clients on tax efficient structures in the light of merger, acquisition or exit plans.
- Advising on EU/non EU cost sharing structures.
- Advising on effective cross border profit and income extraction.
Insurance - contentious and non-contentious
We advise clients in the betting and gaming sector on issues relating to insurance coverage and clients on duty of care issues. Examples of our experience include:
- Acting for William Hill on its £50m PremPredictor game, including advice on a bespoke programme of Prize Indemnity Insurance
- Acting for a UK listed bookmaker in relation to online and retail duty of care issues