Ofcom Proposes to Reclassify Gambling Channels

This article was produced by Olswang LLP, which joined with CMS on 1 May 2017.

Ofcom wrote to all TV gambling channels and other interested stakeholders in February 2008, proposing to re-categorise TV gambling channels as "teleshopping" services. Such changes were designed to increase and improve consumer protection, ensure a clear, consistent and robust regulatory framework, and align Ofcom policy with the broad definition of advertising set out in the Gambling Act 2005.

If adopted, the proposal would amend the classification of gambling channels and gambling programming from "editorial" (as is currently the case) to "teleshopping". Ofcom stated that in the context of this proposal, "gambling channels" and "gambling programmes" are those channels and programmes that offer the opportunity to viewers to take part in remote licensed gambling and whose content is wholly or mainly devoted to that activity. This does not include services and programmes in which reference to gambling is incidental or linked to content but appropriately limited, for example:

• sports channels on distribution platforms which provide the opportunity to bet interactively during sports events such as football matches and where the sporting event is the principal content; or
• horse racing where the inclusion of references to odds, form and the like remain a conventional and subordinate element of the programming; or
• quiz TV channels or programmes.

Where it is unclear whether a channel or programme should be judged "teleshopping" or otherwise, decisions will be made according to the facts on a case by case basis.

The impact of the changes would include that:

• consumers would have greater protection, as the advertising rules provide for greater consumer protection than the rules for editorial material;
• the reclassified channels would be subject to clearer and simpler regulation (e.g. the BCAP Code applies to all content on "teleshopping channels", whereas programming content on "editorial" channels is subject to Ofcom's Broadcasting Code and any advertising is subject to the BCAP Code);
• teleshopping/advertising allows "direct calls to action", which gambling channels may use (e.g. "place your bets now");
• the change would align the channels' status under Ofcom policy with the Gambling Commission's under the Gambling Act 2005, which contains a very wide definition of advertising likely to include the existing editorial gambling channel formats; and
• there is a small difference in the licence fee for "editorial" and "teleshopping" channels, with the former being more expensive for channels with revenues below £2.5m.

Any reclassification of gambling channels is likely to have the greatest impact on two types of broadcaster. Firstly, those operating gambling channels and, secondly, smaller channels on the entertainment part of the Sky EPG (i.e. those not affiliated with larger broadcasters or part of a suite of channels).

The actual gambling channels themselves (primarily found at numbers 840 to 851 on the Sky EPG) may not experience too great a change, as their core business of viewers betting interactively is likely to be largely unaffected. However, some of these channels do gain additional revenue and exposure by simulcasting on the smaller channels in the entertainment genre of the Sky EPG. As these "editorial" channels are only allowed to carry three hours of "teleshopping" programming a day, any of those "editorial" channels which currently simulcast both gambling programming (potentially classified as "teleshopping") and existing "teleshopping" programming may be forced to reduce this output. This could also have an impact on those smaller channels in the entertainment genre by reducing their income (from any revenue shares with the gambling channels) and increasing their editorial costs (as they have to find new programming to fill the holes in their schedules).

Stakeholders had to respond to Ofcom by 19 March 2008.