Do You Need a License to Accept Bets?
Betting is so prevalent in today’s society that we see ads on the TV each day and most can admit to placing some form of bet whether it’s on sports, in a casino, or even just playing the lottery. While some like to place outrageous 15-team football accumulators at the weekends, others like to play bingo with friends. With gambling so common, there seems to be a grey area surrounding licensing. Do you need one just for casino nights in the office? Do you need one as a pub owner for a race night?
Today, we want to provide some answers and help those who are thoroughly confused by this area of the industry.
Types of Gambling
When deciding whether or not you need a license to accept bets, it’s important to discuss the different types of gambling; private (non-commercial) and commercial. Normally, the answers to questions in this niche can be answered by carefully reading the 2005 Gambling Act. In this case, we find that gambling is allowed without a license in SOME circumstances. Essentially, this covers non-commercial gambling (in other words, it cannot take place inside the bookie or casino). As long as you aren’t planning to make a profit from the event, your non-commercial event is normally fine.
Using an example from the introduction, let’s say that you want to hold a race night as a pub to raise money for a local children’s charity. In this case, it’s a non-commercial gaming activity where all profits are going to the chosen charity. As such, you don’t need a license. Similarly, the same is true if you hold a lottery where all the money goes to the winning ticket. Although somebody walks away with money, the business itself isn’t making anything.
When you visit a casino or bookmaker, you place a bet knowing that they could end up with the money. With a race night or a lottery, you place the bet knowing that the money either goes to the winner or a charity (not the business!).
What about private gambling? Well, you’re fine so long as the following applies:
- You aren’t charging people to participate
- The event takes place away from the public (such as a workplace)
Both domestic and residential gaming are allowed if they remain on the private dwelling or in the residence.
Bingo or Poker Nights
What if you have alcohol-licensed premises and want to hold a bingo or poker evening?
Poker – Although you might have been told otherwise, you can hold a poker event. However, you need to pay attention to the Code of Practice for Equal Chance Gaming – you’ll find this code applicable to those with an alcohol license. To remain inside the law, we advise speaking with a legal professional. Assuming you aren’t focusing on the gaming aspect, it’s even possible to hold a full poker league. However, you cannot hold an event linked with an event on another premises (it needs to be a solitary league).
Additionally, there are limits on what can be won in a pub poker tournament or league. Players cannot stake more than £5 and the winner cannot walk away with more than £100 in their pocket. As mentioned previously, you also can’t charge people to attend such events; the stake should determine the winnings.
Bingo – Likewise, bingo games are possible without a license as long as it isn’t linked to an event on other premises (and you only include adults). With no gaming license or permit, you can only charge £1 for participation and you cannot give winnings of more than £2,000 in a single week. If you exceed this amount or offer prizes worth over £500, you will need a bingo operating license.
As a side note, all the regulations and limits we discuss in this guide are applicable in the United Kingdom. If you’re abroad, check the local laws because many British tourists have fallen foul of them before.
Casino or Race Nights
We also have some advice for those planning race nights or casino events.
Casino Nights – You won’t need a license as long as the event falls into one of the following categories:
- Non-Commercial Equal Chance – As the name suggests, every player should have an equal chance of winning. To raise money for charity, you can charge a participation fee, entrance fee, or another gambling-related charge. However, you can’t charge any players more than £8 in a day and nobody can win more than £600.
- Non-Commercial Prize Gaming – You need to make prizes clear before the event starts as well as the cause that will receive the money. Depending on the event, you might choose the winner depending on the number of chips held before then handing out prizes.
- Private Gaming – Finally, the public shouldn’t have access to this event which means hiring a specific location. You cannot charge for participation and therefore you also cannot deduct from the prize or stakes.
Race Nights – Following a similar theme, race nights fall into three categories; private, occasional use notices, and non-commercial gaming. With the latter two, you can organise them to raise money for charity. With non-commercial gaming, the participant needs to choose a horse without access to form or odds. As a result, it’s a game of chance. To stick to the rules, many pubs will use footage of old races and offer players a chance to pick a horse without providing form or odds information.
- Non-Commercial Gaming – Like before, non-commercial prize gaming needs to make the prize clear before the start and non-commercial equal chance gaming needs to have all participants on a level playing field. The third type of non-commercial gaming event is called an ‘incidental lottery’ where the limit on deductions from proceeds for a prize is £500. You should only sell tickets during the event itself.
- Occasional Use Notices – Here, a licensed betting operator will take bets. Even if the event is for charity, the licensed operator will take all bets; they normally occur under an OUN (occasional use notice) or at a sporting venue.
- Private Gaming – Again, the public shouldn’t have access and you can’t charge for participation. It’s also important not to take from the prize or stake. No private gaming event raises money for charity because no profit should be made.
In recent years, Betfair has gained in popularity and the premise is that players become the bookmaker. If you haven’t seen a betting exchange before, the idea is that players bet against one another. Essentially, the website is the portal to connect both bettors. Other than that, the players do everything. While traditional websites build profits into the odds, exchange sites take a commission from the winnings.
Although it takes some getting used to, and many have lost lots of money while learning, the odds are perhaps truer on these platforms. When you Back a selection, you believe that the outcome will happen. When you Lay a selection, you’re saying that the outcome will not happen. When you Lay on one horse, for instance, you’re saying that one of the others in the race will win. If you Lay and the horse is victorious, all those who backed the horse will win.
Players become the bookmaker because it’s only possible to stake what the other person is willing to accept. In every bet, you need a matching bet for it to go ahead. Sometimes, it’s better to accept lower odds because of the higher stake. If you offer low odds, people will likely ignore your offer and the bet won’t go ahead.
When you first start using a betting exchange, we recommend hanging around the average market value. When Backing or Laying, remember that somebody needs to do the opposite. The farther you stray from market value, the harder it will be to find a matching bet. Placing £30 on a horse not to win might seem like a sure thing, but this is sport and you’ll lose everything if the horse is victorious.
If you Lay and nobody Backs, the bet is invalid. On other occasions, you can get a partial match so both your liability and potential profit decrease. By operating on a betting exchange, this is a great way to become a bookmaker yourself. However, the danger comes with poor selections and not having bets matched.
When choosing to Back or Lay, remember that the platform can take anywhere between 2% and 5% of your profits. If we look at traditional bookmakers, what they’re essentially doing is Laying so that all customers can Back. With a betting exchange, players take the role of the bookmaker and the market is more open for everyone to enjoy.
Rather than focusing on one outcome, you can place money on several outcomes at once. It even works in football, tennis, and other sports.
Carl Hughes - Editor
Carl Hughes is a leading expert on sports and casino betting. Carl began his career with a BSc in Sport, Exercise and Health Sciences from the University of Birmingham before working within the industry for some of the bigger names (GVC and Bet365) and has been praised as being "a leading sports betting commentator".