Definition of a forecast competition
This is where competitors predict the outcome of major competitions, accumulating points for each correct answer. The person with the most points wins first prize.
Definition of a Fantasy League® competition
Fantasy League® are competitions where competitors select teams from a list of players and score points depending on the performance of those players in a future event, for example football matches etc.
What constitutes betting
Because forecasting is involved these competitions could be considered as betting.
To constitute betting the competition must have:
- An entry fee (which includes having to ring entry through a premium rate telephone number)
- Prizes, whether cash, goods or tickets to an event etc
- A power of selection for the entrants which could determine the winner
Who can run these competitions
Only people who hold a bookmaker's permit or who are registered pools promoters can run these competitions.
Definitions of "bookmaking" and "Pool betting"
The definition of Pool betting and "Fixed odds" betting is defined under section 10 of the Betting and Gaming Duties Act 1981. Bookmaking is defined under section 55(1) of the Betting, Gaming and Lotteries Act 1963.
Forecast competitions or Fantasy League® competitions usually fall within these two categories:
Pool betting
It is likely that the competition would constitute Pool betting if,
- The prizes are unknown at the time of entry
- The winnings are a share of, or delivered by reference to, the stake money paid
- The winnings are devisable among all the winners
- The prizes are non-monetary
- The winner or winnings are to any extent at the discretion of the promoter or some other person.
- There is more than one prize
Bookmaking
It is likely that the competition would constitute Bookmaking if;
- Each person entering the competition knows, or can know, at the time of entering the competition the amount that will be won. This would constitute "fixed odds" betting and require a bookmaker's permit.
Licence requirements
If a competition constitutes bookmaking, the organiser is required to apply for a bookmaker's permit from the Betting Licensing Committee of their local Magistrates Court.
If it constitutes a pool competition, the organiser is required to register as a pool promoter with the local authority where the company is based.
Tax or duty liabilities
Bookmaking is subject to betting duty, which is currently 15% gross profit. Pool betting competitions are subject to pool betting duty, which is currently 17.5%.
However, competitions where entry can only be made by means of a premium rate telephone number are currently not liable to pool betting duty.
NB. Betting duty is the responsibility of HM Revenue and Customs. Anyone intending to promote a competition, which may constitute betting, should contact his or her local Customs and Excise Advice centre in advance of the competition starting in order to confirm the correct type of duty to which it is liable. You can find details of your local Customs and Excise advice centre in your local telephone book, or on their website.
Age restrictions
- If the competition is pool betting, anyone aged over 16 may take part.
- If it is bookmaking, the age limit is over 18.
Relevant legislation
There are two principle areas of legislation:
The Betting, Gaming and Lotteries Act 1963 and the Betting and Gaming Duties Act 1981. The former sets out how betting activities must be conducted. The latter addresses the revenue implications of betting activities and is the responsibility of HM Customs and Excise. Copies of the Acts are available from The Stationery Office (0870 600 5522).
NB. DCMS cannot interpret the law or give legal advice. We strongly advise any individual or company seeking to set up any type of betting scheme to seek independent legal advice.