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British Appeal Court Says Offshore Bookie Can't Advertise on UK Television

Tuesday, the UK Appeal Court reversed a decision by a lower court in August that had permitted Victor Chandler to advertise on Teletext. Teletext is a broadcasting company whose programs, including horse races, and ads are available on TV sets in the UK.

Bettors at the country's bookmakers have to pay a tax of 6.75 to 9 percent of their bets. But it's legal for UK citizens to place bets with offshore and/or Internet bookies, who are not subject to the tax.

To try to protect its bookmakers from competition from companies that don't have to collect the tax, Parliament passed a law some years ago that prohibits bookmakers that are not based in the UK from advertising in the UK.

Victor Chandler, which was founded in 1946, has joined the growing number of British bookies who have moved offshore to avoid the tax. In May 1999, the company sold its UK business to its Gibraltar arm, Victor Chandler International.

The Appeal Court said that Victor Chandler International was "anxious to carry on and promote the UK business it had acquired,'' and therefore advertised on Teletext.

The taxing authority said the ads were illegal, because Victor Chandler International was not a UK corporation. In the lower court decision in August, the judge ruled that Teletext advertising was not prohibited because such advertising did not involve a "document.''

Advertising that was prohibited by the law was presumed to be printed material. When the law was passed, electronic means of advertising such as Teletext did not exist.

In this week's decision, the Appeal Court ruled that the law, in effect, changes with the times:

"It is presumed that Parliament intends the Court to apply to an ongoing Act a construction that continuously updates its wording to allow for changes since the Act was initially framed (an updating construction). While it remains law, it is to be treated as 'always speaking.' ''

Victor Chandler has 28 days from the date of the ruling to apply for leave to appeal to the House of Lords.

"This Judgment is a further demonstration of the cautionary stance taken by the UK authorities to the development of offshore/Internet gambling,'' Steven Philippsohn told RGTonline.com. He's a lawyer in London with the firm Philippsohn Crawfords Berwald.

In a few weeks, Philippsohn added, the government is expected to propose additional restrictions on unauthorized gambling activities.

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