Broadcasters May Need To Apply For Call-TV Licences

Broadcasters could be forced to apply for licences for call TV quizzes under the new gambling act, following the publication of new guidance by the Gambling Commission.

Producers and broadcasters have argued that these services should be exempt from licensing regulation under the 2005 Gambling Act, because they offer a free route to play via websites and therefore qualify as “free draw”.

However, the Gambling Commission remains unconvinced by this opinion. In its guidance – looking at the distinction between free draws, prize competitions and lotteries – the Gambling Commission said, despite an extended period of consultation, that it “remains concerned” that free entry to TV quizzes via the web is not sufficient to avoid regulation.

The Commission is also concerned that call-TV quizzes in effect operate in the same fashion as lotteries.

“”The Commission remains concerned that entry to call-TV quizzes through an alternative web-based free entry route may not be considered to be as convenient as via the paid route, and may not meet the statutory test to qualify as a free draw,” the Gambling Commission said in a statement.

Prior to September 1, when new powers to intervene over breaches of the Gambling Act come into force, meetings with the main broadcasters and operators of call-TV quizzes are planned by the commission to “discuss how such concerns can be addressed”.

If call-TV quizzes are classified as lotteries they will have to be regulated by the commission and 20% of revenue must go to charitable causes.

“Prize competitions and free draws remain free of statutory control but operators who cross the boundary and operate a lottery will be required to apply for an operating licence from the Commission or cease to operate,” said the Gambling Commission deputy chief executive, Tom Kavanagh.

More specifically, in the responses section of the Gambling Commission’s guidance it admitted that “those who argued that web entry is a sufficient alternative to paid routes… have made some reasonable points” and that “in many cases free web entry is likely to satisfy the test in the act, particularly where entries are required in relatively slow time or the target audience is such that ready access to the web is highly likely.”

However, the commission added that it “retains concerns that TV quizzes… where the need for immediate responses is emphasised to enable participants to win the available prizes or the quiz is only run for relatively short periods [do] not always satisfy the statutory test”.

In April, the Gambling Commission extended its consultation over the issue, stating it was unconvinced by broadcasters’ arguments for why call-TV quizzes should not be classified as lotteries.

Last year, the commission launched a consultation in which it asserted that the simple questions used in TV phone-in quizzes are actually a form of gambling and as such require licensing and regulation under the Gambling Act.

The consultation has been looking at whether question formats used in premium-rate phone-ins should actually be classified in a similar category to pay-for-play lotteries.

Broadcasters and producers responded by arguing in their original submissions that these call-TV competitions and shows qualified as a “free draw”, not gambling, because they offered a free route to play via a website.

At last week’s Westminster Media Forum, panellists and contributors argued that the demand for participation TV would increase, and as this happens, regulators must come to an agreement as to how to police the industry, ensuring consumer protection as well as secure revenue streams for broadcasters.

There will be change in the way these services are regulated, according to the chairman of premium rate phone-in regulator Icstis, Sir Alistair Graham. However, he said that this would be a lengthy process, as two-way participation increasingly becomes one of the major aspects of the media landscape.

Premium rate services are not broken, he said, but something went wrong.

Graham argued that there needed to be better dialogue between the regulators, and that having a single regulator was not enough. He believed “harmonised clarity” was the key.

In light of the recent record ruling by Ofcom to Five (see Five Gets Record Fine For Brainteaser Blunders), many panellists expressed the view that there was not an intrinsic culture of deceit in these services, but rather a handful of errors.

“I think we now have to question whether [the current regulatory system] actually works for the benefit of the consumer, or whether a major change in the system is required to restore consumer confidence and to avoid continued consumer detriment,” said Kate O’Rourke, a member of Ofcom’s consumer panel.

She questioned whether the steps already taken had been too little, too late, and whether there was actually too many regulators muddying the waters and whether self-regulation was the answer.

“The way forward… must be more transparent regulation in the sector,” she added, pointing out that some of the recent issues were essentially what amounts to fraud.

What the consumer and the industry need is better regulation, she stated. “That means not just having the right laws in place, but efficient monitoring to check on the compliance of those rules, and swift and effective procedures to ensure that the consumer gets redress when things do go wrong.”

The participation TV sector has been under close scrutiny of late, with new rules introduced by Icstits and Ofcom, after alarming issues surrounding a selection of programmes came to light in the first half of 2007 (see Hanging On The Telephone).

Ofcom: 020 7981 3040 www.ofcom.org.uk