UK Gambling Regulation - reform updates thread
This thread will contain all the latest updates to the regulatory updates to / reform of the UK Gambling Act 2005 which has been rumbling on in reports over various threads in the last 6-12 months:
Latest news on the reg reform front is that a parliamentary hearing was held on Tuesday this week to discuss the proposed 15% point of consumption tax. The usual wranglings over how much the tax should be were evident, with the operators wanting something like 5-10% rather than the higher 15% the government is proposing.
Summary of the hearings:
- MPs accused the remote gambling operators of only moving overseas to avoid paying tax (duh?). Comparisons were drawn to Starbucks et al.
- Submissions from interested parties were heard:
- WH and PP want 5-8% tax rates instead of the 15% rates proposed
- Gibraltar threatened to take legal action if the UK go ahead with the proposed point of consumption tax
- Gibraltar also suggested that the UK govmt proposals were only interested in raising tax and nothing to do with protecting consumers (again, duh? ).
So... more fun and games, perhaps the tax rate of 15% will come down. Also of interest was the fact that the govmt position again seems quite a bit softer than intially outlined when Gibraltar pointed out that UK consumers will simply avoid the UK big players and go to the smaller gambling outfits that are based overseas and so can avoid the 15% tax (which seems to imply that Gibraltar at least thinks that the govmt plan isn't draconian enough to force UK punters not to go overseas for their remote gambling fix).
Here's the article this is based on from Calvin Ayre (who've had a rather funky facelift recently by looks of it!):
UK MPs see online gambling of behaving like Starbucks, Gaming Industry : Online Gambling News
Caffeinated UK MPs accuse online gambling firms of behaving like Starbucks
by Steven Stradbrooke
The UK Treasury’s proposed 15% point of consumption tax for UK-facing online gambling firms was the hot topic of discussion at a parliamentary hearing in London on Tuesday. Remote Gambling Association president Clive Hawkswood was on hand to represent the viewpoints of most of the UK gambling companies that shifted their online operations from the UK to Gibraltar and white-list jurisdictions like Alderney, Antigua and the Isle of Man. Members of the Culture, Media and Sport Select Committee grilled Hawkswood on the gambling firms’ stated opposition to the proposed Gambling (Licensing and Advertising) Bill, which will require all UK-facing companies to acquire a Gambling Commission-issued license, to which the Treasury proposes to couple with the 15% tax and take effect by December 2014.
The MPs suggested the gambling firms’s sole reason for opposing the plans was to avoid paying more tax, and more than one MP drew comparisons with recent revelations that coffee giant Starbucks paid less than £9m of UK corporation tax over the past 14 years. According to GamblingCompliance, Hawkswood acknowledged that the online gambling firms viewed the 15% tax rate as “slow death,” but pointed out that these companies weren’t exclusively UK-facing, and as international companies, they chose their base of operations based on what ”makes best commercial sense.” When MPs pointed out that Stoke-based Bet365 had chosen to retain its online operations in the UK, yet somehow managed to continue turning a profit, Hawkswood said Bet365 could be more successful under a less punishing tax regime.
The Committee also heard written submissions from interested parties, including William Hill, which suggested a 5% tax rate would be the way to go, while Paddy Power suggested a range between 5-8%. The submission from the reliably combative Gibraltar Betting and Gaming Association (GBGA) suggested Gibraltar would be compelled to file a lawsuit if the UK’s draft legislation is approved. The suit would accuse the UK of reforming their regulations for the primary purpose of boosting their tax receipts, which would run contrary to EU edicts. With 12% of its total workforce dependent on the online gambling industry, Gibraltar could face the same fate Antigua suffered as a result of the US invoking its protectionist measures.
The GBGA referred to the UK draft legislation as “misconceived and unwarranted on any objective analysis” of both the industry and the consumer protections offered by the current scheme. Indeed, Gibraltar notes that the UK draft law proposes no enforcement measures, which would encourage UK punters to seek out better priced online options from operators in jurisdictions not subject to the UK tax nor the remonstrations of UK regulators, creating the exact opposite scenario to the one the UK claims to be striving to achieve. Members of the Gambling Commission and the Department for Culture, Media and Sport will offer their own evidence to the Committee on Feb. 12.
Last edited by munk; 01/02/2013 at 12:32.
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Some more news on the gambling regulatory reform / point of consumption tax (POCT) implementation front... this time actually relatively good news for us APers in as much as the Dept for Culture, Media and Sport (who want to implement the POCT) were put on the back foot by a cross/all party select committee (APCC) this week, with accusations that the only reason the DCMS were trying to implement the POCT was to boost their tax take ("Bear, why do thoust poo in the woods?!" ). Still, facetiousness aside, at least it's nice to have it clearly stated that this is a fairly obvious wheeze by the govmt to grab some taxes from an industry that's commonly seen as recession proof, in a time when we're... well... in recession.
Other interesting points pursued by the APCC were that the proposed regulatory changes that would enable the POCT to work properly may well fall foul of the European courts since they would restrict the ability of non-UK EU countries to offer gaming services to UK customers (regulation would make it illegal for non-UK / Gambling Commission 'greenlit' operators to operate in the UK). Again, this is another kind of 'Is the pope catholic?' type of question, of course the whole point of the regulatory change is to outlaw rogue operators, but coming up with something that doesn't throw the baby out with the bathwater is very difficult to do - by definition the regulation will block competition from non-UK regulated companies. That said though, there's nothing to stop those non-UK regulated companies from actually becoming UK regulated if they really wanted to continue offering services to UK punters.
Various articles on this floating around:
Motives with online gambling tax questioned : The iGaming Post
UK Online Gambling Tax Plan Scrutinized; Anti-FOBT Campaign | Gambling News : Online Gambling News
and an interesting bit of comment from Mark Davies' blog (ex Betfair founder) outlined by the gaming industry analyst Numis:
Place of Consumption tax – Numis thoughts | Mark Davies
In it, Numis suggest that the POCT will not be introduced for various reasons - I remember Andy saying a long time ago that he didn't think it would ever come to pass, do hope they're right.
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Just to follow up on this excellent piece by Munk, we're tracking the Gambling (Licensing and Advertising) Bill as it goes through the commons and lords.
The Gambling (Licensing and Advertising)Act has received Royal Assent but will not come into force until 1st September 2014 at the earliest.
There is a useful FAQ document at
Last edited by Ascot_Ed; 22/05/2014 at 17:44.
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Is there currently any sign that overseas books may change their position re UK customers come September -or thereafter?
some may... but lots of the overseas books still take bets from americans
fbi and american government are far more risky to ignore than uk Dept for Culture, Media and Sport and uk tax authority
id fully expect them to continue allowing uk to bet with them
may lose a couple of european books, tho there arent many i use or trust tbh
the ones with highstreet uk presence will have to adapt if new rules are in place i imagine cant see will hill or paddy stopping supplying uk with sportbetting online
an untracable currency like bitcoin but that was linked to a dollar and better encrypted may be useful to bookies in future
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thanked for this post
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