Government announces UK gambling reform plans
All operators selling services into the UK will have to obtain a licence from the Gambling Commission - no detail on taxation plans - end of White List, but "trusted jurisdictions" could receive lighter tough rules Minister announces.
All on and offshore operators selling services into the UK will in future have to obtain a licence from the Gambling Commission if they wish to continue offering online gaming to UK customers, John Penrose, Minister responsible for gambling policy and regulation, has announced.
Penrose (pictured right with Prime Minister David Cameron) said the revamped industry would be based on the point of consumption rather than point of supply, however no detail was given on the tax system this would involve, which jurisdictions would be affected or when this would come into force.
“It means anybody based anywhere in the world who wants to sell gambling services to any consumer based in the UK will, in future, have to have a Gambling Commission licence,” Penrose said.
Any new licensing system, however would require a change in primary legislation with analyst James Hollins of Evolution Securities suggesting that this could “push full implementation out to 2013 or 2014″.
“We think that the taxation discussion will come prior to implementation as and when the Treasury gets involved,” Hollins said, however he warned that the suggestion that offshore operators are not “bearing a fair share of the costs of regulation firmly implies, in our opinion, that taxation will become part of the new legislation.”
Lighter touch for “trusted jurisdictions”
Currently any gambling operator offering services in Britain must be licensed or regulated in either an EEA state or one of the states approved by DCMS on the White List that includes the Isle of Man, Alderney, Antigua, and Tasmania.
The new proposals would effectively mean the end of the White List as it stands, however Penrose added that the Gambling Commission would ensure that regulatory good practice is recognised so that overseas based businesses in “trusted jurisdictions”, such as the white listed countries, would have much “lighter touch approach and, for example, will not have to duplicate regulatory work.”
In between a final decision being made on licensing and taxation all white-list located entities will be entitled to a transitional licence and can continue trading as normal.
Allan Bell, Isle of Man Minister for the Department of Economic Development, called the decision to treat trusted jurisdictions such as the Isle of Man with a lighter touch “encouraging”.
“Under the automatic transitional license Isle of Man based companies will have a streamlined point of entry and significantly reduced administrative costs when they obtain a UK license. In my recent conversation with Minister Penrose I received assurances that the UK Gambling Commission has no wish to duplicate the work that our Gambling Commission does in regulating our operators.”
“The eventual timescale for these proposals to enter into force are not yet determined and before the proposals become law we will remain in close dialogue with the UK Government to ensure that the interests of our sector continue to be heard. Alongside this the Isle of Man Gambling Supervision Commission will work with its counterpart in the UK to establish how they will work effectively together under the new regime,” Bell added.
André Wilsenach, executive director of the Alderney Gambling Control Commission (AGCC), called the developments in the UK “good news for Alderney” saying the jurisdiction was “committed to the highest standards of regulation and enforcement, and to the greatest level of cooperation with other regulators.”
In a statement the AGCC added that DCMS and the Gambling Commission had assured it that it intends to implement a “regime of jurisdictional equivalence”, permitting Alderney licensees a “fast track” into UK licensing as and when that regime is implemented.
“We have also been assured that the extent of regulatory activity undertaken by the UK Gambling Commission in respect of non-UK operators, including those located in the EEA, will depend on the degree to which those operators meet the standards, enforcement, experience and level of cooperation with the UK Gambling Commission,” it added.
“The current system for regulating remote gambling doesn’t work, John Penrose added. “Overseas operators get an unfair advantage over UK based companies, and British consumers who gamble online may have little or no protection depending on where the operator they deal with happens to be based.
“We will create a level playing field, so all overseas operators will be subject to the same standards and requirements as those based in Britain, as well as being required to inform the Gambling Commission about suspicious betting patterns to help fight illegal activity and corruption in betting,” Penrose concluded.
More detail needed
Clive Hawkswood, chief executive of lobby group the Remote Gambling Association, said the main players in the UK online gambling market “already adhere to high regulatory standards” comparable to those in Britain adding that regulation by the Gambling Commission “holds no fears” for the group’s members.
However, he warned that a significantly higher tax burden, “that could lead to a reduction in value and choice for consumers”, certainly does [hold fear]. “It is therefore crucial that any new regulatory regime is complemented by a fair and sustainable fiscal regime.”
A bwin.party spokesman told eGaming Review the company was “used to regulation”. “We don’t envisage any problems as and when it comes in, we’re used to being regulated.”
“The British consumer at the moment gets a good deal when it comes to taxation, it’s all about not making a competitive market uncompetitive,” he added.
Martin Cruddace, Betfair’s chief legal and regulatory affairs officer, called the DCMS announcement a “significant step forward” for the industry.
He said that for many years Betfair operated at a “considerable competitive disadvantage” to its offshore competitors before being one of the last to transfer away from a UK licence earlier this year.
“Our revised licensing structure provides the company with the freedom to locate key technical equipment in more efficient locations in order to improve service to customers and compete on a level basis in the UK market. Both of these should be possible with a UK licence and we therefore welcome this first step to a sustainable UK regulatory regime,” Cruddace added.