UK gov outlines draft POCT bill

The UK government has officially unveiled draft legislation that will lead to a point of consumption taxation and licensing regime being imposed on UK-facing gambling operators.

In a paper entitled Draft Gambling (Licensing & Advertising) Bill, Hugh Robertson, Minister for Sport and Tourism and as part of the Department for Culture, Media and Sport outlined that the draft legislation would “allow for the amendment of the Gambling Act 2005 so that remote gambling is regulated predominantly on a point of consumption basis”.

The Culture, Media & Sport Select Committee has been charged with carrying out “pre-legislative scrutiny” with members of the gaming industry asked to contribute and give their feedback to today’s bill ahead of its introduction to Parliament.

Under the draft bill all operators selling into the UK, whether based here or abroad, will be required to hold a Gambling Commission licence to enable them to transact with British consumers and to advertise in Great Britain.

Under the current arrangements set out in the Gambling Act 2005 only operators with “key equipment” in Britain are required to be licensed by the Commission, while operators in European Member States, Gibraltar and white listed jurisdictions can advertise in Britain “in reliance on the licence held in their home jurisdiction”. Today’s paper described the current system as “flawed” and can no longer adequately ensure the continued protections for British consumers the act envisaged in a changing European and international landscape.

“The government therefore believes that it is essential, now more than ever, for the protections envisaged in the Gambling Act 2005 to be afforded to all British consumers, regardless with whom they choose to gamble,” it said.

Under the new regime operators will be required to pay licence fees and to contribute to research, education and treatment in relation to British problem gambling and regulatory costs, the Minister said, explaining the proposals are an “important measure to help address concerns about problem gambling and to bridge a regulatory gap, by ensuring that British consumers will enjoy consistent standards of protection, no matter which online gambling site they visit”.

“The government is committed to strengthening the regulation of remote gambling to ensure that effective consumer protection measures are afforded to all British based consumers.

“Currently, consumers based in Great Britain face different consumer protection arrangements, and have to deal with a myriad of different regulators, depending on where the remote gambling they are taking part in is regulated.

“This problem is growing as more countries permit online gambling. At the same time, it is unfair to GB-licensed gambling operators that overseas competitors benefit from access to the market in Great Britain without necessarily bearing a fair share of the costs of regulation, or of research, education and treatment of problem gambling,” he said.

Overseas operators will also be required to inform the UK regulator about suspicious betting patterns to help fight illegal activity and corruption in sports betting.

“These reforms will ensure consistency and a level playing field as all overseas operators will be subject to the same regulatory standards and requirements as British-based operators,” the Minister concluded.

In June this year eGR reported that the Offshore Gambling Bill would receive a second hearing on January 25 2013 and that it was “firmly on the path to becoming law”, according to Matthew Hancock, the conservative MP who originally introduced it.

This followed an announcement in July last year by John Penrose, former Minister responsible for gambling policy and regulation, stating that all on and offshore operators selling services into the UK would in future have to obtain a licence from the Gambling Commission if they wish to continue offering online gaming to UK customers.

The DCMS release states that “it is hoped that the bill will be introduced in the third session, Parliamentary time allowing”. This is due to end in the Spring of next year. The bill has also been notified to the European Commission, a “mandatory notification procedure for all draft legislation dealing with services provided on a commercial basis over the internet”, according to law firm Olswang that published a note following the announcement. Following notification, a standstill period of three months must be observed meaning that legislation cannot be adopted before 4 March 2013.

Any substantive amendments which are made to the bill following the consultation period will require a further notification to the EC, with adoption of the legislation without following this procedure renders it unenforceable. During this period other European Member States and the EC will examine the bill and may react. The standstill period can then be extended if potential issues regarding the compatibility of the bill with EU law need to be resolved.