BUSINESS

UK publishes draft gambling act revisions for wary industry to contemplate

TAGs: DCMS, Gambling Act 2005, Matthew Hancock, offshore gambling bill, Point of Consumption Tax

uk-gambling-act-draftThe UK government’s long-awaited revisions to its Gambling Act 2005 have been released in draft form (viewable here) so that industry stakeholders can weigh in with their thoughts. (‘I hate the font!’) The key provision of the Draft Gambling (Licensing & Advertising) Bill is the requirement for all operators wishing to take bets from and to target advertising at British punters to acquire a license from the country’s Gambling Commission. The draft makes this recommendation despite acknowledging that “the majority of operators currently targeting British customers are subject to established and effective regulatory regimes.”

The 2005 Act permitted operators to do business in the UK provided they held licenses issued by European Economic Area member states, Gibraltar or ‘white listed’ jurisdictions such as Alderney, the Isle of Man and Antigua (an openness which the draft bill points out made the UK unique among European nations). The ‘white list’ will be phased out under the new scheme.

The legislation also envisions a ‘point of consumption’ tax on all wagers originating in the UK, regardless of where an operator is based. The Treasury has proposed this tax be set at 15% of gross profits, which was predicted to contribute up to £242m in annual revenues to the UK government’s coffers when it goes into effect towards the end of 2014. Operators like William Hill have vowed to fight the introduction of this tax.

In publishing the draft law, sport and tourism minister Hugh Robertson said the 2005 legislation was “not working as well as intended and has become unsustainable.” Gambling Commission chairman Philip Graf said the body had issued licenses to just over 200 operators since 2005, representing less than a fifth of the companies currently serving UK punters. As such, Graf claimed the Commission currently had no power to compel the vast majority of operators to provide it with “information about suspicious sports betting transactions.” Robertson said operators would also be expected to contribute to the upkeep of UK regulatory bodies and to “research, education and treatment” programs dealing with problem gambling.

The draft promises the cost to operators already licensed in qualified jurisdictions will be minimal, as the UK’s system will be “light-touch, avoiding duplication by relying on the work of other regulators, subject to sufficient on-going assurance of quality and rigor.” Operators licensed in such jurisdictions currently doing business in the UK will be granted provisional licenses to minimize disruption. Those UK-based operators who didn’t follow the herd by moving their operations to jurisdictions like Gibraltar may find there is “some (as yet unquantified) marginal net benefits in relation to fees” under the new scheme. Shadow sports minister Clive Efford described the draft bill as “a step in the right direction, but we will want to see how it will be policed and how it will be enforced.” The Offshore Gambling Bill originally introduced by Tory MP Matthew Hancock is due for a second reading in the House of Commons on Jan. 25, 2013.

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