BUSINESS

High Court rejects Gibraltar challenge of UK’s new online gambling law

TAGs: Gibraltar, Gibraltar Betting and Gaming Association, Point of Consumption Tax, UK Gambling Commission, UKGC

gibraltar-uk-online-gambling-challenge-rejectedGibraltar’s gambling regulator has lost its legal quest to prevent the UK from implementing its new online gambling licensing regime. The Gibraltar Betting and Gaming Association (GBGA) had sought to block the UK’s regulatory rewrite, under which all UK-facing online gambling operators must hold a license issued by the UK Gambling Commission and pay 15% tax on their online revenue earned from UK punters. The UK had set an Oct. 1 deadline to implement the new scheme but delayed this date by one month in order to allow the UK High Court time to deliberate.

On Friday, High Court Lord Justice Nicholas Green concluded that the GBGA “has not established that the new regime is unlawful under [European Union] or domestic law.” Green rejected the GBGA’s assertion that the UK’s plan would “create perverse incentives and lead to the creation of an illicit market of unscrupulous service providers.” Finally, Green rejected the GBGA’s alternative ‘passporting’ plan, in which qualified regulators like the GBGA would retain responsibility for licensing their own operators while sharing data with the UKGC.

Adding insult to injury, the GBGA was also ordered to pay £100k to cover the UKGC’s court costs. A GBGA spokesperson subsequently declined to state whether an appeal of Friday’s ruling might be in the works. Assuming no appeal is forthcoming, the UK’s new licensing regime will take effect as scheduled on Nov. 1, with the online point-of-consumption tax kicking in on Dec. 1.

A spokesperson for the UK’s Department for Culture, Media and Sport welcomed Friday’s ruling for allowing “robust and consistent regulation” of UK-facing operators. The GBGA spokesperson countered that the UKGC lacks the extraterritorial authority to hold international UK-facing operators to account and that there was now “even greater need for an EU legal framework for online gambling.” Shares in UK bookmakers that had relocated their online operations to Gibraltar fell following the Court’s ruling, with William Hill down over 2% and Ladbrokes down 6.6% to 110.7p, barely half its March 2013 peak value. Numis Securities cut Ladbrokes’ 2015 earnings forecast by 33% following the ruling.

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