The UK’s proposed Gambling (Licensing and Advertising) Bill was debated in front of the Public Bill Committee on Tuesday. The Bill, which seeks to impose a point of consumption tax (POCT) on online gambling operators and will compel all UK-facing companies to hold licenses issued by the UK Gambling Commission, passed its second reading in the House of Commons last week, and the Committee is now considering input from stakeholders.
Among those giving oral evidence on Tuesday was Clive Hawkswood, CEO of the Remote Gambling Association (RGA). The RGA has long insisted that the POCT will make UK-regulated operators’ offering uncompetitive with that of operators licensed in other jurisdictions. In a response to the government’s suggestion that it would IP-block these international operators, Hawkswood said similar measures in other jurisdictions had proven “not wildly successful.” Hawkswood said the “key to successful blocking is providing a regime and a service to customers where they will not feel the need to go outside the market for those services.”
This view was echoed by Peter Howitt, CEO of the Gibraltar Betting and Gaming Association (GBGA), which represents many of the bookies who relocated their online operations to Gibraltar to avoid the UK’s unfavorable tax regime. Howitt said the “evidence is incontrovertible” that IP- and payment-blocking mechanisms were less effective than making the domestic online gambling environment “commercially attractive and sensible.” Howitt noted that if America’s previous enforcement measures had proven ineffective, “it is difficult to see why the UK believes it will have a better result.”
Nic Coward, on hand representing the Sports Rights Owners Coalition (SROC), begged to differ, suggesting that if blocking mechanisms were ineffective, then “perhaps something bigger, bolder and better could be put in place.” Coward wants an “effective enforcement regime” so that operators know “there will be consequences” of not towing the line.
Questioned as to whether the GBGA was planning a legal challenge to the Bill, Howitt said his group had been “up front” about considering such a challenge, but was “working hard and very much hoping that it will not come to that.” If such a challenge was mounted, Howitt said it would focus on the Bill’s “disproportionate response to the stated objectives,” in that it would impose extra regulatory costs on operators without producing any real extra protection for consumers.
The Gambling Commission has previously stated that 95% of all online wagering conducted in the UK is done via sites regulated by jurisdictions with which the UK government has no complaint, leading critics to suggest the Bill’s primary purpose is increasing taxation revenue, not protecting consumers. Asked why highly successful Stoke-based operator Bet365 had not seen fit to join the herd of operators decamping to Gibraltar, Hawkswood insisted that “bet365 themselves make it clear that if the [proposed POCT regime] was in place, they would probably be forced to move as well.”
ONLINE CASINOS IN CASINOS
The hearing’s second phase saw Roy Ramm, Director of the National Casino Forum, make a plea for brick-and-mortar casinos to be able to offer online casino gambling and sports betting via dedicated terminals. Ramm said the casino business had been “pretty stagnant” and this new option would help “level the playing field.” A Select Committee had suggested such a plan was in the offing and Ramm said his group had been “surprised and disappointed” that the measure never made it into the Bill’s final text. Ramm warned that if casinos were “unable to evolve our products and offer modern products, our customers will eventually vote with their feet.”
Ramm dismissed a suggestion that it was inappropriate for casinos to be able to host gaming machines offering unlimited stake and prize gaming, noting that every WiFi-connected iPad in the Committee hearing room represented an unlimited stake and prize machine. Ramm said the devices installed in the casinos would allow customers “to play online poker, international online poker with people across the world, and virtual table games on those machines. To see an online gaming terminal as entirely synonymous with a category A slot machine is a misunderstanding of the two products.”
SPORTS INTEGRITY
When the discussion changed to the desire to curtail match fixing, Tim Lamb, CEO of the Sports Betting Group (SBG), said he supported the Bill’s efforts to impose “a consistent regulatory regime” covering UK-based operators as well as those based outside the UK. However, suggestions that most match-fixers prefer to wager with international operators were dismissed by the SBG’s Paul Scotney, who noted that “there are threats to some sports from illegal betting in other countries, particularly football and cricket, but for many of the other sports, such as horse racing, snooker, darts, rugby and tennis, it is as much the legal markets.”
Lamb criticized governing bodies for devoting £6m to combatting doping in sport, while providing next to nothing to boost sports integrity efforts. British Horseracing Authority CEO Paul Bittar pointed out that betting companies were way out in front of anyone seeking to ensure sports integrity, “because ultimately their livelihood, due to consumer confidence in sport, comes down to the fact that the betting companies need sports to be clean.”
Bittar also pressed for betting companies to provide more funding for racing, suggesting “the sport’s ability to fund its own regulation and integrity should be linked to those companies taking bets on that sport.” Bittar acknowledged that operators like Betfair, William Hill, Ladbrokes, Coral and Betfred had agreed to make voluntary contributions to racing, but insisted these were no substitute for enforced Levy payments. Bittar said he disagreed with the Government’s contention that imposing a Levy on online operators would contravene European state aid rules.
The Committee will continue to accept written evidence from stakeholders until Nov. 19. Assuming no unexpected derailments, the Bill is slated to take effect May 1, 2014.
