MPs have criticised government proposals for the regulation of UK online gambling from 2014, saying they “remain very unclear”.
The Commons Culture, Media and Sport Committee published its view of the government’s plan for all UK-facing online gambling operators to be licensed by the Gambling Commission by December 2014 in today’s report on the 2005 Gambling Act.
While the Select Committee accepted that the current regulatory framework has “failed to create a level playing field between operators based in the UK and those based overseas”, by subjecting the former to strict regulation and high taxes and the latter to little or none, it declared that the government’s proposals for remote gambling regulation “remain very unclear”.
Particularly unclear, they argued, was how the Commission intended to either approve and monitor regulators in other jurisdictions or to take on the job of directly regulating and licensing all individual UK-facing operators and companies itself.
“It is not currently clear whether the Gambling Commission intends to carry out licensing checks on all companies that apply to operate in the UK”, said the Committee, which also added that it recognised it “would be unrealistic for the Commission to inspect directly individual regulators across all other jurisdictions.”
While also finding “no evidence to suggest that the existing White Listed jurisdictions pose a greater threat of problem gambling than UK or EU-based operators”, MPs recommended the Commission approve certain overseas regulators to “act as its agents – regulating online gambling sites targeting the UK on its behalf”, and to monitor their performance via “test purchasing exercises to ensure that these national regulators continue to carry out sufficient licensing checks.”
Further, MPs said any additional costs to the Gambling Commission that resulted from this new “light touch” regulation through overseas jurisdictions would need to be covered by the regulator from “within its existing budget”.
MPs concluded: “Given that most UK operators have located their online operations offshore, this inquiry has heard concerns regarding the expertise of the Gambling Commission to monitor effectively a much larger number of online licence holders under the proposed changes to the regulatory regime.
“The Commission will, therefore, need to bolster its capability to do so, from within existing resources, as supplemented by licence income from the online operators it approves.”
The Committee also called the Gambling Commission “an overly expensive, bureaucratic regulator”, recommending that an independent review of its expenditure take place as soon as possible after the proposed amended remote licensing regime is implemented.
The UK Treasury also “still needs to work with industry stakeholders” over the level at which to set the forthcoming point-of-consumption (POC) tax for online gambling, MPs added. The Committee also recommended the Gambling Commission consult the online gaming industry as to what form of “ring fencing or protection of player accounts, by all UK-regulated online gambling operators, would be a proportionate response” to concerns raised by last year’s Full Tilt episode.