DCMS’ top civil servant yesterday came under heavy pressure from MPs to justify the government’s proposed new online gambling regulations, as he insisted these were “not about taxation”.
Permanent Secretary Jonathan Stephens was charged by MP and ex bookie Philip Davies in the second session of pre-legislative scrutiny of the Draft Gambling (Licensing & Advertising) Bill that re-regulating British-facing operators on a place-of-consumption basis was simply a cover for the Treasury to raise revenue:
“This is about tax, isn’t it? It’s not about regulation? It’s about a good way for the government to raise revenue”, said Davies. “Am I right in thinking that a bit of nervousness has broken out in government, because if it is about tax, which it clearly is, if it is, that’s likely to end up with a legal challenge against the government, as that might fall foul of European law? Whereas if you can convince people it’s about regulation, then you will be entitled to do It from a European law point-of-view.”
Stephens responded that: “European law allows for vital national legislation in this areas, in areas where it’s directed at a matter of public protection, social protection, providing it’s not discriminatory, providing it’s both necessary and proportionate. The governmnent’s view is it is all of those things. It is not about taxation.”
But Davies told the mandarin that “from a regulatory point-of-view, it’s a solution looking for a problem”, and that “none of this rings true”, referring to the reasons for re-regulation given by Stephens and Gambling Commission CEO Jenny Williams during yesterday’s session of the Culture, Media and Sport Select Committee.
“We’ve got no particular public protection risks that have yet arisen, we have two cases a year of illegal advertising, the biggest operator [Betfair] has given you all the information you need about match-fixing. All this points to is that this is a Treasury-driven piece of legislation”, said Davies.
Stephens however insisted that: “[T]his legislation is about regulation, and where regulation is based, and that’s an independent decision, not dependent on the decision on taxation”. He also told MPs that he didn’t think a legal challenge at the European level - likely to come from Gibraltar - would be able to prevent or delay implementation of the new regime by December 2014, as planned.
But when pressed again by Committee chair John Whittingdale on whether the regulations would breach European law if it was established that making offshore operators pay tax was the government’s motivation for introducing them, Stephens declined to provide a verbal answer.
“I’m going to be very cautious on that, and say I’m happy to write to you with a view on that. But I’m not going to anticipate that without some advice.”
Under pressure from Davies, Stephens and Williams consistently struggled to identify problems with the current system, with Stephens justifying its replacement in terms of future, unsubstantiated threats to British consumers.
“Part of the approach of regulation is to take a prudent approach in which one anticipates risks and seeks to prevent them becoming serious problems. The government thinks there is a risk here, one of the reasons we are taking action is to make sure that risk doesn’t become a problem.”
Williams conceded that “probably well below 5%” of British consumers were currently using sites regulated in new and untested jurisdictions and that “no specific public protection risks” existed, with Stephens only proferring Bulgaria and Latvia as examples. Williams also admitted under questioning that she was “not unhappy” about the regulatory regime in Gibraltar, where most of the major British-facing operators are licensed.
Article written by Stephen Carter
