The Department for Culture, Media and Sport has said the UK could “commence new arrangements” for regulating remote gambling in Britain on a point-of-consumption basis as early as April 2014, ahead of the previously announced December 2014.
In supplementary written evidence to the ongoing pre-legislative scrutiny of the Gambling (Licensing and Advertising) Bill by MPs, DCMS’ top civil servant Jonathan Stephens said:
“[S]ubject to other demands on the Parliamentary timetable, and if the Bill secured a third session slot, we would anticipate being able to commence the new arrangements at the earliest by the common commencement date of April 2014 or, more likely, October 2014; slightly earlier than December 2014 which was mentioned during the evidence session.”
Stephens also provided the “clarification” he promised while giving oral evidence on 13 February on whether or not the proposals to regulate all British online gambling based on location of consumer, not company, would breach EU law if it was established the government’s main motivation was generating more tax revenue.
“I’m sorry, but I’m not competent to speculate on the implications, in terms of EU law, if we were pursuing regulation purely for taxation reasons - because we aren’t.”
The department’s top mandarin added that he understood HM Treasury to be considering the issue of the reforms’ compatibility with EU law “as part of the usual policy-making process”.
Stephens also reiterated earlier arguments that the reforms were a “necessary and proportionate” means of enhancing consumer protection for British consumers, and that the government would have pursued reform for this reason alone, “regardless of any tax plans”, to shield gamblers from “significant risk of harm” in the future.
Stephens’ comments follow on from an oral evidence session in which he and Gambling Commission CEO Jenny Williams struggled under pressure from MPs to identify problems with the current system.
EU law stipulates that re-regulation of gambling by Member States must be justified in terms of providing enhanced consumer protection; not for the sole purpose of raising taxes.
The Gibraltar Betting and Gaming Association, which last year raised a £500,000 legal fighting fund and counts most of the leading online operators among its 24 members, said in January that it would initiate legal proceedings if the UK decides to proceed with taxing and regulating online gambling in Britain at the point of consumption.
The Bill becoming law would compel operators licensed in EEA Member States, Gibraltar and in jurisdictions on the government’s pre-approved White List to obtain a licence from the Gambling Commission in order to continue transacting with British consumers and advertise in the UK. It would also pave the way for the UK government to tax all of their licensees’ online revenues generated in Great Britain.
While Treasury has yet to confirm the level of the accompanying levy, its tax modelling assumes a continuation of the current rate of 15% of gross profits. Following the offshore exodus to Gibraltar of Ladbrokes, William Hill, Betfair and Coral in recent years, Bet365 now stands alone among the UK’s leading online operators in paying this duty, but has been benefitting from double tax relief since April last year.
Earlier this month, the European Commission extended the standstill period set aside for review of the UK’s point-of-consumption Bill after European egaming hub Malta issued a detailed opinion against the plans.
Article written by Stephen Carter
