UK Consults On Remote Gambling

by Robin Pilgrim, LawAndTax-News.com, London

08 April 2010

The UK Department for Culture, Media and Sport (DCMS) has launched a consultation on licensing online gambling, underlying which has been the increasing trend for UK operators to move offshore and for UK gamblers to use offshore sites. Although the reason for this trend has clearly been the lower tax rates offshore, the consultation specifically avoids the tax issue.

Under current arrangements (set out in the Gambling Act 2005), operators who have key equipment in Great Britain are required to be licensed by the Gambling Commission, whilst operators licensed in European Economic Area (EEA) member states, Gibraltar and 'white-listed' jurisdictions (Isle of Man, Alderney, Tasmania and Antigua and Barbuda) are permitted to advertise in the UK by virtue of the licence held in their home jurisdiction.

The DCMS's findings show that fewer and fewer gambling operators are being regulated in Britain since the implementation of the Gambling Act 2005 (in September 2007) and that no major remote gaming operators have chosen to relocate to Great Britain.

The UK government is consulting on four options in respect of EEA member states and three options for non-EEA jurisdictions. On the basis of three criteria (consistency, fairness and cost recovery), the government's preferred option is to require all operators in EEA member states, Gibraltar and white-listed jurisdictions that want to advertise to and/or transact with British consumers, to obtain a licence from the Gambling Commission. It also wants to streamline aspects of the 'white-list' system.

The DCMS stated that it should "consider regulatory and taxation issues separately and that it would be inappropriate, and contrary to EC law, to make regulatory changes based solely upon fiscal reasons."

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