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Alderney Defends E-Gaming Regulations

by Phillip Morton, Investors Offshore.com

26 January 2011


The Alderney Gaming Control Commission has issued a statement rejecting statements made by British newspapers that the island, despite the jurisdiction’s white-listed status - offers less protection to UK consumers than companies offering the same services from Britain.

In a statement on January 20, the Commission said: “There is no basis for suggesting that ‘around a million’ children are affected by addictions to online gambling especially considering that it is made in advance of the next gambling prevalence study and past studies which have indicated that there is a low prevalence. [Further] there is no evidence suggesting that the current white listing regime compromises player protection. The obvious reason for the increasing number of operators having relocated to overseas jurisdictions primarily relates to the high level of gambling tax that applies to operators being licensed in the UK and not, as suggested, because British operators were hoping to escape from their responsibility to protect British consumers.”

The Commission cited the findings of a mystery shopping exercise undertaken by the UK Gambling Commission of both British licensed and overseas operators a few years ago, under which the Commission said the white-listed overseas operators did not perform any worse than their British counterparts in respect of preventing minors from access gambling sites.

The Commission did however note that: “It seems that the inability of the UK government to find a way of compelling EEA (European Economic Area) jurisdictions to uphold the same standards applicable to the UK and its white-listed jurisdictions might be the real issue for the government.”

Next, the Commission noted reports that Jeremy Hunt, the UK Secretary of State for Culture, Media and Sports, intends to make changes to the UK’s gambling laws which will in future prevent the online gambling companies based in white-listed jurisdictions, such as Alderney, from advertising their products in the UK. According to these reports it is suggested that the new coalition government is concerned about the extent to which the UK public is protected against gambling companies that don’t meet the UK’s standards. Responding to this aspect, the Commission further stated:

“The Alderney Commission is concerned that the UK government may not fully appreciate the implications of introducing a system where all operators currently based outside the UK are required to be licensed by the UK Commission. Adding to the already high compliance burden and regulatory cost to operators will be making it even more difficult for the regulated segment to compete with the unregulated segment of the remote gambling industry which will no doubt continue to provide their services to British consumers irrespective of these changes.”

“What is evident is that a system of licensing all UK facing operators irrespective of whether they are licensed and regulated elsewhere will result in an increasingly onerous, overlapping, costly and potentially confusing regulatory environment. There are currently an estimated one hundred overseas operators based in European and white listed jurisdictions. By requiring these operators to be licensed in the UK it will undoubtedly add to the existing burden of the UK Commission, which is unlikely to be provided with additional resources considering the current economic climate. This raises the question: will this approach result in the online gaming industry being better regulated?”

Concluding, the Commission said: “Operators based in Alderney facing the UK market are compelled to contribute financially to organizations in the UK dealing with problem gambling, whereas we understand that the UK government has no such requirements in respect of UK licensed operators.”

A comprehensive report in our Intelligence Report series examining the new possibilities that offshore e-commerce open up for business, and analysing the offshore jurisdictions that have led the way in offering professional e-commerce regimes for international business, with a particular focus on e-gaming, is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report6.asp
TAGS: compliance | tax | business | gambling tax | commerce | law | United Kingdom | offshore | internet | e-commerce | gambling | licensing | Alderney | standards | regulation

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