GBGA unlikely to mount separate PoC tax challenge

The Gibraltar Betting and Gaming Association (GBGA) says it remains “entirely focused” on its judicial review of Great Britain’s new licensing framework amid reports the industry body is preparing a fresh legal challenge to its associated Point of Consumption (PoC) tax regime.

Last month London’s Royal Courts of Justice heard the GBGA’s case against the government’s new regulatory regime, which has so far seen the implementation of the framework delayed until 1 November in order to give the judge sufficient time to reach a final decision on the legality of the policy.

And it has since emerged that ahead of the court case the GBGA had sent a letter before action (LBA) to the UK Treasury in relation to its planned introduction of a 15% PoC tax from 1 December, raising the prospect of an additional legal challenge.

However, eGR understands the chances of separate legal action against the tax are remote.

According to sources, the LBA was sent as part of a GBGA strategy to increase the chances of the licensing regime being be delayed while a final judgment was pending – a tactic said to be regularly used in cases of litigation.

Although the GBGA declined to comment specifically on the LBA, a spokesperson for the association said it remained “entirely focused on the judicial review that has already been heard”.

“We await the decision as to whether the licensing regime is judged to be legal under European law or illegal due to the adverse impact it will have on consumer protection in Great Britain,” the spokesperson added.

Should Lord Justice Green rule in favour of the GBGA, a shadow would be cast over the government’s ability to levy the tax from December.

In a recent guidance note, the HMRC said operators not yet registered to pay gambling tax in the UK but held a Gambling Commission licence, or were required to do so under the new licensing regime, must register through its online system.

However the HMRC recognised some businesses applying for the tax may not hold a British licence.

Failure to register or pay the tax could result in fines or the revocation of licences but, with no accompanying licensing regime, the government could find it difficult to implement such enforcement measures under its current guise.

The government has, however, kept the two pieces of legislation entirely separate with the tests of “British consumer” for licensing purposes and “usually lives in the UK” for taxation also distinct from one another.

The tax, which would see offshore operators hit with a levy on profits derived from customers that reside in the UK, is expected to contribute around £300m per year in tax receipts and bring overseas operators in line with their British-based rivals.