Q&A: Peter Howitt, GBGA chief executive

Over the past two years Peter Howitt has become a prominent figure within the online gaming industry due to his role as chief executive officer at the Gibraltar Betting and Gaming Association (GBGA).

Howitt and the GBGA have been leading the fight against the UK government’s changes to its regulatory and tax frameworks, which were recently switched to Point of Consumption models, affecting a large majority of the GBGA membership.

With the new 15% profit tax going live last week, eGaming Review caught up with Howitt to talk about how the changes might affect Gibraltar-based businesses and discuss the GBGA’s legal challenge of the tax, which was recently granted a judicial review by the courts.

eGaming Review (eGR):What kind of impact will the UK PoC tax have on Gibraltar and its status as a key egaming hub?

Peter Howitt (PH): We are seeing a bit of consolidation in the gambling hub space in terms of jurisdictions and I think Gibraltar is going to do well as there are factors here that don’t apply in others jurisdictions. There’s a large service sector with more than 3,000 highly skilled people working in the online gambling sector and that puts you in a good position when you are trying to encourage new businesses to come to Gibraltar.

The other main thing is that Gibraltar is still very supportive of the regulated sector and I think perhaps the way the UK has gone about recent changes to regulation and tax has destabilised the confidence in the UK for some operators. So if you are thinking about where you are investing as a business you want to invest in a place that will invest in you – and many operators aren’t getting that feeling from UK.

eGR: The GBGA has said it plans to challenge the tax in the courts – what’s the latest here?

PH: The GBGA is pleased to report that permission has now been granted to bring the tax claim. Mrs Justice McGowan stated that “the application raises very significant points of principle and practical issues for the enforcement of revenue collection” and recognised that the case was not suitable to be heard by a Deputy High Court Judge.

The next stage in the process will be a directions appointment to be held prior to the Christmas break at which the timetable and process for the substantive hearing will be set. It is likely that the substantive hearing will not take place before the early part of 2015.

eGR: Are you confident your legal challenge will succeed where the regulatory challenge failed?

PH: I think we have a good case to make but I’m always hesitant to say we are confident in litigation, especially when you are challenging a sovereign state on an area of taxation. The litigation has a lot of elements that make success politically difficult but the Association believes there are some key issues that need to be addressed.

eGR: Does the challenge have the full backing of the GBGA members?

PH: The challenge has support within the Association but it doesn’t mean all the operators necessarily hold the same view – it’s not unanimous but we have enough support across the board to go ahead with the challenge.

Litigation is the result of a failure to consult and discuss and come to a solution that makes sense for the regulated sector and the UK – so it’s a consequence of a breakdown in communications. The desire was, still is, and always has been to have a good relationship with the UK authorities because it’s a key market for Gibraltar and Gibraltar is a key supplier jurisdiction for the UK, so litigation is not something we do lightly.

eGR: The new UK regulatory regime has been live for just over a month now. Have your concerns regarding the framework been realised?

PH: It’s still too early to say. In terms of the impact, the main point we made to the UK authorities was that through a combination of poorly constructed new tax and regulation there would be an increase in unlicensed and untaxed suppliers from outside of the EU but it will still take some time to see how much this will be the case and the damage this will cause to UK consumers.

In terms of licensing, there is still a large amount of uncertainty regarding how it will be implemented and policed by the Gambling Commission and it’s no surprise to us to hear that the sector still isn’t confident that the UK is up to speed yet. The GBGA is calling on the regulator to issue clear guidance in key areas of uncertainty now the litigation on licensing has passed. We look forward to establishing a practical working relationship with the Gambling Commission.

eGR: Increased regulation of the UK market looks likely in the years to come, particularly around marketing and advertising. What’s the GBGA’s view of this?

PH: Clearly the mood around gambling in the UK has worsened and that means the sector should work harder to get some key messages out and re-establish dialogue with the relevant authorities and politicians in the UK but of course it has to be a concern when high street and online gambling features high up on the political agenda.

The danger is the discussion becomes all about winning votes rather than sensible policy but on the other side, the industry has to listen to genuine concerns raised about it. It can’t simply complain about the regulatory landscape and we as an Association are certainly going to do more to help influence the agenda and be and be seen as a responsible stakeholder.