Review of the Year: UK regulation
eGR looks at the 10 biggest talking points of 2011.
In July John Penrose, Tourism and Heritage Minister, responsible also for gambling policy and regulation, announced that the government would reform the Gambling Act to require all operators selling services into the UK to obtain a licence from UK regulator the Gambling Commission.
Penrose said the revamped industry would be based on the point of consumption rather than point of supply, however no detail has so far been given on the tax system this would involve, which jurisdictions would be affected or when this would come into force.
Any new licensing system, however would require a change in primary legislation with several commentators suggesting that this could “push full implementation out to 2013 or 2014″.
It is unclear what would come first, however the industry would clearly prefer to see a discussion on levels of taxation prior to implementing regulation.
RGA chief executive Clive Hawkswood has said that his organisation, that represents a large number of powerful egaming firms, is in discussions with the UK Treasury over an accompanying change in the tax system for online operators and that, to date, talks had been “very encouraging”.
The news came too late for some, however with Betfair and Tombola becoming the latest operators to move offshore to Gibraltar. Gala Coral is known to be planning suit next year, and is in the process of applying for licences for Gala Bingo, Gala Casino and Coral Interactive.
Today Bet365 (on its sports bets), William Hill, Ladbrokes and Coral (retail) are among the only operators still paying the full rate of UK tax in the UK. At a parliamentary hearing on UK egaming legislation earlier this year Bet365 co-CEO John Coates admitted that the level of taxation levied by the UK Gambling Commission, coupled with the rates of tax paid by operators in regulated markets, was “unsustainable.”
This puts pressure on the government to develop a viable regulatory framework to avoid losing further revenue and, at a time of heightened economic uncertainty, to avoid losing more UK jobs.
Furthermore, bookmakers and the Horse Race Betting Levy Board are still to agree a long-term compromise on the horse racing levy, only managing to reach an agreement for the 51st annual scheme of £72.4m minutes before the November 1 deadline. Much has been promised on UK regulation, but very little was delivered in 2011.
The key news on UK regulation from 2011:
UK government announces gambling reform plans
Bookmakers broker last-minute horse racing levy deal