UK Gambling Commission issues grey market clarification
Regulator responds to "much discussion" on topic and confirms 3% rule only applies to B2C businesses and targets "reckless flouting of laws"
The UK Gambling Commission has written to interested parties to explain the reasons behind its requirement for grey market revenue declarations from operators looking to obtain a UK licence, eGaming Review has learned.
Earlier this week, eGaming Review revealed that as part of the upcoming UK licensing process, operators would have to detail international revenues streams and prove the legality of jurisdictions which contribute more than 3% of total revenue.
Responding to “much discussion” raised by issue, the Commission said in an email seen by eGR it was concerned about possible implications of a potential licensee’s likelihood of responsible behaviour if they have previously been “knowingly or recklessly flouting the laws of another jurisdiction”.
The regulator also raised the issue of finance, whereby it was concerned that revenue from operators’ grey market business could disappear if countries were to “change their approach overnight”.
“We will be asking B2C businesses to explain to us for each market why they think provision of gambling facilities is not illegal either because they are licensed to operate in that jurisdiction or because they have satisfied themselves that is not illegal for them to provide gambling facilities to those players,” the Commission said.
The email also made clear that in jurisdictions where a case could be made for and against legal means, it only sought for operators to prove that it believed it was acting legally. As such, legal opinion would prove sufficient as it would display a level of probity and responsible behaviour.
“The key for us is whether the operator is behaving responsibly and has a reasonably coherent arguable rationale for what they are doing “ and is not hiding behind wilful ignorance or totally implausible assumptions or arguments,” it said.
The body also confirmed that operators with total revenue of less than £5m per year would not have to declare grey market revenue unless it was more than 10% of that figure.
“On reflection we realised that 3% of the smaller B2C operators was an unnecessarily demanding requirement,” the Commission said.
The regulator is to consider recent response before issuing further guidance on the matter in the coming weeks.