UK market will suffer like the rest, says Gibraltar chief
Gibraltar Gambling Commissioner Phill Brear believes the UK PoC regime will face similar problems to Italy and Spain
The UK’s imminent switch to a Point of Consumption (PoC) regime will give “free-reign” to unlicensed operators wishing to lure customers with better value, according to the Gambling Commissioner of Gibraltar.
Phill Brear, who was speaking to eGaming Review following the UK’s confirmation of a 15% of gross profits levy last week, said the country would struggle to control the size of the black market in a similar fashion to countries such as Italy and Spain following the inception of their ring-fenced markets.
Brear, who was previously director of operations at the UK Gambling Commission, says the levy rate will only serve to play into the hands of non-compliant operators unrestricted by the pressure on margins felt by their licensed competitors.
“HMRC has received robust advice on the impact of the duty rate on remote gambling; it is the valuable and the vulnerable customers who are most price-sensitive and who will seek the best value available in a global market,” Brear said.
“The UK is levelling up the compliant and co-operative half of the remote playing field, whilst giving the non-compliant and uncooperative half a free-reign to draw in UK customers with better deals.
“The evidence and consequences of such an approach from the US, France, Italy and Spain have been under-weighed and the same problems will emerge in months and years to come, but it is their choice,” he added.
The remote industry suffered a double blow last week when the UK government also confirmed that the British horse racing levy, which currently only applies to land-based operators, will be extended to all remote operators that profit from the offer of British horse racing.
The result is an estimated £20m hit to remote operators’ coffers and Paddy Power believes the decision will give some operators further reason to operate without a licence.
“The extension of the levy to online operators is a further tax burden on responsible, legal and regulated operators like Paddy Power,” a Paddy Power spokesperson said. “We are concerned it could further incentivise illegal offshore operators to remain so and make the legal sector less competitive.”