Changes to British egaming laws: rules OK?

BRITAIN’S Department of Culture, Media and Sport (DCMS) this month published a consultation on the Regulatory Future of Remote Gambling in Great Britain.

The report suggests that the current system may need change because the Gambling Commission is regulating increasingly fewer remote gambling operators (as they relocate to territories with lower tax rates), and it wants to ensure that British punters receive the same level of protection regardless of where operators are established.

Under the proposals, operators based in European Economic Area (EEA) member states, Gibraltar and other White List jurisdictions will need a Gambling Commission licence to (a) transact with and/or advertise to British consumers, and/or (b) locate their remote gambling equipment in Britain.

DCMS concluded that this was the best option because it will ensure that standards are consistent and enable cost recovery. Licence fees may increase given the additional administrative work that regulating operators located wholly overseas may entail for the Gambling Commission.

DCMS “discounted “¦ at an early stage” either extending the White List system to operators in EEA member states and Gibraltar or closing off the British gambling market completely (the approach adopted in Italy and likely soon to be adopted in France).

DCMS considers that these options would be ‘disproportionate’ and ‘discriminatory’ notwithstanding the Bwin v Santa Casa judgment which many countries now rely on to justify the introduction of national licensing systems.

Under the proposals it will be an offence to provide or advertise remote gambling services in Britain without a licence.

The Gambling Commission and police will be able to prosecute those who commit this offence, but without extra-territorial powers it is questionable how much of a deterrent this will be.

DCMS discounted the option of introducing ISP blocking or financial transaction blocking measures (as in other EU Member States) but does not rule out introducing such measures in the future.

The original intention for these proposals was to “level the playing field” between British gambling operators and their overseas competitors.

However, this Consultation does not address the real issue ““ the level of UK tax rates ““ and until the Government does, these proposals will have little or no impact on the shrinking British-based remote gambling sector.

The general election will be held during the consultation period (which runs until 18 June) and it is unclear whether a new administration will enact these proposals or whether they will be abandoned without further discussion.

If the proposals are adopted a new administration could potentially go even further and use the new regime as a Trojan horse, forcing licensed remote gambling operators to become established and pay taxes in the UK.