Licensing of Online Gambling Operators to Protect UK Players?

Online GamblingDCMS Secretary Insists Proposed Licensing of Online Gambling Operators is to Protect UK Players

The Permanent Secretary of UK’s Department of Culture, Media and Sport (DCMS), Mr. Jonathan Stephens, submitted supplementary evidence to support the proposed bill as one that is intended to protect UK consumers and not to raise tax revenues as alleged by the regulatory bodies of Gibraltar and Malta.

UK is currently under fire for the proposed Place of Consumption (POC) Tax, a gambling tax projected in conjunction with the bill proposed by DCMS. The bill seeks to amend the prevailing Gambling Act of 2005, by requiring all online gambling operators to secure a UK license in connection with the online gaming and betting facilities offered to UK residents.

Regulators in Gibraltar and Malta sees DCMS’ proposed bill as a violation of the  EU treaty, which does not allow member states to create a regulatory system for the purpose of raising taxes, but instead must be founded on justifications that the proposed regulation aims to combat the risks of unlicensed gambling operations. In fact, Gibraltar’s Gambling Commissioner offers as evidence a previous statement  of the UK Gambling Commission which states that the “harms associated with remote gambling in UK, is very low.”

Currently, most UK online gambling operators hold a license to operate as gambling service providers, issued by other governments, such as Gibraltar, Malta, Isle of Man and Alderney. However, this enabled the gaming companies to avoid the 15 percent tax on profits imposed on UK licensed operators like Bet 365. Under the proposed licensing requirement UK operators will have to pay gaming taxes based on all collections received from UK players.

To date, Gibraltar Betting and Gaming Association raised as much as £500k, which the association will use to contest the new law, once introduced sometime in 2014.

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Mark Whysall

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