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Gibraltar Challenges UK Gambling Act In Court

Gibraltar Challenges UK Gambling Act In Court

Added: August 20, 2014

A large number of online casinos and other online gambling sites are licensed and regulated in Gibraltar. The Gambling (Licensing and Advertising) Act 2014 of the United Kingdom has created a problem for these Gibraltar licensed online casinos because its point of consumption tax imposes a double taxation burden on them. The trade body representing the interests of these remote gambling operators, the Gibraltar Betting and Gaming Association (GBGA), has been trying over the past eighteen months to get the United Kingdom to reconsider. Because there has been no favorable response, the GBGA has filed a legal challenge against the new UK Act with the objective of initiating a Judicial Review from England’s High Court.

The GBGA claims that the new UK Act along with the policies of the UK Gambling Commission is unlawful on several counts. It is an illegitimate, disproportionate and discriminatory impediment to the right to free movement of services guaranteed by Article 56 of the Treaty on the Functioning of the European Union (TFEU). The Act gives British online gambling operators the competitive advantage over offshore operators like those from Gibraltar.

The GBGA also claims that the new UK Act will compromise the safety of players in that country. The UK Gambling Commission does not have the resources, the legal powers, or the skills to be the global regulator of this high tech and complex industry. Finally the GBGA avers that the new legislation is motivated by the need for the UK government to generate more tax revenue. Because of the absence of effective supervision and enforcement and the higher cost imposed by the new legislation, there will be a proliferation of unregulated online gambling operators that will present genuine risks to the British consumer.

In its talks with the UK authorities the GBGA had suggested a system based on cooperation between the UK Gambling Commission and overseas regulators. Such a system would have been less burdensome to legitimate operators because they would not have to duplicate everything. It also would have been more effective in protecting consumers. However, this was rejected by the UK authorities. Peter Howitt, chief executive of the GBGA said, “It is extremely disappointing that our concerns have not been listened to by the UK Government, and that the Gambling Commission's plans to expand its remit have been accepted.” He added that this was not good for consumers and for international competition. The GBGA was determined to fight against the new UK legislation till the end.