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BUSINESS 28
£5.20 (€8.30) • ISSUE:83 • AUGUST 2011 •
www.betting-business.co.uk
UK may tax remote industry on customer location
As expected, the UK government has announced it wants to bring remote operators under the remit of the Gambling Commission.
REGULATION T
The UK government is to tweak its online gambling laws in order to regulate the remote industry on a
point of consumption basis. Min- ister for gambling John Penrose announced the long awaited changes last month to an unsur- prised gambling industry. Penrose wants all operators selling into the British market, whether domestic or foreign, to hold a Gambling Commission licence before they can adver- tise or transact with UK citizens. He commented: “It is unfair to GB-licensed gambling opera- tors that overseas competitors benefit from access to the market in Great Britain without bearing a fair share of the costs of regulation, or of research, education and treatment of problem gambling.”
This decision will be of great news to the land-based industry, which feels it has disproportion-
ately had to fund the GREaT Foundation, Gambling Commis- sion and horseracing through the Levy Scheme while its online competition avoided the over- heads.
Importantly, the changes also have the support of the Treas- ury. Economic secretary Justine Greening commented: “I will review the case for changing the taxation regime in line with John Penrose’s proposal and taxing operators on the basis of cus- tomer location. Separately, other countries are also chang- ing both their regulatory and taxation regimes for remote gambling. I will consider the tax implications of these develop- ments. In particular, I will con- sider ways to prevent operators in the UK being subject to double taxation on remote gambling in the shorter term.”
Remote Gambling Associa- tion chief executive Clive Hawkswood commented that
his members already adhere to high regulatory standards: “Reg- ulation by the Gambling Com- mission therefore holds no fears for our members, but a signifi- cantly higher tax burden that could lead to a reduction in value and choice for consumers cer- tainly does. It is therefore clearly crucial that any new regulatory regime is complemented by a fair and sustainable fiscal regime.”
Far from being the leading remote gambling jurisdiction envisaged by Tessa Jowell, the UK is now following the lead of Italy and France in demanding local regulation, which throws its white label scheme, now sus- pended from new entrants, into some disarray.
Penrose said: “As I intend to allow operators anywhere in the world to apply for a Gambling Commission licence, my pro- posals will mean that the white list will be phased out, although
the Gambling Commission will ensure that regulatory good practice is recognised so that overseas based businesses in trusted jurisdictions such as the white listed countries, will have much lighter touch approach and, for example, will not have to duplicate regulatory work.” Isle of Man’s minister Allan Bell commented: “Under the automatic transitional licence Isle of Man based companies will have a streamlined point of entry and significantly reduced administrative costs when they obtain a UK licence.”
Of course, all these changes will require amendment to the Gambling Act in a busy regula- tory schedule for the coalition government, but the involve- ment of the Treasury will increase the likelihood of the DCMS’ changes making the statute books, although it is not expected to happen any time soon.
JUSTINE GREENING: CONSIDERING WAYS TO PREVENT UK
OPERATORS FROM DOUBLE TAXATION
Full Tilt POKER
investment T
desperate for
he future of poker operator Full Tilt looks bleak as it desperately looks for new investment while having
its European operating licences from Alderney and France under suspen- sion. The company is thought to be in talks with a set of European investors, however, these discussions are com- plicated by the fact that any potential buyer would not want to touch Full Tilt’s liabilities in the US, where players are still waiting for the opportunity to remove their funds following the Department of Justice actions on Black Friday.
The Alderney Gambling Control Commission (AGCC) cut short a public hearing on the future of Full Tilt Poker licences in London on 26 July in favour of a private hearing ‘before 15 Septem- ber’ notionally in order to allow Full Tilt to attract a buyer. In a statement, the AGCC said: “As a result of the argu- ments on behalf of FTP during the pre- hearing application the Commissioners decided to adjourn the hearing as they felt it was in the best interests of FTP’s customers. A key consideration in their decision was to allow FTP licensees ‘to further pursue advanced commercial negotia- tions which could lead to a more bene- ficial outcome for player interests’.” Given that Full Tilt is the world’s second biggest poker site, there should be some interest in the company – however, it has lost a great amount of credibility after Black Friday, espe- cially given the efficient way that its main rival PokerStars refunded is US players, and with zero cash flow while its licences are suspended the future of the company does not look rosy.
POKER FRENZY Page 4
www.spinpalace.com www.microgaming.com/GSSII
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