New UK egaming laws: all's well that ends well?
The new egaming regulation mooted by the government today will end the dream conditions experienced by offshore whitelist-domiciled operators facing the UK, says James Hollins, leisure analyst at brokerage Daniel Stewart, but new clarity on the law will do legitimate operators good...
THE UK DEPARTMENT for Culture, Media and Sport (DCMS) has finally released a statement regarding the UK online gambling industry, with respect to a need for looking into extending existing regulation and licensing in order to safeguard UK consumers and generate income for the UK horse racing industry.
At present, offshore, white-list regulated companies “ in other words, virtually all of the major operators facing UK customers – pay zero levy charges on online horse racing bets, pay zero UK tax on wagers and are allowed to advertise freely in Britain. This is a perfect situation for the operators.
However the DCMS has indicated that it is now seeking to implement an extended licensing regime that will enable the Gambling Commission to more effectively control problem gambling and to apply a levy on online horse racing wagers
We seriously doubt whether this can be put in place before the next UK General Election. However, our belief is that the next Government, particularly if it is Conservative, will certainly pursue a tighter control on both online gambling and its relevant taxation.
While the DCMS has stated that it will work with the Treasury on tax aspects, it does not include taxation issues in its initial studies, focusing solely on regulatory issues and the horse racing levy.
We believe that a Conservative Government would take an even more proactive stance and look to ensure that operators taking wagers from UK consumers would pay a fair level of tax and levy for the right to advertise in the UK market.
While this may add additional tax burden to the key UK horse racing betting operators and could extend to online gaming, it is unlikely to be overly punitive, in order that a sensible taxation level can be applied in order to ensure that operators secure licences and that illegal offshore gambling is prohibited.
In practice, this is a difficult situation – crackdowns on illegal offshore operators are very hard to undertake – and we do not expect a full implementation by either a Labour or Conservative Government prior to 2011.
However, the longer term benefits of a fully licensed and regulated market, at the expense of illegal offshore operators, is a preferred situation to the current ‘grey’ areas surrounding most international markets, in which aggressive marketing by illegal operators hampers the normalised progression of the online gambling markets across Europe.
Thoughts? EGR welcomes pitches for blog posts of 250-350 words on topical issues in egaming. Email online editor Jon Parker for details.