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UK Government attempts to level playing field with new remote gambling law

11th December 2012 / lee
William Hill

The rules could soon be changing for foreign operators running online gaming operations in the UK. The British Government have issued a new proposal that will mean that companies from around the world will have to obtain a licence from the UK Gambling Commission in order to not only transact with British players, but also to advertise in Britain as well. This is just a draft new piece of Legislation, the Gambling (Licensing and Advertising) Bill, which has been published by the Department for Culture, Media and Sports. The aim is to issue sterner regulations for remote gaming operators from around the world, in order to make them more accountable for their operations in Britain.

This is a serious change up, because the UK Government want to change the regulatory rules to focus on where bets are placed, the so called ‘point of consumption’ which has hitherto been ignored. Only companies with land operations have had to deal with UK regulations. Earlier in the year, when proposed plans by the British Government to update remote gambling laws were announced, Britain’s largest betting site William Hill commissioned a study saying that gamblers could turn to unregulated markets, if plans were pushed ahead to tax betting operators on a POC basis.

“These proposals are an important measure to help address concerns about problem gambling and to bridge a regulatory gap, by ensuring that British consumers will enjoy consistent standards of protection, no matter which online gambling site they visit,” said Hugh Robertson, Minister for sport and tourism.

“For example,” he continued “previous work by the Gambling Commission has highlighted deficiencies in some remote operators’ arrangements for preventing underage play, and, for the first time, overseas operators will be required to inform the UK regulator about suspicious betting patterns to help fight illegal activity and corruption in sports betting.”

“These reforms will ensure consistency and a level playing field as all overseas operators will be subject to the same regulatory standards and requirements as British-based operators,” he added.

Operators now accepting British bets will have a responsibility of reporting any suspicious betting patterns back to the UK Gambling Commission, and of course, have to pay the costs of tracking such gambling issues as well as the new regulations. But “White-listed” countries apparently, according to the British Government, won’t face significant extra costs as a result of the plans. Plans which are designed to help and protect British consumers. “Operators in well-regulated jurisdictions whose regulators can provide, for example, the necessary compliance information, will not face significant increases in licensing costs,” said Robertson “those whose regulators cannot provide such information will need to pay the compliance costs associated with being subject to the same requirements as other Gambling Commission licensees.”

As it stands for operators outside of the UK targeting British players, the foreign companies have to be licensed in a “white-listed” jurisdiction, meaning that as long as a company is regulated and licensed by a state approved by the UK Gambling Commission, it is alright for them to trade in Britain without having land based operations. The Gambling Commission treats any licences issued by “White-listed” jurisdictions as having been issued within the UK. However, a licence is not actually legally required for offshore operators to take bets from UK consumers.

Hugh Robertson continued saying that “All operators selling into the British market, whether based here or abroad, will be required to hold a Gambling Commission licence to enable them to transact with British consumers and to advertise in Great Britain”. The new regulations would simply mean that all operators would have to adhere to UK gambling and pay license fees. UK based betting operators have to pay a 15% tax on gross profits on bets, something which has already prompted major players like Ladbrokes and William Hill to move their operations abroad. This is because they don’t currently have to pay tax on profits earned that way. It is also way to avoid paying the levy on gross profits taken from horse racing as well.

Philip Graf, chairman of the Gambling Commission, said: “We welcome the proposed changes as currently we regulate less than 20% of online gambling by British consumers and cannot insist on overseas operators providing us with information about suspicious sports betting transactions.”

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