Draft Gambling (Licencing and Advertising) Bill moves closer to becoming law

DCMS Select Committee agrees that all firms offering remote gaming activities to UK consumers should be licensed in the UK

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On 1st May, the Select Committee scrutinising the draft gambling bill published their report. Although they made some recommendations for amendments to the bill, they supported the principle that gambling should be regulated on a ‘point of consumption’ basis. Under the current draft bill, if a remote gambling operator wants to avoid having to obtain a licence in the UK, they would need to ensure that their services were blocked to customers in this country.

Although arguments had been made that the bill was primarily being introduced to increase tax revenue and was therefore in breach of EU law, the Select Committee did not agree that this was the primary motivator.

It agreed with the Gambling Commission that the existing system did not adequately protect consumers and that there were weaknesses in transparency, consistency and the provision of information. Specific evidence was provided to support this, including consumer protection issues and suspicious activity reporting trends.

The potential increase in tax revenue was seen as a consequence of the legislation only. In fact, the report goes as far as to state that “we regard it as a legitimate and desirable outcome of the change in the licensing regime that in future remote gambling companies doing business in the UK should be subject to the same taxation requirements, whether they are based onshore or offshore.”

Other industry representatives who did not oppose the principle of the Bill, did express concerns that the impact may be to increase costs for licensed operators, allowing ‘black’ and ‘grey’ betting markets to undercut those who complied. The Select Committee recommended that the Treasury should bear this in mind when setting the rate of tax.