The British government has caused major disagreement within the European online gambling industry by introducing its Gambling and Licensing Act. The new legislation will have a profound effect on internet casino operators who have previously been able to open their online casinos to players within the United Kingdom without paying any tax there. This came to an end on the 1st of November when the Gambling and Licensing Act came into effect. The government now requires all online casino operators to be licensed in Britain if they wish to offer their services to players within the United Kingdom. Remote gambling operators who wish to advertise their services must also hold a new British licence. Prior to the passing of this Act, internet casino companies holding licences from jurisdictions accepted by the British Gambling commission, said to be on a “White list” of acceptable licences, could operate legally but now these jurisdictions need to follow the new rules.
Opposition to the Act from Gibraltar
The United Kingdom Gambling (Licensing and Advertising) Act 2014 was due to come into effect on the 1st of October but because of a court case against its introduction, the date was changed to the 1st of November. The British authorities stated that the judge in the High Court challenge to the act needed more time to come to his decision. The Gibraltar Betting and Gaming Association, which speaks for several online gambling companies operating in the United Kingdom, challenged the Gambling and Licensing Act in court. The Gibraltar Association claimed that the Act which imposes a new obligatory British gambling licence on any operators wishing to offer online casino services to players in the United Kingdom is not in the interest of consumers. They indicated that rather than protect players who would most likely face increased costs to gamble, the new legislation would give British based internet casino operators an unfair advantage over those based overseas. This would also mean that all operators would be liable for a 15 per cent tax on gambling income. Opposition was also made to the point of consumption tax because increased costs may turn players towards unlicensed online casinos. The Gibraltar Betting and Gaming Association also claimed that the Act went against the European Union laws governing the free movement of services between European Union member states.
Point of Consumption Tax in December
The Judge dealing with the case declared that the Gambling and Licensing Act didn’t contravene any legislation and that there were “no errors or flaws in that logic or in the procedures which led to the adoption of the final policy conclusion”. He also ruled that the act didn’t breach European Union regulations on the movement of services. The Gibraltar Betting and Gaming association is now seeking a judicial review into the point of consumption tax that is due to be placed at 15 percent on online gambling activities from the 1st of December.