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Fight against new gaming tax begins

The Gibraltar Betting and Gaming Association has mounted an official legal challenge against the incoming Point of Consumption (PoC) tax.
August 29, 2014

The first steps to fight the introduction of a new gaming licenses and a 15 per cent gaming duty were taken last week. The Gibraltar Betting and Gaming Association (GBGA) has filed a legal challenge against the law which aims to introduce a new gambling licensing regime and a brand new 'Point of Consumption' (PoC) tax in the UK. The new regime will target offshore and overseas-based gambling companies which generate a chunk of their revenues from online customers in the UK.
As soon as October, foreign companies will be required to obtain a licence from the UK Gambling Commission to offer their services in Britain.The new tax, due for enforcement in December, will tax all revenues generated in the UK by 15 per cent - effectively taxing the gambler rather than the company - making it harder for offshore companies to avoid the costs associated with such levies.

According to the British government, the intent of the new law is to protect consumers and force gambling companies to operate more responsibly. But the GBGA said the law would cause players more harm. It claims the absence of "effective supervision and enforcement" as well as "burdensome regulatory requirements" will encourage the growth of, and migration to, "unregulated or poorly regulated operators" which will present "genuine risks" to the British consumer.

What’s more, the GBGA’s chief executive Peter Howitt believes the new regime is designed purely for "economic reasons": to grant UK-based operators a competitive advantage over those from overseas. It’s this objective, the GBGA’s counsel argues, which makes the new tax illegitimate and unlawful. Furthermore, the GBGA has accused Britain’s Gambling Commission of persuading the UK government it should be the global regulator of the gambling sector, an industry the GBGA warns is "highly technical and complex".

The GBGA first announced its intention to fight the new tax in March. But not every gaming operator within the GBGA is against the new regime. While 20 of its members are supposedly taking up arms, high street bookie William Hill (WMH) has distanced itself from the challenge. Others, like 888 (888), have said they will join the fight but admit it wouldn’t be a catastrophe if the new law came into being.

Analysts at broking house Numis agree with the GBGA. The most compelling argument, they believe, is the lack of protection for consumers. Numis predicts the GBGA’s challenge will succeed via an expedited hearing, and the new law will not be introduced on time or as planned.