The UK government’s intention to impose taxation and secondary licensing on offshore internet gambling operators wishing to access the British market faces some tough opponents.
On Tuesday the Gibraltar Betting and Gaming Association confirmed that it will if necessary launch litigation to prevent the British from implementing their ‘point-of-consumption-based’ plans in December 2014.
The GBGA constitutes a formidable threat, comprising many of the major online gambling groups operating from the tax-friendly Gibraltar jurisdiction.
In its statement the Association appeals to the Department of Culture Media and Sport to call off its plans to introduce the new regime…and it gave notice that it is serious in its intention to fight the bill, advising:
“In the event that the Government determines to proceed with the proposed legislation and fiscal reforms, the GBGA will regrettably have little alternative but to institute judicial review proceedings to challenge these measures.”
The Association has the necessary financial clout to make good on this threat, having raised a GBP 500,000 war chest from its 24 member companies for the fight.
The GBGA characterised the proposed changes as discriminatory and disproportionate, and said they were based on a flawed perception of the competitive threat to British-licensed companies.
The Association also invoked European Union law, saying that the UK changes were both badly timed and “unlawful in terms of EU, national and international law and are liable to successful legal challenge.”
The UK changes could not only be construed as unfair state aid for British companies, but would also have a profound negative impact on the economy of Gibraltar in terms of employment and Gibraltar government taxes, the Association pointed out.
The Gibraltar Regulatory Authority also raised objections to the UK’s intentions; with chief regulator Phill Brear claiming that the proposals contradicted reality, research and the evidence base. Brear noted that over half the online gambling companies that would be affected by the new law were based in Gibraltar.
The DCMS Select Committee hearing conducted in London on Tuesday heard a wide range of evidence from a variety of interested parties and is to report on its conclusions, which are nevertheless not binding on government.