NEWS > ANALYSIS
GAMBLING ON POINT
OF CONSUMPTION
> With implementation of the new Gambling Bill
>
only six months away, Gerard Starkey looks at some
of the issues surrounding the new regime including
the treatment of free bets and bonuses
T
he implementation of the UK Gambling
(Licensing & Advertising) Bill edged a
little closer this month after the somewhat
controversial Bill reached the committee stage in the
House of Commons.
New sports minister Helen Grant has been handed
responsibility for guiding the Bill safely through the
Commons and the House of Lords in time for a 1 May
2014 start date after replacing Hugh Robertson in
October’s cabinet reshuffle.
The Bill will effectively see the UK fall under a point
of consumption (PoC) regime, requiring all operators
wishing to take bets from UK customers and advertise
their services in the country to obtain a licence from a
soon-to-be beefed-up Gambling Commission.
According to the Department for Culture, Media
and Sport (DCMS), the government office responsible
for the gambling industry, the changes are being made
to strengthen protections for British-based customers
and to allow operators to compete on an equal footing.
This is not a view shared by all. Conservative MP
Philip Davies describes the introduction of a PoC tax as
a move to “fill the Treasury’s coffers”. “This is not about
regulation, it’s about taxation,” Davies said during the
Bill’s second reading.
Regulation not taxation
This allegation is, of course, roundly dismissed by
government officials who, in welcoming the additional
revenue to be generated by introduction of a PoC tax,
insist it is only a consequence of measures aimed at
shielding consumers. Furthermore, the DCMS argues
decisions relating to tax are wholly separate to the Bill
and are for the consideration of the Treasury only.
“The Commission has made it abundantly clear
that the Bill is about consumer protection not
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taxation,” John Hagan, partner at law firm Harris
Hagan says. “I do tend to agree with the Commission,
however, that it cannot fulfil its statutory role as an
adviser to government when it only regulates 15% of
the remote gambling market and UK consumers are
indeed exposed to varying standards of regulation
across Europe. That said, there is no doubt the Bill
wouldn’t be going through Parliament as speedily as it
is right now with cross-party support if it were not for
the potential tax revenues,” he adds.
It’s clear the regulation provided by the Bill and
the level of taxation to be decided by the Treasury go
hand in hand, certainly in the eyes of those within the
industry. If the DCMS is to achieve what it has set out
to and improve protection for consumers, a workable
rate of tax is imperative.
Should all go to plan, the PoC tax, which is currently
proposed at a rate of 15% of gross gaming revenue, is
due to come into force six months after the Bill's start
date. This leaves operators with relatively little time
left to prepare for what is expected to be a seismic
change within the industry.
Free bets
With the Bill still at an early stage of the Parliamentary
process, the opportunity for lobbying from industry
bodies and operators remains. One issue the Remote
Gambling Association (RGA) continues to press
Treasury officials on is the treatment of free bets and
bonuses for taxation purposes.
In the government’s recent consul FF