The Gibraltar Betting and Gaming Association (GBGA) has followed through with its promise and filed a legal challenge against the United Kingdom Gambling Commission's impending introduction of its new licensing system and a 15 percent point of consumption tax for gaming operators.
This news comes as little surprise as we reported in March that the GBGA and its more than 20 members announced their intention to fight the pending Gambling (Licensing and Advertising) Act in the higher courts when this new consumption tax was initially proposed.
It is claimed that the new regime was designed to grant UK operators a competitive advantage over foreign operators and to protect consumers.
"When introducing the new licensing regime, the defendants rejected the option of a 'passporting' regime," the GBGA wrote. "This would have been both less onerous to legitimate operators and more effective in protecting consumers, since it would have been based on effective supervision and cooperation between the GC and overseas regulators."
The GBGA believes this regime was designed purely for economic reasons. GBGA Chief Executive Peter Howitt explained in a statement released on Monday, "The only beneficiaries of this change are the UK domestic industry and the Gambling Commission itself, which has persuaded the UK government that it should be the global regulator of this high tech and complex industry."
The legal challenge may have some backbone. The GBGA claims that this regime impedes the right to free movement of services as outlined by Article 56 of the Treaty of the Functioning of the European Union.
Howitt strongly believes this proposed regime will have the opposite effect the bill was supposedly designed for, as the fact "that the Gambling Commission believes it is better placed to regulate the industry here is laughable. We are determined to fight against measures that actually undermine consumer protection."
Descent within the GBGA ranks?
Not every gaming operator within the GBGA is fighting against the new regime. Most notably, William Hill has distanced itself from the GBGA’s challenge against the UK Gaming Commission's proposal.
William Hill's Chief Executive James Henderson recently commented about the challenge that he "just didn't feel it was appropriate" to participate in GBGA's legal battle, primarily due to the company working closely with the UK government.
While it is believed 888 will join in on the fight against this new regime, the company also does not believe it is all doom and gloom if the UK Gaming Commission wins this legal battle.
888 Holdings CEO Brian Mattingley stated in the Market Overview section of the 2013 company's financial reports, "in more mature markets such as the United Kingdom, we anticipate that there will be further consolidation given the advantages of scale, brand and technology that larger operators can employ in a more competitive environment. This trend will be reinforced by the planned introduction of a Point of Consumption Tax in the UK, due to take effect from December 2014."
Stay tuned to PokerNews for more news as it happens regarding the proposed POC tax in the UK and the GBGA challenge.