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London's Royal Courts of Justice Rule Against the GBGA's Legal Challenge

London's Royal Courts of Justice Rule Against the GBGA's Legal Challenge 0001

London’s Royal Courts of Justice has ruled against the Gibraltar Betting and Gaming Association (GBGA) legal challenge to the United Kingdom's newly passed Gambling (Licensing and Advertising) Act.

On Friday, Lord Justice Green handed down a judgment supporting the United Kingdom Gambling Commission's impending introduction of the gaming law's new licensing system, a 15 percent point of consumption tax for gaming operators and new regulatory framework.

Lord Justice Green does not believe that the GBGA had a strong enough case to overturn the new law. "In relation to the issues arising I have concluded that the claimant has not established that the new regime is unlawful under EU or domestic law," he said.

The GBGA's claim that the POC would also create a grey market of illegal operators was also rejected by Lord Justice Green."Further, I reject the submission that the new regime will create perverse incentives and lead to the creation of an illicit market of unscrupulous service providers."

The GBGA also failed to convince Lord Justice Green that a passporting proposal would be an acceptable and less onerous solution. Said Green, "I also reject the submission that the passporting proposal would meet the legitimate objectives of Parliament or prove effective or achievable without significant bureaucracy and extra cost."

The GBGA was understandably disappointed by the decision by the Royal Courts of Justice. According to eGaming Review, a GBGA spokesperson expressed, "We maintain this law is not in the best interests of consumers, the industry and the regulator itself and that there are more effective ways of dealing with the challenges of regulation and competition in this sector."

The spokesperson continued by addressing the difficulties of policing the grey market: "We remain concerned the UK regulator will find it difficult to hold companies to account in jurisdictions outside of the EU where it has no legal powers and common legal framework or culture."

The GBGA also is now calling for a centralized legal framework for online gambling: "Given this judgment there is now even greater need for an EU legal framework for online gambling if we are to effectively protect all European consumers, enjoy a common market and avoid each Member State deciding alone how to deal with an activity that naturally crosses borders."

No appeal has been filed as of yet by the GBGA, and according to a spokesperson for the Department for Culture Media and Sport, the Gambling (Licensing and Advertising) Act should be enforced on Nov. 1 throughout the country.

Impact of the Gambling (Licensing and Advertising) Act to Operators and Players

The most major change in the UK's new gaming bill is the 15 percent point of consumption tax. This will make it impossible for certain gaming sites to make a profit, especially if they are taxed in another jurisdiction such as dot-fr sites or if there isn't enough liquidity to generate enough gross profit to cover the company's fixed costs of operations. We have already seen gaming operators, such as, discontinue poker services to the UK market.

With this will come less competition for the gaming companies that remain, which could result in an increased market share. However, it may not come along with increased profits due to the UK government taking its piece of the pie.

UK gaming operators will also have increased marketing and social responsibility controls, and while that will add extra costs to the bottom line, it also provide some assistance to the country's problem gamblers.

While most major online poker sites will continue to operate in the UK, the country's players will have less gaming sites to choose between and a potential reduction of VIP benefits to help companies recover some of the tax hit.

Stay tuned to PokerNews for more news as it happens in the United Kingdom gaming marketplace.

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