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Mood Around Gambling in the U.K. Has "Worsened" With 15% Point of Consumption Tax

Mood Around Gambling in the U.K. Has "Worsened" With 15% Point of Consumption Tax 0001

During the past few months, Gibraltar Betting and Gaming Association (GBGA) CEO Peter Howitt has catapulted into a person of importance in the online gaming industry, especially as it pertains to the United Kingdom.

The new 15 percent Point of Consumption (POC) tax for online gaming operators mandated by the UK Gambling (Licensing and Advertising) Bill began to take effect in the United Kingdom on Dec. 1.

The gaming bill became an action after being passed by the House of Lords in March 2014 and received its Royal Assent in May 2014.

The delay in the act commencing enforcement was primarily due to Howitt and the GBGA challenging the bill in higher courts primarily on the claim that the new gaming regime provides UK operators a competitive advantage over foreign operators and that it fails to protect consumers.

Howitt was recently interviewed by eGaming Review about the new gaming bill and its potential effect on the gaming marketplace.

When asked how the bill may affect operators based in Gibralter, Howitt responded, "We are seeing a bit of consolidation in the gambling hub space in terms of jurisdictions and I think Gibraltar is going to do well as there are factors here that don’t apply in others jurisdictions. There’s a large service sector with more than 3,000 highly skilled people working in the online gambling sector and that puts you in a good position when you are trying to encourage new businesses to come to Gibraltar."

"The other main thing is that Gibraltar is still very supportive of the regulated sector and I think perhaps the way the UK has gone about recent changes to regulation and tax has destabilized the confidence in the UK for some operators. So if you are thinking about where you are investing as a business you want to invest in a place that will invest in you – and many operators aren’t getting that feeling from UK."

The GBGA was recently granted permission to challenge the tax again in 2015. Howitt was cautious when asked if the challenge will be successful this time around: "I think we have a good case to make but I’m always hesitant to say we are confident in litigation, especially when you are challenging a sovereign state on an area of taxation. The litigation has a lot of elements that make success politically difficult but the Association believes there are some key issues that need to be addressed."

Howitt was also asked his opinion on the outlook of the UK gaming marketplace: "Clearly the mood around gambling in the UK has worsened and that means the sector should work harder to get some key messages out and re-establish dialogue with the relevant authorities and politicians in the UK but of course it has to be a concern when high street and online gambling features high up on the political agenda.

"The danger is the discussion becomes all about winning votes rather than sensible policy but on the other side, the industry has to listen to genuine concerns raised about it. It can’t simply complain about the regulatory landscape and we as an Association are certainly going to do more to help influence the agenda and be and be seen as a responsible stakeholder."

Dutch Gaming Regulator in Hot Water

In other news, Dutch gaming regulator Kansspelautoriteit (KSA) was recently accused of impropriety according to eGaming Review. Earlier this month, the KSA invited to pre-apply for Dutch gaming licenses on the regulators website in preparation for the new gaming bill expected to be passed.

Secretary of state Fred Teevan was recently grilled by members of opposition parties Segers Christian Union, Oskam and Kooiman about why the pre-application was opened by the KSA when the bill has not yet been passed, and isn't expected to take effect until the second quarter of 2015 at the earliest.

The accusations have not gone unnoticed by gaming operators. William Hill reacted by demanding that all affiliate partners temporarily cease activity in the Netherlands.

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