GBGA Launches Second Challenge To Controversial UK Gambling Law
The Gibraltar Betting and Gaming Association has launched a secondary challenge to the controversial UK Gambling (Licensing and Advertising) Act, focusing on the point of consumption tax, after having their initial challenge dismissed by the London High Court.
While the first challenge by Gibraltar’s regulator was focused on the Act itself, the new challenge will demand a judicial review of the point of consumption tax which is a tax issue as opposed to a licensing issue and therefore subject to separate legal procedures.
The point of consumption tax, brought forward by the UK Gambling Commission, will introduce a 15 percent duty on all online casinos, online poker rooms and sportsbooks that wish to engage with the British market, all of whom, must also be licensed and regulated in the United Kingdom.
The GBGA will once again make the argument that the new legislation is unlawful, as the new POC tax will breach Article 56 of the Treaty on the Functioning of the European Union. The section of the treaty that pertains to the free movement of trade across borders between EU member states.
“This tax is a restriction on the provisions of services,” said a spokesperson for the GBGA. “There are no equivalent precedents of the UK Government seeking to tax entities abroad in respect of the provision of services in the [United Kingdom] without going through the appropriate route of seeking harmonization through the EU. This is incompatible with Article 56.”
The UK Government has made the assertion that rogue operators are to blame and that the new regime is a way to protect customers. However, the GBGA has said that it will have the opposite effect and drive players in the United Kingdom towards ‘rogue operators’.
“If responsible foreign operators are forced to raise prices (i.e. offer less favorable odds or a high rake), it is inevitable that many customers will move to companies with no regulation and lower overheads. Rogue operators will be beyond [the] reach of the UK law and consumers will face increased risks of fraud, non-payment and abuse.”
The GBGA has also made the argument that its position against the POC tax has been strengthened by the judgment made by the High Court. If any EU member state were to restrict trade and be in breach of Article 56, it would need to have extremely valid reasons for doing so.
While the High Court Judge, Nicholas Green, had rejected the arguments against the new licensing gambling and licensing laws, he did state that the swelling of Government coffers is not a justifiable reason to breach Article 56. This is, the GBGA hopes, the proverbial smoking gun, as the new regime is not, based on statements made by Judge Nicholas Green, a way to protect the customers and therefore is only there to increase revenue, rendering it illegal.
“The fact is that this tax regime has no legitimate purpose,” the GBGA has said.
“Moreover, the tax is discriminatory. European law supports our position. The Government says this tax ensures ‘respect for fiscal sovereignty’ and is essential for the ‘coherence of UK tax authority’. We believe this means their real aim is to ensure that UK operators in this market are favored, at the expense of law-abiding and responsible operators outside of the UK.”
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