Court clears Britain to take tighter control of online gambling
Saturday, 11 October 2014 00:00
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(Reuters) - Britain’s plans to bring licensing and taxation of online gambling companies under UK control got the green light on Friday when a court dismissed a legal challenge to the move.
Bookmakers with big British businesses including William Hill and Ladbrokes have based their online operations offshore in places like Gibraltar in order to take advantage of lower local taxes.
The gambling industry had already been preparing for changes to online taxation expected to cost it around 300 million pounds ($480) per year, but the decision hit shares in bookmakers as the new regime moved a step closer.
Shares in market leader William Hill fell 3.3 percent to 340p by 1110 GMT, while Ladbrokes was more than 4 percent lower at 113.7p.
The government wants to tighten controls on the fast-growing online betting sector by introducing a new law that will require operators to apply for a licence from the UK Gambling Commission in order to offer services to gamblers in Britain.
The licences are linked to a new tax regime due to come into force on Dec. 1, which will force companies to pay a 15 percent tax on online winnings from bets made by customers based in Britain.
The introduction of the licences was delayed for a month from Oct. 1 after the Gibraltar Betting and Gaming Association (GBGA) brought a challenge saying it contravened European law guaranteeing the free movement of services.
A High Court ruling by judge Nicholas Green on Friday dismissed the appeal, as had been expected by most operators within the industry.
“Parliament was clearly within its rights to act as it did,” judge Green said.
The GBGA said it was disappointed with the decision.
“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,” a GBGA statement read.
A GBGA spokesman declined to say if it would appeal. Critics of the new regime say some gamblers will be tempted to bet with unlicensed black market operators offering more attractive odds but no protection against fraud.
As well as the online tax, bookmakers face a tax hike from 20 to 25 percent on lucrative high stakes gambling machines from next March, which will cost them around 75 million pounds a year.
