enrose, announced that legislation would be tabled on Thursday, requiring a licence fee to be paid by those active in placing bets on racing, and other sports, as well as gaming activities, with firms outside the UK.
Penrose said the revamped industry would be based on the point of consumption rather than point of supply, however no detail was given on the tax system this would involve, which jurisdictions would be affected or when this would come into force.
“It means anybody based anywhere in the world who wants to sell gambling services to any consumer based in the UK will, in future, have to have a Gambling Commission licence,” Penrose said.
Specific details of the amounts involved, and the distribution of what is perceived as a new betting tax, have yet to be clarified. Racing’s slice of such a tax, which has become a major issue in times of an ever-decreasing Levy, is unknown.
Since major bookmaking firms such as Ladbrokes, William Hill, Betfred, as well as Betfair, the betting exchange, moved offshore, many millions in revenue have been lost to the Treasury, as well as contributions to racing through the Levy.
In other news, Eddie Ahern will miss the whole of Glorious Goodwood after being hit with an additional 14-day ban for an incident that happened in Sweden on May 31.
Ahern was originally given a seven-day suspension by the local stewards for an offence in the Group Three Stockholms Stora Pris at Taby.
Any new licensing system would require a change in primary legislation with analyst James Hollins of Evolution Securities suggesting that this could “push full implementation out to 2013 or 2014”.
“We think that the taxation discussion will come prior to implementation as and when the Treasury gets involved,” Hollins said, however he warned that the suggestion that offshore operators are not “bearing a fair share of the costs of regulation firmly implies, in our opinion, that taxation will become part of the new legislation.”
Currently any gambling operator offering services in Britain must be licensed or regulated in either an EEA state or one of the states approved by DCMS on the White List that includes Gibraltar, the Isle of Man, Alderney, Malta, Antigua, Tasmania and Curacao.
The new proposals would effectively mean the end of the White List as it stands, however Penrose added that the Gambling Commission would ensure that regulatory good practice is recognised so that overseas based businesses in “trusted jurisdictions”, such as the white listed countries, would have much “lighter touch approach and, for example, will not have to duplicate regulatory work.”
In between a final decision being made on licensing and taxation all white-list located entities will be entitled to a transitional licence and can continue trading as normal.
Allan Bell, Isle of Man Minister for the Department of Economic Development, called the decision to treat trusted jurisdictions such as the Isle of Man with a lighter touch "encouraging".
"Under the automatic transitional license Isle of Man based companies will have a streamlined point of entry and significantly reduced administrative costs when they obtain a UK license. In my recent conversation with Minister Penrose I received assurances that the UK Gambling Commission has no wish to duplicate the work that our Gambling Commission does in regulating our operators.”
“The eventual timescale for these proposals to enter into force are not yet determined and before the proposals become law we will remain in close dialogue with the UK Government to ensure that the interests of our sector continue to be heard. Alongside this the Isle of Man Gambling Supervision Commission will work with its counterpart in the UK to establish how they will work effectively together under the new regime," Bell added.
"The current system for regulating remote gambling doesn’t work, John Penrose added. “Overseas operators get an unfair advantage over UK based companies, and British consumers who gamble online may have little or no protection depending on where the operator they deal with happens to be based.
“We will create a level playing field, so all overseas operators will be subject to the same standards and requirements as those based in Britain, as well as being required to inform the Gambling Commission about suspicious betting patterns to help fight illegal activity and corruption in betting,” Penrose concluded.
Clive Hawkswood, CEO of lobby group the Remote Gambling Association, said the main players in the UK online gambling market “already adhere to high regulatory standards” comparable to those in Britain adding that regulation by the Gambling Commission “holds no fears” for the group’s members.
However, he warned that a significantly higher tax burden, “that could lead to a reduction in value and choice for consumers”, certainly does [hold fear]. “It is therefore crucial that any new regulatory regime is complemented by a fair and sustainable fiscal regime.”