hat new business opportunities do the changes in gambling laws driven by John Penrose bring to RGA members?
This actually brings in a new restriction on trade. The present British legislative regime allows operators licensed in other EEA juridistions and those licensed in jurisdictions with comparably high regulatory standards to Britiain outside of the EEA (known as the White List) to advertise and offer services to British consumers. The changes proposed by the UK Government will require all operators that wish to provide gambling services to British consumers to obtain a licence from the British Gambling Commission.
This may also mean that those companies are required to pay UK taxation, which is currently 15% and considerably higher than jurisidctions such as Gibraltar. Along with additional licensing costs, there is the distinct possibility of significant additional fiscal burdens on operators whilst no substantive evidence exists of any social harm from the existing regime.
In your opinion, is this new regulation positive for the industry?
To date, the British regime has been a success from an economic standpoint. It has attracted considerable inward investment. To that end, we will be examining the economic issues potentially put at risk from the Government’s approach. For example, the information we have shows that operators invested some £150m in UK advertising in 2010. A large proportion of that was focused on the promotion of remote gambling from offshore-based operations and across a range of products.
This investment in the UK market was, in part, accessible due to the availability of finances through the promotion and imposition of a globally competitive taxation system in those offshore licensing jurisdictions. The UK Government’s proposed approach may well cut into that and have corresponding adverse impacts on the UK economy.
Will the RGA make a proposal to the government with issues that you consider important for this new regulatory regime?
Now that the Government has confirmed its intentions, we intend to play a constructive part in the process to ensure that the new regulatory and tax regime will provide an environment where Government objectives can be achieved; where the industry can succeed commercially in the global online gambling market; and where the interests of consumers continue to be properly safeguarded.
We expect to have a number of meetings with the UK Government over the coming months to discuss both the scope and nature of the regulatory and fiscal regime. Any changes will require primary legislation and the usual consultative process, so any changes will take some months to implement.
Which will be your next steps in pos of a fair regulatory system for both, operators and players?
The importance of the UK market varies from company to company, and any future investment will need to be considered with regard to the fiscal environment and the likely returns achievable from that regime. Whether new companies will view other emerging markets as potentially more productive from a financial standpoint, against an already mature and highly competitive UK environment, is open to question. Those companies already well-established in the UK, albeit that their remote operations may be based offshore, will also need to reassess their level investment against the additional fiscal burdens that the Government’s changes may bring.