Regulators Differ on UK Online Gambling

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The hearings conducted by the United Kingdom Parliamentary Select Committee for Culture, Media and Sport are continuing. The objective is to give direction to online gambling regulation in the country. The latest to depose before the committee were the regulators from Alderney and Gibraltar. They are very much interested parties because they are on the United Kingdom white list. Their licensees can operate and advertise in Britain but do not pay taxes there. If the United Kingdom decides to go for secondary licensing then these online gambling operators would be affected. During the hearing the spokesmen for these two regulators expressed differing opinions.

Andre Wilsenach from the Alderney Gaming Control Authority suggested the need to tighten the regulations. This was understandable because last year its licensee Full Tilt Poker had been indicted for violations of license conditions. He advocated carefully assessing the risk profiles of the licensee operators. Based on where operators do business, under which licensing jurisdiction, what their financial processing arrangements are and other factors, the operators could be assigned a risk rating. Online gambling operators with higher risk profiles should be subject closer oversight, including independent audits on a quarterly basis, at the operator's expense. Such a system could benefit the UK Gambling Commission in its regulation of online gambling.

Philip Brear of the Gibraltar Gambling Commission focused on the relationship between his organization and the United Kingdom regulator. He suggested that it had not been as productive as he would have wished it to be. Brear indicated that the UK Gambling Commission had considerably less online gambling regulatory experience than Gibraltar. He even pointed that the UK body's main adviser operated from Australia. Brear also deposed that the present regulatory provisions of the 2005 Gambling Act were sufficient to protect the interests of British online gamblers, and therefore could remain largely unchanged.

Meanwhile, the latest gambling prevalence statistics have been released by the UK Gambling Commission and they do not bode well for online gambling operations within the country. The Commission observes that most British players gamble at overseas regulated websites. It was estimated that the total UK online gambling market was £1.9 billion for 2010, of about one third went to British regulated online gambling sites. Online gambling on bingo and casino games has declined by 19% over the last two years, due to the relocation of significant UK brands with offshore regulators. The report said, "We expect the GGY from Commission licensed operators to decline in the future as the effect of Betfair moving offshore is seen in regulatory return data. Further relocations of operators overseas cannot be ruled out."

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