UK Licensing Laws May Get Stiffer

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Reports in leading British newspapers like The Daily Mail and the Guardian suggest that off shore online gaming companies that want to advertise their services in Britain may have to obtain a license from the United Kingdom and pay the associated levies and fees.

On the face of it this appears to be a simple and reasonable requirement. If off shore online gaming operators want to advertise in Britain then it is obvious that they are targeting British customers. The government has a right and responsibility to protect the interests of these customers by ensuring that the gaming operators are complying with the same requirements that are applicable to British licensed operators. These requirements have been formulated by the UK Gambling Commission. They include prevention of children from engaging in online gambling and contributing to the research, education and treatment of problem gambling in Britain. The simplest way to ensure this is that the off shore operators be asked to obtain a British license and for that they would have to pay the same charges that British licensed operators are paying.

But there are deeper undertones to this whole affair. The reports state that the target of these proposed laws are the British companies that Moved from UK jurisdiction to other approved jurisdictions like Gibraltar, Alderney, the Isle of Man and Antigua. This move resulted from the high taxes that these gaming operators had to pay for being licensed in the UK. These operators were competing with other off shore operators who were able to offer more competitive services because of lower taxes in their jurisdictions. Recent changes in the UK gambling laws allowed operators having licenses in jurisdictions approved by the UK to advertise in the country. Therefore the operators that shifted overseas did not lose their advertising privileges. The objective of the proposed law is to bring these operators back to Britain and force them to pay the taxes.

There are political undertones to this proposal as well. The current Conservative-LibDem coalition government is blaming the earlier Labour government for being lax on online gambling. The particular charge is that by allowing online gambling service providers to advertise, the overall incidence of Internet gambling has gone up and with that the incidence of problem gambling. It has also been reported that Culture Secretary Jeremy Hunt is considering a ban on the use of credit cards for online gambling to stop people risking money they do not have. It has been estimated that UK consumers spent £2.5 billion on online gambling last year, and operators licensed by the Gambling Commission represented less than a quarter of this. The change in the gambling laws could come as early as March 2011.

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