Gambling Bill in the UK – an international issue

Sponsored post: Hon. Albert Isola MP The Minister for Financial Services and Gaming in Gibraltar writes that he wants a fair deal for all countries.

Gambling policy is a difficult and troublesome area of every Government’s agenda. Over the last 10 years the UK , EU Countries and the United States have wrestled with some or all aspects of gambling policy, not least with remote or ‘online’ gambling.

By contrast, Gibraltar has had a settled and successful regime for many years. It is anchored very firmly in “hands on”, direct regulation to ensure that its consumers are protected, wherever they are in the world, in this global, online market place. To be effective in protecting the consumer the licensing and regulatory regime must be capable of keeping crime out of online gambling, and of protecting consumers in such things as integrity and transparency of the gaming process, security of stakes and winnings, protection of the young and the vulnerable.

This requires that licensees have their important management and operational functions in Gibraltar so that they are accessible to the regulator. So, “Brass plate” operations (as will be permitted by the proposed new UK regime) where operators are licensed in a country but do not have their main operations there are not permitted in Gibraltar, and we also maintain a high standard entry level to ensure that we host only reputable and reliable operators and websites.

The UK is itself now grappling with a new licensing, regulation and taxation regime. The outcome of that is as important to Gibraltar’s economy, and to the commercial survival of leading British companies in this sector as it is to continued protection of UK consumers. In Gibraltar we understand the UK Government’s desire to raise tax from this activity, especially in these economically difficult times. But equally, we think that it is important that the UK gets it right, not just so that Gibraltar is not gravely damaged at a time that we are once again under “economic siege” from Spain, but to ensure that the current high levels of protection that UK consumers enjoy is not eroded. We think that both things can be achieved.

How can “getting it wrong” harm both British companies and British consumers? Well, the online gaming industry is by definition as global as the internet itself. British consumers can switch to foreign websites at the click of a mouse. So, if British operators are saddled with excessively high taxes they are rendered uncompetitive with other foreign websites. They cannot offer their customers the same odds or chances of winning in casino games as foreign websites operating in unregulated, untaxed countries. Experience in other European countries has shown that this leads to a “lose, lose, lose” scenario: British consumers will switch to foreign websites in search of better prices, where they have no consumer protection; important and world leading British companies will go out of business in this market; and, HMRC will not collect as much tax as it could.

Gibraltar and its regulators and operators are world leaders in this relatively new sector, where rapidly changing technology means ever and fast changing business models and regulatory and consumer protection threats and challenges. We and our market leading operators want to work closely with the UK to ensure that the new UK regime works well and fairly for all: that it does not undermine Gibraltar: that it raises tax for the Exchequer, and that it preserves rather than undermine UK consumer protection; that it does not lead to UK consumers being penalised on pricing and quality of offering.

There is much to be learned from the past unhappy experience of European countries that have rushed into this complex commercial, legal, technological and consumer protection minefield, if adverse, unintended consequences are to be avoided. Having initially banned (and now permitted) online gaming the USA stands poised to wrestle commercial leadership of this industry, where British companies currently lead, as a result of Europe getting its policy wrong. We in Britain and British Gibraltar can still get it very right.

We think that it is possible to achieve all of these things, and I am delighted that the UK Departments will shortly be meeting with our operators through their association to ensure that the UK regime benefits as much as possible from our knowledge and experience in relation to the issues that I have mentioned.