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United Kingdom Puts Forward Legislation to Toughen Gambling Regulations

Following discussions that began in the autumn of 2011, the United Kingdom has released a legislative draft that will tighten gambling regulations, taxing operators at the point of consumption.

The UK government labeled the current regulatory regime as “flawed” and “unsustainable” and expressed concerns over inadequate protections for British consumers.

“The government is committed to strengthening the regulation of remote gambling to ensure that effective consumer protection measures are afforded to all British based consumers,” said sport and tourism minister Hugh Robertson.

“Currently, consumers based in Great Britain face different consumer protection arrangements, and have to deal with a myriad of different regulators, depending on where the remote gambling they are taking part in is regulated.”

The United Kingdom is the largest regulated gambling market, with punters generating £2 billion in gross gambling yield.

Under the draft, all gaming concerns—home or abroad—would be required to hold a UK Gambling Commission license to operate and advertise in Great Britain.

Under the current Gambling Act of 2005 only operators with “key equipment” in Britain are required to be licensed by the UK Gambling Commission.

Most sites have chosen to operate and be headquartered offshore, taking away potential revenues. Britain’s iconic Ladbrokes and William Hill, for example, moved their online operations in 2010 to Gibraltar to take advantage of lower taxes.

Further, the proposed legislation will see operators make contributions to problem gambling research and education.

“This problem is growing as more countries permit online gambling.  At the same time, it is unfair to GB-licensed gambling operators that overseas competitors benefit from access to the market in Great Britain without necessarily bearing a fair share of the costs of regulation, or of research, education and treatment of problem gambling.”

Gambling operators based abroad will also have to report suspicious sports betting patterns. Robertson noted that investigations have been hindered in the past because overseas operators and regulators have refused or failed to provide information.

“These reforms will ensure consistency and a level playing field as all overseas operators will be subject to the same regulatory standards and requirements as British-based operators,” he said.

The UK government is currently surveying gaming operators ahead of the legislation’s introduction to Parliament. The Treasury will determine the point of consumption tax rate, which will likely be 15%.

Click here to read the draft.

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