A new law that establishes the Gambling Commission as the industry’s regulator across the globe not only threatens the safety of consumers online but is unlawful, claims the Gibraltar Betting and Gaming Association (GBGA).
Currently, British consumers gamble online with a limited number of licensed operators based in a handful of recognised jurisdictions. Under the proposed new regime the UK is opening the UK market and consumers to operators based anywhere in the world and some of whom will not obtain a licence. The regime will effectively require the Gambling Commission to police the online sector on a worldwide basis. Peter Howitt, Chief Executive of the GBGA argues that this new law, combined with planned tax changes, will drive consumers to the unregulated or poorly regulated market, and so ensure that a significant proportion of UK consumers will be unprotected when they play and bet with foreign operators:
“This is bad for UK consumers, bad for the regulated industry, bad for Gibraltar and is in breach of European law, but fantastic news for operators who choose to avoid proper regulation.
We know of no precedent where any regulator in any industry will be granted the role of licensing and regulating operators all over the world in this way, threatening to criminalise companies and people who fail to submit to its regime. This is plainly unworkable. The likely impact of this legislation will be to drive UK consumers towards unregulated or poorly regulated operators, leaving them exposed to unnecessary risks. This Act allows operators from 165 new jurisdictions to gain licences to operate and advertise in the UK and the Gambling Commission is supposed to regulate this industry with no extra-territorial information gathering or enforcement powers. Clearly that spells a new danger for British consumers.”
The GBGA, which represents Gibraltar-based online gambling operators, has instructed the law firm Olswang to write to the Secretary of State for Culture, Media and Sport, Sajid Javid MP, the Attorney General, Dominic Grieve QC MP and the Gambling Commission to spell out the risks posed by the Gambling (Licensing and Advertising) Act 2014 and to declare its intention to challenge it. In letters before action, which can be seen attached below, Olswang argues that the new licensing regime established under the Act breaches Article 56 of the Treaty on the Functioning of the European Union (TFEU) and is unlawful, as Dan Tench, a partner at Olswang explains:
“The Government announced that this law was introduced with the express intention of addressing concerns it said it had about the protection of consumers. The measures introduced through this Act are neither reasonable nor proportionate to achieving that goal and are likely to have adverse consequences for consumers. All this Act achieves is a wholly unjustified, disproportionate and discriminatory interference with the right to free movement of services, a right enshrined in European Law. For these reasons the Government must reconsider this law or we shall have no option but to ask the courts to review it for them.”
The GBGA argues that the new law is unnecessary, particularly given that Gibraltar has one of the most effective regulatory regimes in the world. It argues that a more effective means to promote consumer protection was rejected by the Government without proper consideration or explanation. This proposal, called Passporting, would ensure that highly experienced and effective local regulators retain responsibility for licensing their domestic industry but work with and share information with the Gambling Commission on a formally structured basis.
The GBGA has now written to the Government and the Gambling Commission placing them on notice of a claim for judicial review. They have 14 days in which to respond.
Jonathan Hawker, Slate Campaigns
T +44 20 3126 4979
M +44 7979 907 000
NOTES FOR EDITORS
About the GBGA
The Gibraltar Betting and Gaming Association is an industry association that works to ensure a fair market for operators and a safe environment for consumers, by speaking for the industry with one voice on industry and consumer matters.
- UK Court rules that the Point of Consumption Licensing Regime is lawful - 10th of October, 2014
- EC Recommendation is good for online gambling market - 16th of July, 2014
- “Unlawful’” Gambling Law Poses “New Danger” for Consumers - 18th of June, 2014