The UK was set to introduce a controversial new law regarding taxation of international online gaming operators. They will now postpone the new Point of Consumption licensing system as the Gibraltar Betting and Gaming Association puts forward a challenge to the new system.
Currently UK betting websites do not have to pay tax, as taxation is based on ‘place of supply’. Under the new law, which was introduced as part of the Gambling (Licensing and Advertising) Act 2014, operators would be taxed at point of consumption. In other words, if a UK based consumer uses a site, then taxation is placed on the operators of the site no matter where in the world the site originated from.
The GBGA is upholding a complaint based on the fact that they see this new licensing system as being ‘unlawful’. The complaint was made in August. In response, the UK Department for Culture, Media and Sport has postponed the implementation of the new system. They have not done this, they say, due to any doubts about the legality of the system, but rather to give the judge overseeing the case time to reach his judgement without the pressure to reach his decision by the original planned date of implementation of the system. That date was set to be 1st October, but the DCMS is satisfied with postponing for one month, until the 1st of November this year.
While the British government expressed in its summary of consultation responses to the new system, that Point of Consumption licensing creates a more even playing field for the UK online gambling market, some overseas operators are voicing their disapproval of the new regime by announcing they will no longer operate in the UK market. One of the most recent defectors is the Fortune Lounge Group. This group is the umbrella company for a variety of online casinos so will affect a large number of UK players. These casinos are Major Tom, Red Flush, Royal Vegas, Platinum Play, 7 Sultans, Euro Palace, Casino LaVida and Vegas Palms. The Spin Casino, operated by Betway Group, will be the casino that Fortune Lounge Group consumers will be redirected to.
Renee is an international analyst and journalist specializing in covering legal developments and legislative efforts in regulated online betting markets world wide.