Aug 20 - GBGA Officially Threatens Legal Action with Point of Consumption Tax to Commence in October
The Gibraltar Betting and Gaming Association this week officially filed their formerly threatened legal challenge against the UK Government’s ‘point of consumption tax,’ which the Association claims to be unlawful. The tax, which was originally proposed in the 2012 Budget, to come into place on October 1st 2014, will tax gaming operators based on the point of consumption of their customers, instead of the current ‘place of supply’ legislation which sees overseas based companies pay no UK gambling taxes. New legislation will see companies ‘pay tax on the gross gambling profits generated from UK customers, no matter where they operate from’.
THE GBGA has claimed that the new legislation, introduced through the Gambling (Licensing and Advertising) Act 2014, and also the guidance and policies of the Gambling Commission of Great Britain, is ‘unlawful, because it is an illegitimate, disproportionate and discriminatory interference with the right to free movement of services guaranteed by Article 56 TFEU, and is irrational.’
The GBGA believes that the new regime was designed for economic reasons: to grant UK operators a competitive advantage over those from overseas. This objective, its counsel argues, is illegitimate.
‘The absence of effective supervision and enforcement, coupled with the burdensome regulatory requirements, will encourage the growth of and migration to unregulated or poorly regulated operators which will present genuine risks to the British consumer’, the Association argues in its submission to the High Court of England and Wales. ‘When introducing the New Licensing Regime, the Defendants rejected the option of a “passporting” regime. This would have been both less onerous to legitimate operators and more effective in protecting consumers, since it would have been based on effective supervision and cooperation between the GC and overseas regulators.’
GBGA Chief Executive insists that Gibraltar has an effective and knowledgeable regulator in Gibraltar. He believes that the new regime will be ‘bad news for consumers, and for international competition.’
The Gibraltar Government today confirmed that it and the Gibraltar online Gaming Regulator have been served with proceedings by the Gibraltar Gambling and Betting Association as "interested parties" in their litigation. Both parties will independently represented by Lord David Pannick QC and Sir Jeffrey Jowell QC.
The position of the Government ‘will be to ensure that the legal and economic realities of the online gaming industry in Gibraltar are not in any way misrepresented in the proceedings.’
