“In April 2012 it was reported that the UK Gambling Commission was in talks with its French counterpart ARJEL regarding a co-operation.
When the UK – which as Minister of State Smith says has a “strong history of being a leader in gambling provision, and [a] highly reputable regulatory environment” – is seeking advice and co-operation with France on the matter of gambling regulation, it is time for the sector to be worried. Just look at the state of the French internet gambling sector.”
Such was the concern GBGC’s director Lorien Pilling raised in the Interactive Gambling Report back in May 2012.
Any agreement between an EU country and the UK on gambling matters was unlikely to lead to a benefit for UK-facing operators.
And so it has come to pass.
As part of the new point of consumption licensing process, the UK Gambling Commission has asked those operators applying for a licence to list the countries where they trade. If that country contributes more than three percent of revenue then the application must be accompanied by a legal opinion that it is lawful to conduct internet gambling in that country.
But imagine the situation in which 20 licence applications are sent to the Gambling Commission and each trades in the same particular country that qualifies for a legal opinion.
Some say that the Gambling Commission will do nothing; they are merely causing operators to be aware of their social requirements.
But that leads to another question. Why collect data and do nothing with it when you have it? Could it be that once consistency has been established the Gambling Commission may change the regulations at a later date?
At school I was taught that trade was so important to the UK being an island in the northern hemisphere. We were told we had to export to survive because our climate was such that we were, in those days, not self sufficient in food. To pay for the food we had to sell our products abroad.
I would have thought that those seeking to bet in a strong gambling jurisdiction like the UK would have been a good thing, something that should be encouraged. It benefits the UK, the punter and the operator.
It brings forward the question whether there could be more to this than meet the eye.
But remember – not everyone went offshore. Bet365 for example stayed in the UK, paid 15% gross profits tax on its betting activities and employed 2,345 staff. They intend to build a new office and add a further 500 jobs. Bet365 has done all of this and paid the tax. So its offer to customers is unlikely to change. They will remain competitive.
William Hill and Ladbrokes went offshore to Gibraltar. They have demanding institutional shareholders that require dividends and non executive directors who will not take even the slightest regulatory risk. Their competitive position is cramped by those limitations.
How will they compete with Bet365 without taking a hit on profits? They cannot. When that situation arises the only course of action is to change the competitive landscape. By restricting the likes of Bet365 and GVC – both strong in certain non-UK internet gambling markets – the balance is restored away from value to brand.
Would the Department of Culture Media and Sport (DCMS) and the UK Gambling Commission be tempted by another such deal with the likes of Hills and Ladbrokes along the lines of: you return from Gibraltar and we will restrict UK-licensed companies from taking bets from ‘grey’ areas?
In the short term it would be lauded as a success for Treasury: we have slammed a tax on the bookies and in return they have returned to the UK which will be good for jobs. But the punter will be worse off and that will encourage the drift towards illegal betting sites.