GBGA to launch second legal challenge against new UK gambling law

GBGA to launch second legal challenge against new UK gambling law

Wednesday, October 22, 2014 Totally Gaming

The Gibraltar Betting and Gaming Association (GBGA) has launched a second legal challenge against the UK over the introduction of new gambling regulations.

Earlier this month, the UK High Court rejected a GBGA appeal that was launched in August. In the challenge, the GBGA said that the new regime, as well as the UK Gambling Commission’s guidance and policies, were not compliant with EU law.

The organisation said that it made the claim against the regulations “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 legal action, although ultimately unsuccessful, delayed the implementation of the regulations by one month, to November 1.

The GBGA has now launched a new legal challenge over the legality of the betting and gaming duty provisions in Part 3 of the Finance Act 2014.

The organisation has alleged that this breaches Article 56 of the Treaty on the Functioning of the European Union (TFEU) in that it restricts the free movement of services.

“Our position is stronger because of the judgment on the new licensing regime,” GBGA chief executive Peter Howitt told TotallyGaming.com.

“Mr Justice Green stated that raising revenues are not a justified reason under Article 56. The fact is that this tax regime has no legitimate purpose. Moreover, the tax is discriminatory and European law supports our position. 

“The Treasury’s position is wrong; this is not a matter of internal taxation designed purely to raise revenues. The government says this tax ensures ‘respect for fiscal sovereignty’ and is essential for the ‘coherence of UK tax authority’.

“We believe this means their real aim is to ensure that UK operators in this market are favoured, at the expense of law abiding and responsible operators outside of the UK. Given the risk to consumers, we have asked for an expedited hearing.” 

Howitt also picked out parts of the new regulations that he said place some operators at an unfair disadvantage to rival companies.

“Challenging on taxation is the best means to protect consumers,” Howitt added. “Responsible foreign operators would suffer double taxation, putting them at a commercial disadvantage not just to UK operators but particularly to rogue operators over whom the Gambling Commission has not the ability to enforce its regulations.

“If responsible foreign operators are forced to raise prices, it is inevitable that many consumers will move to companies with no regulation and lower overheads. Rogue operators will be beyond reach of UK law and consumers will face increased risks of fraud, non-payment and abuse.

“This is a case of unparalleled constitutional importance as it impacts on the provision of services between member states. This tax is a restriction on the provisions of services. 

“There are no equivalent precedents of the UK government seeking to tax entities abroad in respect of the provision of services into the UK without going through the appropriate route of seeking harmonisation through the EU. 

“This position on tax is not in the national interests of the UK. Whilst this tax applies to gambling companies, it does not apply to spread betting organisations. Given European disquiet about tax and the City [of London, the UK’s financial hub], introducing a contradictory tax on the gambling industry weakens the UK’s position on challenging the retention of the FTT.”

The new challenge will not affect the introduction of the Gambling (Licensing and Advertising) Act 2014, which will come into force on 1 November 2014.
 
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