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The United Kingdom: licensing andtaxation on a point of consumption basisTony Coles and Andrew Cotton, Jeffrey Green Russell LimitedTony ColesAndrew CottonIntroductionThe move to licensing and taxation of remotegambling on a point of consumption basis in theUK gathers pace. The Gambling (Licensing andAdvertising) Bill (the “Bill”), which will amendthe licensing requirements of the Gambling Act2005, received its first reading in the House ofCommons on 9th May 2013 and is expected tobecome law by the end of 2013 and take effect fromas early as April 2014.Meanwhile, on 16 August, HM Treasury publishedit legislative proposals on taxation, in light of theresponses received from the industry to its taxconsultation.The Gambling(licensing and Advertising) BillWhat is the effect of the Bill?i) The Bill will extend the territorial applicationof Section 33 of Gambling Act 2005 (the offenceof providing facilities for gambling), requiring allremote operators to obtain an Operating Licencefrom the Gambling Commission if they wish to dobusiness with British residents. The Bill will do this bysubstituting Section 36(3) as follows:Section 33 applies to the provision of facilities forremote gambling only if –(a) at least one piece of remote gambling equipmentused in the provision of the facilities is situated inGreat Britain, or(b) no such equipment is situated in Great Britainbut the facilities are capable of being used there.[emphasis added]ii) The Bill also proposes the repeal of the offence ofadvertising foreign gambling (Section 331) and wouldthereby remove the current exemption permittingoperators licensed in EEA and “white-listed”jurisdictions to advertise their services in Britainwithout a British licence.iii) It would also extend the territorial scope of theoffence of advertising unlawful gambling (Section330) and the regulations controlling the advertisingof remote gambling by way of remote communication(Section 328) by amending Section 339(9) in line withthe amendment made to section 36(3).The Case for ChangeMuch has been written before concerning the basisfor the imposition of point of consumption licensing,and many have speculated as to the possiblesusceptibility of the measures to a challenge on thebasis that their compatibility with European law.For its part, the government concludes that, “thecurrent system is flawed and can no longer adequatelyensure the protections for British customers the[Gambling] Act envisages in a changing Europeanand International landscape”.It cites the following as justification for theproposed changes:• Although the majority of operators targetingBritish customers are subject to established andeffective regulatory regimes, not all are. The GamblingCommission are aware of emerging Europeanjurisdictions where very little is known about the levelof regulation and consumer protection.• There are different regulatory approaches overseaswith limited consensus in areas such as standardsand software testing resulting in varying levels ofprotection for British customers.• There is a potential risk that match fixing andsuspicious betting practices are taking place onoverseas licensed sites.• It is becoming increasingly difficult to identifythe level of regulatory oversight of gambling servicesand equipment when operators are permitted tolocate equipment in different locations. This canlead to confusion for consumers and prevents theGambling Commission from being able to directlyinvestigate complaints.The Gambling Commission has been pressing the UKgovernment to make the changes for some time citingthe difficulty it has in fulfilling its statutory obligationsto advise the government on gambling, its regulation18 | European Gaming Lawyer | Autumn Issue | 2013