The Gibraltar Betting and Gaming Association has been told by the High Court that its judicial review against the UK´s point of consumption tax can go ahead.
Earlier this year the Gibraltar Betting and Gaming Associated (GBGA) unsuccessfully sought to have the UK Gambling (Advertising and Licensing) Act overturned on the grounds that it was discriminatory and contrary to Article 56 of the Treaty of the Functioning of the European Union, on the grounds that it restricted the movement of free trade within the EU.
Although finding against the GBGA at the time, Mr Justice Green wrote in his verdict that
a restriction designed to raise tax would be an economic objective and, as such, inadmissible as a justification [for the introduction of the Act]. The GBGA believes that the 15% point of consumption tax is an
economic objective of the Act, and is challenging the Act once again.
Unfair and Likely to Encourage Black Market
In its case against the UK Gambling (Advertising and Licensing) Act, the GBGA claims that point of consumption tax has been introduced
in pursuit of an illegitimate aim, and will discourage online gambling operators from moving to foreign jurisdictions and offering their services to customers in the UK from those foreign jurisdictions.
The GBGA also alleges that a reduction in the benefits to gamblers in the UK (as online operators aim to recover the taxes they have to pay to the UK government) will incentivise players to use non-licensed sites that can afford to offer more lucrative benefits. According to the GBGA, gamblers will abandon the protected environment of the EU to play on black market sites.
Second Judicial Review to be Heard Next Year
Despite being given the green light to proceed with the second judicial review, nothing is going to happen until 2015. The GBGA wants a little time to communicate
key messages to the relevant authorities and politicians in the UK, as the second judicial review will investigate the how the original review was conducted and whether Mr Justice Green´s original verdict was justified.
If the GBGA´s arguments stand up in the second judicial review, the original case could be heard all over again – with the potential that the UK Gambling (Advertising and Licensing) Act could be scrapped or significantly revised to remove the point of consumption tax. Speaking about the GBGA´s prospects for success, the Association´s CEO peter Howitt said:
I think we have a good case to make but I’m always hesitant to say we are confident in litigation, especially when you are challenging a sovereign state on an area of taxation. The litigation has a lot of elements that make success politically difficult but the Association believes there are some key issues that need to be addressed.
About the Gibraltar Betting and Gaming Association
The GBGA represents the interests of many leading online gambling operators – 888Poker, Bet365 Poker, Bwin.Party and William Hill Poker amongst others – and, although supporting an environment in which players are protected, the Association aims for a
fair and open market.
The GBGA is also an associate member of the European Gaming & Betting Association (EGBA) whose objectives are:
Promoting fair competition for licensed EU operators and consumer choice in a regulated European online gaming and betting market, so it is fairly surprising that the EGBA has not also thrown its weight behind the GBGA´s legal challenge.
You can keep up-to-date with the progress of the GBGA´s legal challenge by following @PokerNewsReport on Twitter.