The UK High Court has dismissed an attempt by online operators based in Gibraltar to quash legislation passed in Parliament earlier this year to tax and license offshore operators taking bets in the country.
The Gambling (Licensing and Advertising) Act 2014 reverses a trend over the last decade that has seen nearly every major UK-based bookmaker and Web gambling operator relocate to offshore tax havens such as Malta, the Caribbean and Gibraltar, a British overseas territory, by requiring all UK-facing operators to obtain licensing from the UK Gambling Commission, wherever they place their servers, and pay the same 15% tax on their British revenue as operators in Britain.
The Gibraltar Betting and Gaming Association, a trade group representing operators there, sued to block the law, calling it a violation of EU free-trade guarantees and decrying it as “unlawful, illegitimate, disproportionate and discriminatory”.
The association insisted that “the UK regulator will find it difficult to hold companies to account in jurisdictions outside of the EU where it has no legal powers and common legal framework or culture.” But High Court Judge Nicholas Green said, “Parliament was clearly within its rights to act as it did.”
The Gambling Commission responded, “Now we can get on with improving the protection for those gambling in Britain.”
The commission said it had received license applications from 161 companies through September. Others wishing to reply have until 23rd October to file under an extended deadline prompted by the GBGA suit.
The tax, which comes into force on 1st December, could add upwards of £300 million (US$480 million) to the Exchequer, according to industry estimates.
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