UK GAMBLING REFORM A FAILURE?

7 September 2007

Twice as many staff, but an apparently reducing workload, opines UK newspaper


The UK newspaper The Guardian has published an op-ed article critical of the gambling reform developments in Britain and the impending control of the Gambling Commission, which will regulate UK gambling from September 1.

Commenting that the Commission now has, at 200 twice the staff of the old Gaming Board, the newspaper points out that two of its originally intended workloads have already disappeared - prime minister Gordon Brown has killed off the supercasinos and the world's online poker and casino companies have declined the invitation to come to Britain to be regulated.

The latter fact illustrates how the Gambling Act has failed to deliver even the government's watered-down intentions, the article claims.

The big idea was to make Britain a friendly place for online gambling operators. Britain would be pragmatic: the operators would be treated as legitimate businesses if they agreed to act responsibly.

But it hasn't worked, the article claims. A mere 14 online poker and casino operators have registered for UK licences and virtually none is a mainstream company. The explanation is simple: nobody wants to pay tax at the UK rate of 15 percent of gross profits.

The Guardian piece draws attention to the borderless nature of the world of internet gambling, where computer servers that power the websites can be located almost anywhere.

"To be able to advertise in Britain, an operator merely needs to be within the European Economic Area, so, guess what, Malta is suddenly popular. Tax rates in Malta have been cut to 2.5 percent; at the last count, 200 online gambling companies had applied for licences there. The Gambling Commission's bureaucrats in Birmingham have been bypassed," the article reveals.

"The industry's view is that Britain might care to cut its tax rate to match Malta's. That ain't going to happen: it knows the headlines in the Daily Mail would be horrible. We have a mess," the author concludes.

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