Comment: Britain's gambling clampdown could cripple Gibraltar's economy

Peter Howitt: 'The UK government's plans take no account of the need to assess an operator with reference to the jurisdiction in which they are based'
Peter Howitt: 'The UK government's plans take no account of the need to assess an operator with reference to the jurisdiction in which they are based'
Ian Dunt By

By Peter Howitt

For more than three centuries Gibraltar has been a British territory, yet government proposals - reaching report stage on March 4th in parliament - could deal the Gibraltar economy and British consumers a hammer blow by the end of this year.

The gambling licensing bill plans to change online gambling licensing laws. If passed it will undermine the excellent protection afforded to UK customers by Gibraltar and its online gambling operators, who currently supply the majority of UK consumer online gambling transactions. 

The legislation plans to impose a new licensing regime for remote gambling firms that supply the UK, leaving the UK Gambling Commission trying to both licence and regulate far flung operators with little or no connection to the UK or even Europe.

For many years Gibraltar has been championed as the centre of excellence for gambling regulation, yet these plans completely ignore the longstanding experience and expertise of Gibraltar's regulatory status and its operators.

Gibraltar has stringent licence approval measures, with less than 30 licensed operators despite interest from many hundreds of others. This selective approach has ensured that operators on The Rock are among the best in the world in terms of a low volume of consumer complaints. It also explains why, with 20 years' experience in the remote gambling sector, the territory is heralded as one of the safest, best value and most competitive markets in the world.

The UK government's plans take no account of the need to assess an operator with reference to the jurisdiction in which they are based, the quality of local regulation and the need for mutual agreement on a wide range of other regulatory matters, including anti money laundering, data protection, consumer protection, contract enforcement and payments protection. 

By putting the Gambling Commission in the position that it is licensing and regulating overseas operators in a vacuum in places where it has no proper information gathering, monitoring or enforcement powers, the UK government ignores many crucial regulatory issues that are necessary to protect British consumers from harm.

This, combined with the planned UK POC tax measures will see significant damage dealt to Gibraltar's economy. Operators on The Rock will be forced to cut costs or even relocate in order to stay competitive against unlicensed and untaxed operators. The human impact of the bill is also potentially significant. More than ten per cent of Gibraltar's workforce is employed in the gambling sector and it makes up around 20% of the country's GDP, so any bill which saw this vital part of the economy eroded requires more careful consideration.

The Gibraltar Betting and Gaming Association has proposed a practical solution to the UK government through cross-border collaboration and regulatory supervision. These proposals would ensure that the UK's consumers are more stringently protected as well as enabling the industry, government and regulators to deal with cross-border issues in a co-ordinated manner.

Allowing the imposition of a wide range of British standards on both locally established UK operators and operators based in other suitable jurisdictions, our proposal is built upon an approach that has already proven successful in financial services regulation within the EU. It makes use of stringent and experienced approved local regulators and so would allow UK regulatory resources to be properly targeted on problem areas, operators and jurisdictions.

As we get closer to the final stages of the legislation, we once again urge the British government to reconsider its plans in light of the effect they would have both on the Gibraltar economy and Britain's consumers.

Peter Howitt is CEO of the Gibraltar Betting and Gaming Association.

The opinions in's Comment and Analysis section are those of the author and are no reflection of the views of the website or its owners.


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