Changes in UK Online Betting Laws

The UK government is actively considering a change in its online betting laws by amending the Gambling Act. The proposal will require all online betting sites wanting to advertise in the UK to obtain a license from the UK Gambling Commission and pay the applicable charges. This has been reported in the Daily Mail and the Guardian.

According to the press reports this proposed change is a next step in a long running feud between UK online betting sites and the UK government. The earlier Labour government had issued a White List of jurisdictions that did a thorough due diligence before issuing licenses. Betting sites that were licensed in these jurisdictions were allowed to advertise in the UK and could thus solicit British customers. The objective was to increase the competition so that the customers benefited while ensuring that they wagered at responsible betting sites.

This actually put the UK online betting sites at a disadvantage. Taxes on betting sites licensed in the UK are much higher. In addition there are two levies that UK betting sites have to pay. One is a contribution to the research, education and treatment of problem gambling in Britain. The more controversial one is a contribution to British horseracing in order to subsidize their losses. The betting sites licensed in off shore jurisdictions can access UK customers but do not have to pay the taxes and levies.

This has led to many UK online betting sites surrendering their UK licenses and moving to one of the jurisdictions on the White List. Many other betting sites have stated that they too would leave if the playing field is not leveled immediately. The proposal under consideration seeks to revert to the earlier position banning off shore betting sites from advertising in Britain. However, this does not solve the problem. The off shore betting sites can continue to offer their services in the UK without advertising. A fool proof mechanism to prevent them from doing so does not exist.

The Culture Secretary of the current Conservative-Liberal Democratic coalition government, Jeremy Hunt, is considering some other changes as well. One of them is a ban on the use of credit cards for funding online betting site accounts. Players staking money that they do not own has led to an increase in the incidence of problem gambling according to Hunt. The new laws are expected by end of March 2011 as per the newspaper reports.

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