Is the UK 'Secondary Licensing’ Imminent?

Is the UK 'Secondary Licensing’ Imminent? British online gambling firms to gain competitiveness

According to the latest reports in the UK media, the much debated 'secondary licensing' regime, which should enable British-licensed online gambling firms to better compete against offshore operators, is imminent.

It has been announced by John Penrose, the minister for tourism and heritage for the Department of Culture, Media and Sport, that legislation would be presented on Thursday, adding that those who take part in placing bets on racing, sports and gaming activities with firms outside the UK will need to pay a license fee, whose amount has not been disclosed yet.

This measure comes due to the fact that major bookmaking firms such as Ladbrokes, William Hill, Betfred, and Betfair, moved to offshore jurisdictions where they pay lower taxes, thereby causing a big loss to the UK Treasury.

Another measure proposed to fight offshore competition is that such companies cannot advertize in the UK unless they hold a British license in addition to one from their offshore jurisdiction of choice.

The announcement of such movements triggered a response from the Remote Gaming Association, a trade body representing the interests of online gambling companies, whose CEO Clive Hawkswood said: "Now that the Government has confirmed its intentions, we intend to play a constructive part in the process to ensure that the new regulatory and tax regime will provide an environment where Government objectives can be achieved; where the industry can succeed commercially in the global online gambling market; and where the interests of consumers continue to be properly safeguarded.

"The main players in the UK online gambling market are predominantly based offshore, but they already adhere to high regulatory standards which are comparable to those in Britain. Regulation by the Gambling Commission therefore holds no fears for our members, but a significantly higher tax burden that could lead to a reduction in value and choice for consumers certainly does.

"It is therefore clearly crucial that any new regulatory regime is complemented by a fair and sustainable fiscal regime. We look forward to working with DCMS, HM Treasury, and the Gambling Commission to ensure that all of these issues can be successfully addressed.’

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