New Gibraltar Legal Challenge to UK Gambling Act

June 22, 2014 by

gibraltar-legal-challengeThe United Kingdom has been facing a particularly interesting problem over the past four or five years as far as their online gambling industry is concerned. A number of companies have left to other countries for more favorable tax rates while still providing services to players from the UK. This has created a situation where the UK has pushed towards a new UK Gambling Licensing and Advertising Act of 2014 which includes provisions for preventing this type of situation. However, there is a new Gibraltar legal challenge to this act which could change up how the UK has to play their hand.

About the Gibraltar Legal Challenge

The basis of the legal challenge to the new UK Gambling Act is that it creates a situation where the free exchange of services is no longer allowed. This is typically something that European law has been against restricting, and Gibraltar has a pretty good basis for their legal claim on this information alone. Aside from that, it would push the players and bettors from the United Kingdom into having incentives to play at sites that are not regulated from inside the UK, and that puts them at an unnecessary risk.

Practical Considerations

Another major problem, and one that Gibraltar brought up in their complaint as well, is that the law could be seen as the United Kingdom trying to effectively patrol the online gambling industry on a global basis. Because they would be allowing and disallowing different companies to operate there, they would be acting, as Gibraltar claims anyway, as a sort of global regulatory body, and that’s not something that they have a legal basis for doing.

With that having been said, those laws aren’t unlike what’s currently going on in the United States where the unregulated (in the country) sites have the competitive advantage while sites that are regulated in three states aren’t doing so hot. Online gambling regulation is relatively new in the United States, so the comparison isn’t completely accurate, but it’s worth keeping in mind while everyone waits to see what happens next.

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