U.K.Government Proposes 'Secondary Licensing' for Online Gambling

The Department for Culture, Media and Sport in the United Kingdom is expected to unveil a new proposal to upgrade the existing regulations regarding offshore online gambling operations. A review commissioned to look into how overseas operators might be more accountable to the U.K.'s regulatory system with items such as "securing fair contributions from overseas licensed operators towards the cost of regulation" on the agenda. Increased concerns about the extent of match-fixing in various sports prompted the report which is expected to help ensure more information is provided by offshore operators about suspicious betting patterns. The Department for Culture, Media and Sport and the Gambling Commission in the U.K. produced to report together in expectations of getting a "secondary licensing", regime established. It is not expected to use it to force overseas operators to pay the statutory horse racing levy. Sports minister, Gerry Sutcliffe assured horse racing operators that this will not stop debate over the future of the tax on online gambling operators and when the review was commissioned he said, "getting a fairer deal for U.K. operators" was one of his "top priorities". Displeasure was noted from the government of the U.K. when William Hill and Ladbrokes moved operations offshore after concessions were granted to the industry. The move cost the horse racing industry an estimated £4.2m, and the overall take from the tax on bookmakers' gross profits was £93m in 2008-09, down 20% on the previous year. With a new system, offshore bookmakers would also have to be licensed in the U.K. If companies do not comply they would be banned from advertising in Britain.

Clive Hawkswood, CEO of The Remote Gambling Association, which represents major online gambling operators, said, although operators would be willing to listen to the proposal, "The reason our companies are offshore is not because of the Gambling Commission, but because of tax. If they want to go for this dual licensing approach, we'd have to sit down and work through the details. But none of that is undo-able."