Gambling update

Author: Grant Gordon

There are changes afoot to the UK gambling regime. We set out below a short summary of recent key changes.

The Gambling (Licensing and Advertising) Act 2014 (Act) received Royal Assent on 14 May 2014, amending the Gambling Act 2005.

Under the previous regulatory regime, remote gambling operators situated outside Great Britain were not regulated by the Act. (The Act does not apply to Northern Ireland.) As part of the reforms introduced by the Act, all remote gambling operators selling and offering their services into the British online gambling market will be subject to the provision of the Act and its regulations by creating a regulatory framework based on “place of consumption” (POC) – the customer must be physically located in Britain when the gambling facilities are used. The introduction of the POC regime means that any overseas company wishing to advertise or offer its gambling services in Great Britain must also hold a licence issued by the UK Gambling Commission.

All operators, whether based here or abroad, advertising to or transacting with British consumers will now be required to hold a Remote Operating Licence (ROL) issued by the Gambling Commission if: (i) at least one piece of remote gaming equipment used in providing remote gambling facilities is situated in Great Britain; or (ii) the facilities for remote gambling are used in Great Britain.

These amendments aim to provide greater protection measures for users in Great Britain of remote gambling services, such as online bingo, casino, betting websites and telephone betting.

Implementation is still to be confirmed, but the Gambling Commission does not envisage it being before 1 September 2014. Since March 2014, remote foreign operators from EEA jurisdictions already holding a licence with the Commission have been able to apply for a remote licence online or to make certain changes to their existing licence. The Commission anticipates a deadline for submitting applications for licences no earlier than 1 September 2014. Any operators whose applications have not yet been determined by the Gambling Commission before the new regime commences will be issued with an interim licence pending final determination of the operator’s application.

Under current tax rules, gambling activities are taxed on a “place of supply” basis. As noted above, from 1 December 2014 this will be changed to POC. This means that gambling operators who offer remote gambling to customers who “usually live” in the United Kingdom are liable to be subject to a new POC tax charged at a rate of 15% of the gaming provider’s profits on remote gaming regardless of where in the world the operator is based. This means that all bets placed by UK based customers will now be subject to UK gaming tax. However, UK based operators who supply remote gambling to customers who do not “usually live” in the UK will no longer be liable to tax on those transactions.

If you offer remote gambling to UK customers, you will need to establish which customers “usually live” in the UK. In order to determine this, operators will be required to ask their customers for an address where they usually live and will also be required to maintain their customer locations records for audit purposes. If no address is given then it will be assumed they “usually live” in the UK.

If you hold or are required to hold an ROL, as detailed above, you must be registered for the appropriate tax and file returns online by 1 December 2014. Registration for this service will be available from early Autumn 2014. These reforms are contained in the Finance (No.2) Bill 2013 – 2014.

For more information please contact Grant Gordon of Fladgate’s leisure, betting and gaming team at or call 020 3036 7337.

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