CJEU reference on UK gambling tax regime

In July, the High Court ruled that the Gibraltar Betting and Gaming Association’s (GBGA) challenge to the new UK point of consumption tax regime on remote gambling, raised questions of European law which should be referred to the CJEU. The GBGA applied for judicial review of the Gambling Act after it lost a legal challenge last year. The GBGA argues that the Gambling Act restricts free movement of services in breach of Article 56 of the Treaty on the Functioning of the European Union.

Computerised slot machines subject to VAT

Also in July, the Supreme Court backed the HMRC in ruling that a slot machine connected to a separate random number generator (RNG) was subject to UK VAT because the element of chance was “provided by means of machine”. A single RNG controlled the choice of resting position of up to six slot machines and the High Court and VAT and Duties Tribunal ruled that because the RNG was not part of the terminals the element of chance was not provided by means of machine. The Court of Appeal and the Supreme Court took the view that a broad construction was required to avoid absurdity.

Draft licensing conditions for gambling operators aimed at preventing crime linked to gambling

The Gambling Commission published draft new licensing conditions for gambling operators which are aimed at preventing crime linked to gambling. The proposals are open to consultation until 30 December 2015.

Under the plans, gambling operators would need to carry out an annual risk assessment in relation to their business being used for money laundering and devise an action plan to manage and mitigate any risks. The Gambling Commission would be able to access both of these on request.

Operators would also need to take reasonable steps to identify customers presenting a high money laundering risk and to establish that funds spent were not the proceeds of crime. A further condition would require operators to prevent their own employees using information from suspicious bets to place their own bets, including where this is with other operators.

Government proposes changes to regulation of lotteries

The government made a draft order in October intended to make it easier for small scale lotteries to be used to raise money for charities and good causes by deregulating incidental non-commercial, private society, work and residents’ lotteries. The order is being made under the Legislative and Regulatory Reform Act 2006 and is expected to come into force on 6 April 2016 subject to Parliamentary approval.

EEA regulators sign up to share information on eGaming regulators

The European Commission has drafted voluntary guidelines for EEA gambling regulators to sign up to with a view to sharing information about companies operating eGaming websites. The aim is to safeguard consumer protection and establish EU-wide legal standards. Signatories will share information on a range of issues including match fixing, money laundering and fraud.