Could Challenging the UK POCT Have Dire Consequences for Bookmakers?

The introduction of the UK’s Point of Consumption Tax in December has met objection from bookmakers; but the vocal resistance could limit their possibilities elsewhere.

As of December 2014, all online and mobile betting operators based outside the UK who are selling their services to UK residents will be forced to pay a 15% tax under new legislation.

The introduction of the new regulations has caused many providers, who moved their businesses to offshore locations to avoid high taxes, to publicly voice their disapproval over the move.

Larger businesses, such as William Hill, have pointed out that the move may see smaller operators abandoning the UK market altogether; an unintentional positive for the bigger operators.

Despite this, stronger operators are less than pleased with the changes being made to the UK market and may look to offer their services in the US.

Don’t rock the boat

In February a collection of Gibraltar-based online gaming operators collaborated as a part of the Gibraltar Betting and Gaming Association to create a ‘fighting fund’.
This fund initially consisted of £500,000 which will presumably be used to pay for lawyers should the operators in question continue go through with the threat of mounting a challenge to the reform under EU law.

William Hill has been among the more vocal companies that have spoken out against the tax with CEO Ralph Topping promising to fight the tax.
The argument against the POCT is simply that the changes are unlawful according to EU, national and international law while the proposals also violate the European Charter of Human Rights and discriminate against non-UK entities.
However, due to the current turmoil regarding online American gambling laws, the US may be reluctant to sign agreements with companies that are taking regulators of other jurisdictions that they work with to court.

The steps taken by companies now must be carefully thought and plan for the future.