Potential legal challenge of place of consumption regulation of online gambling

United Kingdom

This article was produced by Olswang LLP, which joined with CMS on 1 May 2017.

The UK Government's proposals to introduce place of consumption licensing and regulation of online gambling are the subject of a potential legal challenge by the Gibraltar Betting and Gaming Association (the "GBGA").

The GBGA, an industry association for Gibraltar gambling operators, has sent pre-action letters to the UK Government and the Gambling Commission about the Gambling (Licensing and Advertising) Act and the associated Gambling Commission guidance. The new regime was introduced on the basis that it will protect consumers. The letters explain why the GBGA considers that it will in fact undermine consumer protection because the Gambling Commission does not have the necessary information gathering and enforcement powers. On this basis the new regime is said to be a disproportionate and discriminatory interference with the right to free movement of services under the Treaty on the Functioning of the European Union.

The GBGA argues that a more effective means to promote consumer protection was rejected by the Government without proper consideration or explanation. This proposal, called Passporting, would involve the recognition of reliable local regulators who would work with and share information with the Gambling Commission on a formally structured basis.

The GBGA's statement and the pre-action letters can be found here. The UK Government and the Gambling Commission have 14 days to respond.

Olswang, led by Head of Public Law Dan Tench and Head of Gambling David Zeffman, are advising the GBGA on the potential claim.