Opinion of the Advocate General on UK gambling duty: Gibraltar Betting and Gaming Association v HMRC

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

Advocate General Szpunar has today delivered his opinion on the questions referred by the English High Court in the judicial review brought by the Gibraltar Betting and Gaming Association (the "GBGA") against the extension of UK gambling duty to overseas operators.

The Advocate General's opinion is that:

1. The UK and Gibraltar are to be considered as a single Member State for the purposes of the application of Article 56 of the Treaty on the Functioning of the European Union (the "TFEU") which protects the free movement of services within the EU. The application of UK gambling duty to Gibraltar operators may therefore be considered a purely internal situation that does not engage Article 56.
2. Article 56 TFEU does not preclude the imposition of national measures with the features of the UK gambling duty. UK gambling duty is applied without discrimination and does not give rise to a restriction on the free movement of services. Article 56 TFEU may preclude a tax where it is charged at a prohibitive rate.
3. The issue as to whether the UK gambling duty is proportionate to reach its aims does not need to be decided but in any event is an issue for the English High Court to determine.

The Advocate General's opinion is not binding on the Court of Justice of the European Union ("CJEU") or on the English High Court. The next step in the proceedings is that the CJEU will issue its judgment on the issues which will then be binding on the English High Court.

Peter Howitt, the CEO of the GBGA, commented:

"We are naturally disappointed with the opinion of the Advocate General. We continue to believe that the gambling duty applied by the UK government to operators out of the jurisdiction, in circumstances where the customer may not be in the UK when they gamble or even a UK resident, is a disproportionate restriction on operators. We look forward to receiving the CJEU's judgment on the issues."

Olswang are instructed by the GBGA.