British gambling law needs to be updated, say parlamentarians

The long awaited report of the UK parliament’s Commons Culture, Media and Sport Committee says that the Gambling Act 2005 resulted in numerous inconsistencies, is not sufficiently evidence based, and that more power should be devolved to local authorities.

The wide-ranging report focuses primarily on the land gambling business in the United Kingdom, but also deals with internet gambling and the question of a point of consumption tax

Gambling laws are “outdated” and “ill-equipped” to deal with social and technological changes, MPs on the committee opined.

The failure of the Department for Culture, Media and Sport to work with the Treasury and set remote gambling taxation at a level at which online operators could remain within the UK and regulated by the Gambling Commission has led to almost every online gambling operator moving offshore whilst most are still able to advertise and operate into the UK, the report notes.

It supports the concept of better regulating the online industry on a point of consumption basis but says the Treasury still needs to work with industry stakeholders to establish the correct level for online gambling taxation, taking into account the need to encourage companies to accept UK regulation and taxation and to discourage the formation of a grey market.

The UK Gambling Commission is unlikely to be pleased with the committee’s view that it is “….an overly expensive, bureaucratic regulator.” The Committee says the Commission has not gone far enough, in particular, in its efforts to reduce its operating costs.

The Committee recommends that an independent review of Gambling Commission expenditure should be carried out as soon as possible after a new system for remote licensing is in place, with a view to reducing costs and the regulatory and fees burden imposed on the industry

The committee recommends that the Department for Culture, Media and Sport should develop an information campaign on problem gambling, to be made available outside gambling premises, to encourage the relatives of problem gamblers to seek help.

It also points out that the hard evidence base for decisions and regulation needs to be improved. The government must ensure that high-quality, independent research, comparable over time, is available to be able assess the scale of problem gambling and the impact – if any – of changes in regulation.

There should be specific research on problem gambling and children, and a greater emphasis on discovering the most effective ways of educating children about probability and the risks of gambling.

Rules to protect vulnerable groups should be rigorously enforced, it stressed.

Most of the findings deal in detail with land gambling issues, with the important point made that the decision as to whether a casino would be of benefit to a local area or community should be made by local authorities rather than by way of “central diktat”. It recommends that any local authority be able to make the decision as to whether or not they want a casino.

John Whittingdale MP chaired the committee and said:

“Gambling is now widely accepted in the UK as a legitimate entertainment activity. We took a lot of evidence in this inquiry, from all sides, and while we recognise the need to be aware of the harm caused by problem gambling, we believe that there is considerable scope to reduce and simplify the current burden of regulation and to devolve decision-making to a more local level.

“However, given how emotive an issue gambling is in many quarters, there is a worrying lack of proper research to inform policy: this is something that needs to be addressed.

“The ‘reluctantly permissive’ tone of gambling legislation over the last 50 years now looks outdated.  It is also inadequate to cope with the realities of the global market in online gambling, and even seems ill-equipped to cope with the realities on our high streets.

“Our general approach in this report has therefore been to support liberalisation of rules and delegation of decisions to those closest to the communities that will be affected.”

Summarising the committee’s recommendations, it opined that:

* Online gambling taxes set at “correct level” to encourage offshore firms to return to UK

* Lower licence fees for independent bookmakers

* A new public information campaign on problem gambling

* Review of Gambling Commission’s budget to reduce overheads

The casino industry’s evidence included the proposition that modest changes to existing regulation, such as “harmonising” the number and type of gambling products, could increase jobs and tax returns without any new outlets opening.

“The availability of gambling on the internet now renders many of the restrictions on land-based casinos irrelevant,” said Malcolm Moss, chair of the National Casino Industry Forum.

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