Gibraltar Suffers Setback in UK Gambling Tax Challenge
Gibraltar has suffered a setback in its ongoing legal battle against an EU tax. The Gibraltar Betting and Gaming Association (GBGA) has been fighting the requirement of the UK government that UK-facing online gambling operators must acquire a UK license before providing services to the UK.
The licensing requirements called for remote operators to pay a 15% “Point of Consumption” tax on the proceeds of gambling transactions with UK residents, including those with very liberal iGaming markets such as the Isle of Man and Gibraltar.
Thanks to the favourable tax rates in Gibraltar a number of operators have set up operations there such as Ladbrokes, William Hill Poker and Party Poker.
The GBGA has challenged the tax on the basis that it was in conflict with EU member states free trade laws.
Following a rejection and a successful appeal, the EU process calls for a review from an Advocate General before the European Court of Justice hears the case. While the Advocate General’s review is not binding it is essentially a recommendation to the EU Court.
This week the Advocate General Maciej Szpunar found that as a dependent territory of the United Kingdom, regardless of the legal merits or effectiveness of the GBGA argument, Gibraltar is not even a full member of the EU.
The GBGA’s challenge will still go to the European Union Courts of Justice but realistically Gibraltar will have a very tough job to persuade the judges that Gibraltar should be included in any EU free trade protections for participating states following the findings of the Advocate General.