By Alex Tanner
24-03-2005 10:19 AM
Related: Analysis Gaming
ANALYSIS: Online gaming trade body iGGBA has withdrawn membership from The Gambling Federation in a noble act of self-policing. But with a general election looming and time running out for the new legislation, gambling regulation faces a toothless future.
A general election date of 5 May looks evermore certain, following the results of an ICM poll published in the Guardian this week that show Labour eight points ahead of the Conservatives, their biggest lead since December.
The chances are, then, that the Gambling Bill - that long developed and scrutinised piece of legislation - will not be passed, despite all those assurances from the DCMS that the timetable was sound.
The reason is simply that the Government appears to have run out of time. In recent election years, parliament has been dissolved roughly 30 days ahead of the proposed election date. If 5 May is indeed the date, and the simple fact that not a single MP appears to be briefing otherwise indicates that it will be, then parliament will be dissolved on Tuesday 5 April.
Considering Easter takes place this coming weekend, that would leave a total of six working days to get the bill out of the committee stage, back for a third reading in the Lords and then back to the Commons for MPs to vote on any amendments.
Of course, the Government could make the bill a priority and force it through. The main bone of contention now lies with the cap on regional, large and small bricks-and-mortar casinos of eight each.
The cap has been widely criticised by Britain's casino industry, which argues that it favours overseas operators and is therefore uncompetitive. Such a development may also be a breach of the Treaty of Rome, but the Government rather sneakily claims it has got this angle covered and, anyway, the cap will be reviewed in six or seven years.
There are no prizes for guessing how long an EC ruling on the issue would most likely take.
However, Blair has his eyes on more pressing issues such as the Prevention of Terrorism Bill and the ID Card Bill, to name but two, and if Labour is going to muscle legislation through it is likely to be those closer to the PM's heart rather than a bill that, however long overdue, is more likely to be a vote loser.
This means that the Gambling Bill, the passing of which would make the UK the first first world country to licence and regulate online gambling, could well run into the sand.
The online gambling industry has been remarkably silent on the pros and cons of the bill sitting, as it does, in a win-win situation. With the bill, operators will be free to relocate and licence their operations in the UK which, in the Gaming Board (soon to be Gambling Commission
has one of the most well-respected regulatory bodies in the world. This will, some say, confer upon them a higher status that will firstly offer access to cheaper borrowing rates and, secondly, give them the opportunity to work with certain blue-chips that have to date shied away from gambling and the potentially negative image it can create.
Without the bill, however, the loss of these slightly intangible benefits will be offset for most operators by not having to pay tax or suffer any significant regulatory burden.
But there are losers if the bill does not go through and they are the government, the taxpayer and the players themselves.
According to iGGBA (the Interactive Gaming, Gambling and Betting Association) the UK stands to lose out on £2bn-worth of inward investment if the bill is held up. There are, says iGGBA, some 225 companies looking to relocate to the UK should it become law, operating in a market that is worth £6bn a year and growing fast.
So the Chancellor loses out and so, subsequently, do UK taxpayers who will be asked to make up any shortfall to the Treasury gambling revenues would have helped reduce.
But the real loser is the player. Financially the player is hit twice as the games he plays, due to their fixed-odds nature, cannot be affected by the imposition of a tax. The odds and payouts on, say, roulette, will not change because the government has imposed a gross profits tax of 15% on online casino games - that comes purely out of the operator's pocket.
So for the billions spent by the player not a cent will make it into a single school, hospital, police station or barracks. And assuming the player is also a taxpayer he will have to fork out for this oversight like everybody else.
But more importantly, he will not be certain that the sites he plays on are operated by trustworthy, reliable companies. The games could be rigged, the monies could be used to fund practices of questionable legality, fly by night operators could set up and close down in a matter of months.
Self policing is not the answer. The announcement today from iGGBA that it has thrown out the Gambling Federation - which only joined in November - for intentionally embedding malware (malicious software) in customers' software is noble but, essentially, the action lacks teeth.
The Gambling Federation is keeping its head down; its official response to the development is simply that it understands and respects iGGBA's decision. Clearly the company can do without the bad press. But just how badly does a slap on the wrist from iGGBA penalise them compared to, say, the loss of their licence and a hefty fine courtesy of the Gambling Commission.
And had the Gambling Federation chose not to relocate to UK shores, well, what a great advert for UK licensed companies that would be.
With this bill the Government has, essentially, gambled with the fortunes of every citizen in the UK, and it's a gamble it appears it is about to lose.
In spades.
has one of the most well-respected regulatory bodies in the world. This will, some say, confer upon them a higher status that will firstly offer access to cheaper borrowing rates and, secondly, give them the opportunity to work with certain blue-chips that have to date shied away from gambling and the potentially negative image it can create.
Without the bill, however, the loss of these slightly intangible benefits will be offset for most operators by not having to pay tax or suffer any significant regulatory burden.
But there are losers if the bill does not go through and they are the government, the taxpayer and the players themselves.
According to iGGBA (the Interactive Gaming, Gambling and Betting Association) the UK stands to lose out on £2bn-worth of inward investment if the bill is held up. There are, says iGGBA, some 225 companies looking to relocate to the UK should it become law, operating in a market that is worth £6bn a year and growing fast.
So the Chancellor loses out and so, subsequently, do UK taxpayers who will be asked to make up any shortfall to the Treasury gambling revenues would have helped reduce.
But the real loser is the player. Financially the player is hit twice as the games he plays, due to their fixed-odds nature, cannot be affected by the imposition of a tax. The odds and payouts on, say, roulette, will not change because the government has imposed a gross profits tax of 15% on online casino games - that comes purely out of the operator's pocket.
So for the billions spent by the player not a cent will make it into a single school, hospital, police station or barracks. And assuming the player is also a taxpayer he will have to fork out for this oversight like everybody else.
But more importantly, he will not be certain that the sites he plays on are operated by trustworthy, reliable companies. The games could be rigged, the monies could be used to fund practices of questionable legality, fly by night operators could set up and close down in a matter of months.
Self policing is not the answer. The announcement today from iGGBA that it has thrown out the Gambling Federation - which only joined in November - for intentionally embedding malware (malicious software) in customers' software is noble but, essentially, the action lacks teeth.
The Gambling Federation is keeping its head down; its official response to the development is simply that it understands and respects iGGBA's decision. Clearly the company can do without the bad press. But just how badly does a slap on the wrist from iGGBA penalise them compared to, say, the loss of their licence and a hefty fine courtesy of the Gambling Commission.
And had the Gambling Federation chose not to relocate to UK shores, well, what a great advert for UK licensed companies that would be.
With this bill the Government has, essentially, gambled with the fortunes of every citizen in the UK, and it's a gamble it appears it is about to lose.
In spades.