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More British Bookmakers seek Maltese Gaming Licences

British online gambling laws

EU laws on online gambling

The Maltese System

British online gambling laws

British legislation on online gaming is haphazard.  Until last year, online bets were taxed at 6.75%, making online betting in the UK uncompetitive.  While gross profits are now taxed at 15%, the UK system lacks bad debt regime.

Also, UK residents are not prohibited from using offshore betting sites. While a clampdown seems to be taking place, most marketing is done on the Internet, out of the UK authorities’ jurisdiction.

While it is illegal to set up an online casino site operating from the UK, it is perfectly legal for a UK resident to gamble on an offshore site and for . offshore sites to be advertised.

Charity lotteries have become a lucrative business. While legally, a lottery ticket cannot be sold by a machine, which includes the Internet, there is a relaxed view by regulators as to what handling tickets with a machine actually means.

Also, UK National Lottery tickets are currently sold through established agents and not online, but this is changing.

The Budd Committee, set up in 2000, set out on a comprehensive review of gaming laws and regulations and, in its July 2001 report, made 176 recommendations, including:

  • the removal of the haphazard regime in the sector.

  • specific regulations for online gambling.

  • one gambling commission for the sector.

  • specific taxation of all online gambling.

  • ensuring greater checks, controls and regulation.

However, no decision has been taken by the British government with regards to these recommendations.  The recommendations state that remote gaming and interactive lotteries will be permitted. There will be no ban on offshore sites but marketing restrictions will apply.

A White Paper might be imminent, which will be followed by a consultative process. No legislation is expected to be in place before 2004 and more time will elapse before the Gambling Commission is set up and legislation approved. The UK will be lucky if its commission is operational by 2010.

EU laws on gambling

The EU presently does not regulate gambling and, in accordance with the EU principle of subsidiarity, EU Member States are free to regulate the matter at national level.  In fact, the EU welcomes Malta's approach to attract online gambling.

However, in a number of test cases, the European Court of Justice has held that the Treaty of Rome applies to the sector and further considers gambling as falling under free movement of capital.

Malta's recent comprehensive legislation on online gaming will take Britain years to emulate.  This, together with Europe's reluctance to legislate on the matter, gives Malta an edge over other jurisdictions.

The Maltese System

The Maltese government's economic strategy has placed Malta firmly in the e-commerce and e-leisure markets, exploiting a number of Malta’s advantages:

Tax advantages:

Other advantages:

  • a sound legal and financial system,

  • a sound ICT infrastructure,

  • legislation on betting and e-commerce,

  • strong regulatory bodies,

  • a graduate-working force skilled in languages and IT,

  • low-cost business accommodation,

  • good telecommunications,

  • low transaction costs,

The focal points addressed by the Malta Lotteries and Gaming Authority are:

  • despite low bureaucracy levels, to prevent Malta from becoming an "easy jurisdiction".

  • to provide clear guidelines for ethical behaviour and encourage responsible gaming and the protection of minors.

  • consumer protection, including providing for independent, third-party review of gaming programmes, and ensuring that the gaming operations maintain adequate financial resources to ensure payment of winnings, and also easily-accessible and inexpensive settlement of disputes.

  • to ensure that online operations continue to restrict access only to residents of jurisdictions which permit Internet gaming, ensure that effective mechanisms are in place to restrict access to those of legal age, and ensure compliance with legislation covering Internet and electronic transactions.

See also:

Malta International Trading Companies

MALTA - The Ideal Location for Betting Operations


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