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NEWS 14 June 2017

Gibraltar legal challenge over remote gambling tax in UK falters before EU court

By Josh Fisher
A legal challenge over changes to the way remote gambling operations are taxed in the UK has faltered before the EU’s highest court.

In 2014, a British law was introduced which imposed a 15% levy on gambling operators for offshore bets placed by a ‘UK person’, regardless of whether those operators are based in the UK or not.

The Court of Justice for the EU (CJEU) was then asked to provide a ruling in relation to a dispute between the Gibraltar Betting and Gaming Association (GBGA) and the UK tax authorities. GBGA, representing Gibraltar-based gambling operators, argued that the law change resulted in double taxation and infringed EU law guaranteeing the freedom to provide services across the bloc.

However, in a newly issued judgement on Tuesday, the CJEU confirmed that, for the purposes of EU law, services provided by Gibraltar-based gambling operators to consumers in the UK are to be considered services delivered in the context of a single EU member state. This was not to say that Gibraltar formed part of the United Kingdom.

The court said: "It follows that the provision of services by operators established in Gibraltar to persons established in the United Kingdom constitutes, under EU law, a situation confined in all respects within a single Member State."

Gambling law expert, Audrey Ferrie of Pinsent Masons, said the judgement may well signal “the end of the road” for the GGBA’s legal challenge.

“The CJEU’s ruling acknowledged that Gibraltar is not part of the UK, but found that Gibraltar should not be considered to be an EU member state in its own right," Ferrie said. "Rather, it said its ties to Britain in EU treaties mean that, for EU law purposes, services provided by Gibraltar-based gambling operators to UK-based consumers should be considered as being delivered within the same jurisdiction.

“This cuts across the GGBA's complaint about the alleged obstacles to cross-border trade caused by the new remote gambling tax system in the UK."
RELATED TAGS: Legal & Regulatory
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