Gibraltar Betting and Gaming Association (GBGA) has placed the government and Gambling Commission on notice of a claim for judicial review in response to the forthcoming place-of-consumption legislation.

The Association, which represents Gibraltar-based online gambling operators, says that the new regime, which would regulate UK remote gaming at the point of consumption rather than the point of supply and therefore require all online gaming firms to hold a Gambling Commission licence, “not only threatens the safety of consumers online but is unlawful”.

The GBGA believes the new legislation will be “unworkable” and, combined with planned tax changes, drive consumers to the unregulated or poorly regulated market, leaving them unprotected when they play and bet with foreign operators.

The Association said in a statement: “Currently, British consumers gamble online with a limited number of licensed operators based in a handful of recognised jurisdictions.

“Under the proposed new regime the UK is opening the UK market and consumers to operators based anywhere in the world and some of whom will not obtain a licence.

“The regime will effectively require the Gambling Commission to police the online sector on a worldwide basis.”

In letters to the Secretary of State for Culture, Media and Sport, Sajid Javid MP, the Attorney General, Dominic Grieve QC MP, and the Gambling Commission, written by legal firm Olswang on the instruction of the GBGA, it is argued that the new licensing regime breaches Article 56 of the Treaty on the Functioning of the European Union (TFEU).

The GBGA has placed the government and Gambling Commission on notice of a claim for judicial review to which they have 14 days to respond.

The new legislation, which is being introduced separately but also in parallel with a 15% place-of-consumption tax, is set to come into force sometime after 1 September as part of the Gambling (Licensing and Advertising) Act 2014, which recently completed its Parliamentary journey when it received Royal Assent.