Select Committee on Culture, Media and Sport Appendices to the Minutes of Evidence



Memorandum submitted by Interactive Gaming, Gambling and Betting Association (iGGBA)

  We are pleased to note that the CMS Committee is holding hearings on the Government's recently released White Paper on reform of the UK's Gaming and betting laws. IGGBA is the UK Association of I-Gaming companies representing the major operators in the country together with technological and component companies serving this fledgling industry.

  The purpose of this letter is to alert you to one major concern that we have regarding the existing proposals from the DCMS. This concern is with the timescale being suggested before these proposals enter into force law.

  It is estimated that the legislative calendar will prevent adoption of any new omnibus bill for gambling reform before autumn 2004. This delay will be further aggravated by the need to establish the new Gambling Commission who will then be charged with drafting detailed regulations overseeing our industry.

  We believe that this time frame ignores the market realities being presented to UK I-Gaming companies. At present, globally, there exist few places from which to obtain an I-Gaming license, which offers an operator a genuinely secure location from which to do business. The prerequisites for a secure base include, but are not exhaustive of, a wired and reliable Internet and mobile network, a sound financial system for banking and credit transactions, an open and responsible culture for gaming regulation and a strong history of good industry-government relations. Many jurisdictions offer fairly robust regulatory frameworks, but each one lacks at least one of the above variables. In this light, the recent developments aimed at reforming the UK legislation has offered companies hope that a developed, flexible and socially responsible framework for allowing I-Gaming can be put in place in the UK.

  However, many countries are beginning to realise the positive benefits of becoming a major centre for I-Gaming. Revenues of I-Gaming are predicted to be over 10 billion pounds by 2006 and of course these revenues represent a huge opportunity for governments to raise taxes. If UK plc fails to secure and retain first mover advantage this loss of potential tax revenue is unlikely to be recovered. Countries like the United States and Australia are beginning to see the advantages in creating a proper regulatory framework and legalising I-Gaming. The likelihood of those jurisdictions making I-Gaming legal before the end of this proposed legislative process in the UK are very real.

  Finally, the location and licensing of I-Gaming is not a proportional trade off. The UK will not see a portion of those tax revenues if the reform comes too late. It will simply watch as offshore jurisdictions take business away from UK plc. The I-Gaming train will have left the station!

  It has been stated in the DCMS response to the Gambling Review Body that the insistence of the House of Commons for a single piece of legislation has prevented the DCMS from considering any type of fast tracked enabling legislation for I-Gaming (point 2.2). iGGBA asks the Committee to reconsider this position in light of the substantial tax raising opportunities, which will be missed if we do not move quickly.

  We look forward to your reply and will be happy to attend any meeting or participate in any discussion you deem necessary to explore the contents of this letter in more detail.

30 April 2002


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