Continued Debate on Online Gambling Tax in the United Kingdom


03/20/2012
By Maria McCoyGoogle

The British government has been compiling a proposal that would make it mandatory for offshore online gambling operators to acquire secondary licenses and pay taxes in the country. It has been estimated that the government is losing out on about £300 million in revenue a year.

The two top online casino games operators that have yet to move offshore are Gala Coral and Bet365. Carl Leaver, CEO of Gala Coral, stated that onshore betting taxes are stifling profits and do not provide any competitive advantage. Therefore the company is constantly determining whether they should move offshore. Leaver hopes for equalization of onshore and offshore taxation.

Ciaran O'Brien, corporate affairs director for Ladbrokes, an online casino games operator that has moved offshore stated, "We are working harder for the government than we are for ourselves." He pointed out that high tax rates would eventually bring in unlicensed sites. O'Brien advocated a reasonably low rate of online gambling tax to be applied at the point of consumption.

Matt Hancock, a Tory MP, has proposed a bill that would tax companies based on location of the online casino games player and not the location of the operator. This would take away the issue of onshore versus offshore. Penalizations for companies who do not follow the law include halting advertising in the UK and prosecution of operators if they enter the British market. The Department for Culture Media and Sport, which regulates online casino games in the United Kingdom, has expressed its eagerness for a Government sponsored bill as soon as Parliamentary time allows. Despite the desire for a quick resolution, it may be two years before online gambling is addressed on the Government's agenda. Because of the long wait period, if Hancock's bill reaches the committee stage, the ministry will support it with a few technical amendments.


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