BRITISH GOVERNMENT MOVES ON ONLINE BETTING TAX REGIME
16th August, 2013 at 12:13:41
Offshore online gambling industry could be coughing up over £ 300 million
The British government published its long-awaited new online gambling taxation framework Friday, zeroing in on offshore companies wishing to access the UK market following its adoption of a point-of-consumption definition of online gambling.
Offshore companies servicing British punters are likely to be hit with around £ 300 million in taxes, observers noted. And non-compliance could carry jail sentences of up to 7 years, along with heavy fines.
The new rules will be supported by tough enforcement measures, including the creation of new criminal offences, and a requirement to take out secondary licensing with the UK Gambling Commission
(see previous reports).
Culture Secretary Maria Miller is expected to introduce legislation when MPs return to Westminster next month to ensure that every gambling website which has UK customers has to have a British betting licence.
Government spokesmen said that all online operators who work or advertise in the UK will have to have to have a British licence to ensure they participate in tackling corruption in sports, provide funding to combat problem gambling
and ensure adequate protection of children and vulnerable adults.
Online operators licensed in offshore jurisdictions but accessing the UK market will pay the same 15% tax rate as domestic remote-betting companies from 2014, levied on gross profits achieved in the market, which is believed to generate around £ 2 billion in revenues annually.
"It is unacceptable that gambling companies can avoid UK taxes by moving offshore, and the government is taking decisive action to ensure this can no longer happen," the country's Economic Secretary to the Treasury Sajid Javid said.
"These reforms will ensure that remote-gambling operators who have UK customers make a fair contribution to the public finances."
The shift will affect some of the industry's largest players, analysts predicted, naming Ladbrokes
, Bwin.Party, William Hill
who all have online casinos, sportsbooks and poker products and who are based in Gibraltar, where a more benign tax regime is offered to gambling companies.
Taxes on online casino gaming operations based in the British territory are levied at 1% on gross profit, with fixed-odds betting taxed at 1% of turnover. Both are capped at £ 425,000.
The industry has known that the initiative was coming for the past year or more, with some companies threatening to launch litigation against the British government as introducing laws contrary to European Union principles.
"We knew it was coming... the focus for us now is on trying to get the actual rate of the tax reduced," Clive Hawkswood, chief executive of the Remote Gambling Association said.
The British government is expected to confirm the 15% tax rate in next March's budget. Land gambling will be unaffected, according to a government statement.
Related News Tags: Uk, Gibraltar, Bwin, Betfair, Ladbrokes, Maria, William Hill