New Tax For Offshore Gambling Companies Operating in the UK?

Posted on March 26th, 2010

Ther are 2 types of casinso you can play at (broadly speaking) when you go online from the UK. A casino that is operating and licensed in the UK (such as Bet365) and those that operate offshore (the majority fall into this category including some big names like Ladbrokes and William Hill who have recently moved their operations to Gibraltar on the tip of Spain).

Companies operating offshore avoid the higher rate of taxation that they would have to pay to run these operations out of the UK. There have been complaints to the Department for Culture, Media and Sport regarding this , since those online gambling companies that are licensed in offshore territories, such as in the Alderney, Gib., and Malta have been able to promote their online casino and poker sites to UK players without paying the higher taxation that UK regulated companies have had to pay.

The Department of Culture, Media and Sport has launched a consultation on this issue (politics speak for a group analysing the issue). UK based online gambling operators are effectively operating with one hand tied behind their backs- the foreign operators have a “house edge” over their UK competitors as their costs are lower because of lower taxation levels.

Gerry Sutcliffe, the UK Sports Minister, said he is looking to address this unequal taxation for online gambling companies. He will be looking at the possibility of another tier of licensing for non-UK operators wishing to promote their online gambling sites to UK players.

The plan which is subject to a consultation period, is to have those online gambling operations that are licensed offshore to apply for a gaming license from the UK if they wish to operate as do now. The consultation period will last for 12 weeks. Those that want to respond to the consultation must do so by Friday, June 18th 2010.

Watch out! The tax man is looking under all the stones he can find to get the ballooning UK deficit under control. This will probably mean less incentives and bonus offers for players, but in principle we think this is fair enough. If some casinos are paying UK tax, they all should really be paying tax.

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