UK Secondary Online Gambling Tax Builds Media Pressure

UK Secondary Online Gambling Tax Builds Media Pressure

Written by: ava carson on 23/02/2012 15:20

With the British government considering a new law that would require offshore internet gambling operators to require a UK licenses and pay UK taxes is causing a media stir.

According to an article in the Independent newspaper offshore gambling is estimated to cost the UK £300 million in tax revenue a year. 

The last major offshore sportsbook is ready to quit Britain if there is a failure to equalize tax paid by offshore operations with what UK firms pay.

Gala Coral’s chief executive Carl Leaver said he would find such a decision “sad” but warned his business was crippling against rivals.

"Right now there is no competitive advantage to being onshore other than, perhaps, securing a better relationship with racing and even that is debatable," he said.

Leaver is also annoyed that betting shops "which create jobs in the UK and pay rent on the high street" are crippled by taxes which "remote" rivals don't face.

"That seems a topsy turvy situation because offshore creates no employment," he told The Independent. "We want to see all offshore gaming taxed in the same way and at the same level as onshore. If not, then there is no way we could continue to see ourselves disadvantaged in this way."

Major firms like Coral and Bet365 are the two large firms that have not exported their gambling operation to Malta and the Isle of Man for lower taxes.

Ciaran O'Brien, corporate affairs director at Ladbrokes, told the newspaper: "We pay more tax than we retain in profit. The Association of British Bookmakers' figure for the industry shows that it paid £ 1 billion in tax and yet retained just £ 600 million in profit. We are working harder for the government than we are for ourselves.

"Let's say you set a very high tax rate. How would you enforce it? There will be a lot of people outside the net. The experience of the government here when they extended the gross profits tax at 15% (in 2005) was the death knell for any operators onshore."

Bodog CEO Patrik Selin said in the Independent his company was moving into the UK with the lowest betting taxes in Europe.

"All over Europe you are seeing a trend to make taxes on gambling higher," Selin said. "Different countries are doing different things to enforce this. Some are trying to get ISPs (internet service providers) to block gaming, others to get the banks to stop dealing with betting sites.

"The UK has the best tax. The lowest of all in Europe. There are benefits from being onshore too. You are more credible and there are more marketing tools, deals with newspapers, football clubs. It is also easier to employ talent."

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