UK Internet Gambling Operators Say Current Tax Policies Are Unfair
The United Kingdom has one of the most successful regulated internet gambling markets in the world. Instead of following the prohibitionist policies of many countries including the United States the UK chose to legalize, tax and regulate internet gambling. The move has benefitted the government which has collected millions, if not billions, in taxes from the industry. Tax policies related to internet gambling made the news recently after a group of onshore internet gambling operators in the UK complained that current tax policies are unfair to British operators. The executives say the UK government need to tax offshore operators to make the internet gambling business fair to all involved.
Gala Coral CEO Carl Leaver told reporters from the Independent newspaper “Right now there is no competitive advantage to being onshore other than, perhaps, securing a better relationship with racing and even that is debatable. “ Leaver said that UK taxes are putting his company at a highly competitive disadvantage. Leaver went on to say “That seems a topsy turvy situation because offshore creates no employment. 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.” Currently most internet gambling operators have moved their businesses like online bingo to offshore jurisdictions such as Malta, Gibraltar and the Isle of Man.
Gaming giant Ladbrokes also says the current tax policies are unfair. Ciaran O’Brien, the director of Ladbrokes corporate affairs says that his company pays a hefty tax bill while offshore operators pay little or nothing at all. O’Brien stated “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.”
Recently MP Matt Hancock introduced a tax bill that is based on the gambler’s location, not the location of the internet gambling operator. The bill will be read on March 30th. Hancock described his bill to reporters and stated “The Bill (would) bring the main offshore gambling platforms onshore by making it illegal for them to accept bets without paying tax and levy. It will be classified as a bet in the UK if that is where the punter is.” Not everyone thinks that British tax laws are unfavorable. Bodog CEO Patrik Selin told reporters “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.” It would appear that most British internet gambling executives disagree with Bodog’s Selin.
