Report Shows Proposed U.K.Tax on Online Gambling Flawed

Published Tuesday, January 10, 2012 -

Online gambling has been legal in the United Kingdom for a long time now and has seen the industry grow in spades. The income generated by allowing online gambling and issuing licenses and gaining taxes from the past time has always been on the plus side and without too many problems the application has run smoothly. The introduction of the white label concept gave the system some solidity and strength which was welcomed operators who paid into the system and expected to be protected.

Recently the government has decided to take another look at its rules and tax policies and the new proposals are not getting a very warm reception from operators. The Treasury, which is reviewing a new tax regime for remote gambling has said its assessment of the tax system is to further its “consumer protection policy objectives”.

Bookmaker William Hill commissioned a survey by accountancy firm Deloitte which has pointed out the Treasury’s proposals for a point of consumption tax on online gambling will prove detrimental to both the consumer and the industry. The new tax would force smaller operators to leave the market and would send punters playing at so called illegal sites which give better odds and charge less tax.
The Daily Telegraph, also revealed that in the consumers in the United Kingdom currently spend about £1.7bn a year amounting to approximately 18 percent of total U.K. gambling revenues with online gambling operators.
The larger firms have their online gambling operations based in low tax jurisdictions and thus don’t have to pay the fifteen percent gross profits tax enforced in the U.K., Ladbrokes, William Hill, and Paddy Power are all funneling their wagers through Gibraltar and the Isle of Man. The online gambling industry is fighting back with facts and figures and will show the government they can’t be pushed around that easily.


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