UK Online Gambling Chief Cautions On Tax

Peter Dean, chairman of the newly appointed British Gambling Commission did some straight talking aimed at the government's tax authorities in an interview with the Financial Times over the weekend.

Talking to reporter Matthew Garrahan, Dean warned that laws designed to modernise the UK gambling industry will fail to meet the objective if the Treasury sets a tax rate unattractive to online gaming companies currently based off-shore.

The government hopes that, under the Gambling Act 2005, betting businesses based in tax havens such as Gibraltar will relocate to Britain.

The Treasury has yet to set a tax rate for Internet gambling operators and Dean said companies would stay away if the rate was too punitive. "It behoves the Treasury to be mindful of the fact that we can't force companies to come here. The simple point is that if the [tax] rate is set at a level that deters companies from coming here then the Gambling Act 2005 will be frustrated," he said.

Referring to "the expectation of the government" Dean said this was that "operators will want to come here and will provide the British punter with an opportunity to gamble on the Internet".

But if operators did not relocate, punters would "not be able to gamble on a [web] site that is approved by the British regulator", he added. "It is up to the Treasury and the Department of Culture, Media and Sport to set the public policy but the consequences need to be understood."

The Gambling Commission has replaced the Gaming Board as the industry regulator in the UK. It will have a range of new powers, including the right to hit miscreant operators with unlimited fines.

Dean added that the new laws were appropriate to the level of gambling in Britain, saying the "fuss" over Las Vegas-style super-casinos in the run-up to the election was "overdone".