Duty May Scupper Ladbrokes-888 Deal
Published: Friday, March 23, 2007 Online-Casinos.com
TAX RATE COULD SCUPPER LADBROKES - 888.COM RUMOURED DEAL
GBP 470 million on-off negotiations impacted by Brown's 15 percent tax decision
The much speculated upon acquisition talks between Ladbrokes and 888.com will almost certainly be impacted by the high 15 percent tax rate on Remote Gaming operators announced by UK Chancellor of the Exchequer Gordon Brown this week, reports the ThisisMoney site.
The two companies have been in on-off talks for months, with 888 looking for a strong parent to shelter it from legal problems in the US where internet gambling financial transactions have been banned under the Unlawful Internet Gambling Enforcement Act. But the tax levels announced yesterday give it little incentive to leave its Gibraltar tax haven.
Analysts say the 15 percent rate is too high to be attractive enough to lure online gambling operators to British shores. Mark Summerfield of KPMG said: "Why would they do it? They clearly can't get a legal opinion that would allow them to leave the litigation behind and they'd have to start paying 15 percent tax."
Other analysts have pointed out that combined with other UK taxes, online operators could end up paying up to 43 percent in taxes - way above the rates many are accustomed to in more industry-friendly jurisdictions.
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