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Offshore Gambling Operators to be hit with New Taxes

  • 27 Aug 13
  • Written by Deena Chance

altAs you may have noticed, many of the online bingo sites which target British players aren’t actually based in the UK. If you were wondering why this is the case, the main reason is said to be that operators who base themselves offshore only have to pay minimal taxes on their profits. Tax havens such as Gibraltar have been extremely popular with both online casino and bingo sites, and many well-known brands such as Tombola, William Hill Bingo, and Ladbrokes Bingo currently enjoy tax levels of 1% which are capped at £425k. However, the UK government have been threatening for some time that they intended to crack down on this type of tax avoidance, and have recently announced that as of 1st December 2014, all gaming companies which are based outside the UK but target UK players will be subject to a 15% tax levy. The new taxes will come in the form of remote duty, pool betting duty, or general betting duty depending on the company’s main business. If any operator tries to avoid coughing up the duties, they run the risk of being hit with a prison sentence of up to seven years.

According to the Gambling Commission, the UK remote gambling market is worth over £2 billion per year, and the new tax system would raise approximately £300 million per year in additional revenues. The Economic Secretary to the Treasury, Sajid Javid, says it’s “unacceptable” that operators can avoid paying UK taxes by “moving offshore” and that the government is now taking “decisive action to ensure this can no longer happen in the future.” He added that the reforms will help ensure that remote operators who have UK customers make a “fair contribution” to public finances.

There’s been a noticeable increase in the number of gaming companies setting themselves up in tax havens such as Gibraltar over the past decade due to the rise of the internet. However, the Treasury wants all operators who do business in the UK to be able to compete equally, and that the new tax levies will enable this to happen. Understandably, many of the affected gambling companies are not so happy about the new rules and penalties, and Britain’s biggest remote operator, William Hill (who also own William Hill Bingo) are said to be considering their response, which includes the option of arguing that the changes breach European Union competition law.



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