By Samantha Williams
Top online casinos in the UK have had an incredibly easy life up till now, and although the free ride is not over yet, things could be changing soon. These ‘things’ could be a taxing problem! It is not easy to understand online gambling licensing jurisdictions for the UK, but I am going to try and simplify it. Online, real money gaming in this country is legal, but the rate of tax for gambling operations is prohibitively high. So, years ago in 1994 when the UK National Lottery was established; this paved the way for all kinds of legal gambling activities, but also for the British Government to get their hands on their share of the loot, through the vehicle of tax, which is quite normal .
Then, came online gambling, and operators in this industry fast learned that the UK Gambling Commission, although a fantastic licensing jurisdiction – was also prohibitively expensive in terms of tax – 15% prohibitive in fact! The UK being a member of the EU, meant that top online casinos could license their wares offshore, in tax shelters such as Gibraltar, Malta, Alderney, Isle of Man, and others. But, still advertise to sell their wares in the UK, while paying offshore tax rates of something stupid like 1%.
EU offshore licensing jurisdictions enjoyed the freedom of almost instant White Listing, which also allows the freedoms of free trade principles. Any operators licensed in non-European licensing jurisdictions such as Kahnawake, Antigua, Curacao and so on, do not enjoy White Listing status. Many top casinos companies have even moved their UK business to Gibraltar; for example, William Hill, Betfair, Littlewoods and so on. None of this big UK business is licensed in their own country for online gambling operations!
Realizing that they should get their share of this massive potential for excise, the British Government is waking up to the fact that top online casinos, even if they are licensed offshore, should have a secondary license to ply their wares to a UK facing audience – which is only fair as far as I am concerned. You want to do business in a country; you should have to pay the price, especially if that business is generating billions of pounds in revenue! There are 36 million adults in the UK, who have had some sort of flutter this year!
After years of getting away with paying no tax, and pretty much no dues at all for tapping into the gold-mine of UK gambling business, non-domiciled operators are going to find things changing for them, and not before time. If land casinos and other gambling businesses in the UK, have to pay 15% tax; the principle is that if offshore ops also have to pay licensing fees and tax, then, all operators can get away with paying less.
How would the UK govern this? Well…this is another taxing problem, but Italy and France are doing it, and we have the technology. It’s a simple matter of making it illegal for those offshore operators to take wagers, the US DoJ has just done this with the biggest online poker sites in the US!
Needless to say the UK is not painting this as another tax grab – although I think they should be honest. They are supposedly changing regulations as a way in which to improve customer protection…but let’s call a Spade a Spade!
