UK online gambling tax setback

After last Tuesday’s international summit held in Britain, where the subject of online gambling was addressed, it appears as though the UK will face problems in trying to lure online gaming operators away from their offshore bases.

Tessa Jowell, the culture secretary, who has been very direct in criticising the U.S’s Unlawful Internet Gambling Enforcement Bill, hopes to make the UK an attractive location for online gaming companies to base their operations.

But John Healey, the treasury minister, has told tourism industry leaders that the government is encountering difficulties setting a tax rate that will sufficiently tempt online gambling firms away from their current tax havens, such as Gibraltar and Malta.

Online gambling firms save huge sums of money from operating in offshore locations, where they do not have to pay corporation tax or VAT. The government need to create an environment where it is commercially viable and advantageous for these companies to operate their bases in the UK.

As the UK seeks to regulate rather than prohibit, the new Gambling Act is set to be fully implemented in September 2007, giving the government a deadline of just under a year to finalise their strategy.

Possible solutions are being considered with John O’Reilly, head of Ladbrokes’ internet division, proposing that the industry pay a percentage of turnover into a fund to treat gambling addicts in return for a government kitemark, a symbol of trust and integrity.

'The UK has a reputation for being really well regulated not just in gambling but in financial services and other sectors. A kitemark is a benefit I would want to pay for.'

Editor, - 2006-11-06 13:12:16

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