Internet gaming companies that have been operating offshore have been beating the tax man in the United Kingdom, say officials, but there now is an end in sight.
Under rules published last week and reported by Reuters, Britain plans to tax gambling activity where the customers are based and not on where the operator is registered. Once implemented, this will result in offshore operators paying the same 15 percent tax as domestic companies.
Sajid Javid, Britain’s Economic Secretary of the Treasury, was quoted as saying, “It is unacceptable that gambling companies can avoid UK taxes by moving offshore, and the government is taking decisive action to ensure this can no longer happen.”
“These reforms,” he added, “will ensure that remote gambling operators, who have UK customers, make a fair contribution to the public finances.”
Affected by the tax change will be well-known companies such as William Hill, Betfair, bwin.party and Ladbroke’s, all of which operate out of the tax haven, Gibraltar.
An executive with the Remote Gambling Association was quoted as saying, “We knew it was coming. The focus for us now is on trying to get the actual rate of the tax reduced.”
It was estimated that the new tax will bring in something in the vicinity of a half-billion dollars annually.
Ray Poirier is the longtime executive editor at GamingToday.
Contact Ray at [email protected].