Britain’s top gaming regulator says new tax and licensing requirements for Web operators will ensure a “level playing field” and promote growth in the country’s massive online betting market, but a group of leading operators say they will take the new rules to court.
The UK Gambling Commission expects a surge in online revenues once the Gambling Licensing and Advertising Act 2014, passed by Parliament earlier this year, comes fully into effect.
The online sector, which currently accounts for 17% of the nation’s overall gaming market, saw revenues rise 22% last year as sports betting turnover surged 30% to £25.4 billion, a trend the commission says will continue once operators get comfortable with the new regime.
The act ended years of free-market policy by requiring operators to obtain UK licensing wherever they are based. It is tied to a key piece of companion legislation that imposes a 15% tax on all revenues generated in Great Britain.
Previously, the tax applied only to UK-based operators, while the last decade or so has seen most major British bookmakers relocate their operating divisions to Gibraltar and other tax havens to escape such levies.
Exchequer Secretary to the Treasury Priti Patel said the new system is “providing a fairer tax system for all gambling operators”.
“Those businesses that moved their operations abroad to avoid paying UK taxes will now have to pay their fair share of tax. The government has created a level playing field across the gambling industry so that all gambling by UK consumers is now subject to UK tax laws.”
Operators are not so sure, however, and in a recent interview, Peter Howitt, who heads the Gibraltar Betting and Gaming Association, a trade group that sued unsuccessfully in British court to defeat the legislation, says the country is becoming an increasingly unattractive one to do business.
“The way the UK has gone about recent changes to regulation and tax has destabilized the confidence in the UK for some operators,” he said.
He also said the association plans to mount another legal challenge to the act in 2015.
