UK Gambling Tax
Plans to change gambling tax in order to encourage online gambling companies to move back to the UK may not have the intended effect if online casino operator 32Red is anything to go by.
With the 2012 Budget coming up in the near future, the Chancellor of the Exchequer George Osbourne is in dire need of funds. MP Mathew Hancock is proposing that a change in the taxation of online gambling operators could partially solve the problem.
The Offshore Gambling Bill proposed by Hancock would raise £300 million and eliminate vast amounts of tax avoidance while in theory encouraging operators to move back to the UK.
However a change in taxation won't necessarily bring gambling companies back to the UK as 32Red's CEO Ed Ware explained at the end of last year to CasinoOnline.co.uk.
He said: "Economically it's always going to be a challenge to match up the UK with how we are able to operate from Gibraltar.
"I'd never say never but right now I think we have an established operation in Gibraltar that is flourishing and set to be here in the long run.
"Apart from the weather, Gibraltar holds many advantages over London, not least of which is the ability to actually get things done here and includes having access to Government both directly and through our industry association.
He also added that there were some benefits of being offshore that couldn't be matched:"Our offices enjoy views of the Tock of Gibraltar, the Bay of Gibraltar, the Straits of Gibraltar, Spain and Africa."
The subject of gambling tax and offshore operators was featured on Channel 4 News last night with Mathew Hancock and Ladbrokes' director of corporate affairs Ciaran O'Brien putting across their views.
Currently many online casino and other gambling operators are based in regulatory jurisdictions such as Gibraltar, Malta and the Isle of Man. This is due to the extra 15% tax that was created back in 2005.
Speaking last night, Hancock said: "At the moment 18 of the biggest 20 gambling businesses have moved offshore, there's arguments that the 15% is too high and I understand that.
"It would be good for growth to bring it all back onshore and create a level playing field."
Ladbrokes' O’Brien replied by saying: "It is already a very highly taxed industry, the important thing is that this is done in a sustainable way."
Although the bill was discussed in the House of Commons yesterday it's unlikely that it will have any effect on the upcoming budget with a new tax system sure to take some time to implement.
