Point of Consumption Tax Changes UK gambling laws
Big changes are coming to the UK gambling laws from December 1st 2014, with the introduction of a Point of Consumption Tax which will see remote gambling operations taxed 15% for every bet placed online in Britain. The legislation has already proved unpopular with gambling operators and is said to be responsible for several operators closing, including the popular Bingo Joy brand which will cease operations on 11th September 2014.
The new tax is expected to bring around £300 million into the UK governments coffers, but it is already being challenged by a group of gambling operators including well known bookmakers Victor Chandler and UK online casino 32 Red. The GBGA (Gibraltar Betting and Gaming Association) are seeking a judicial review. Companies which offer gambling activities to UK residents will also be required to be licensed in the UK, whether or not they are currently licensed in a “white label” jurisdiction. Operators fear that this will lead to a “black market” type of operation where unscrupulous companies operating on the other side of the world would be able to offer bets at preferable rates, leaving consumers vulnerable to unregulated and unlicensed operators.
There are also concerns particularly for the economy of Gibraltar, in that the new rules may prompt existing businesses which are licensed and operate in the jurisdiction to relocate to the UK. The gambling industry provides a boost to the economy of Gibraltar and there are fears that a mass exodus of gambling firms to the UK could lead to unemployment and financial losses.
Leading operators Ladbrokes and William Hill have chosen not to challenge the new rules, although they have expressed concern about the upcoming changes. A statement issued by William Hill reads
“As the UK’s leading operator, William Hill has chosen not to challenge the Government’s decision to impose dual regulation on the online gambling industry.
“However, our original concerns regarding the distortive effects on the market and the inadequacy of enforcement mechanisms, remain. Our message to Government would be to strike the correct balance between overlapping regulation and enforcement by setting an appropriate tax rate which encourages full compliance without damaging businesses”.
You can find out more about the proposed legislation and the summary of consultation responses at
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/229993/remote_gambling_summary_of_responses.pdf
