News Blog

March 26, 2016, 1:06 pm

Gambling operators based outside the UK to be subject to UK regulation by 2014

Three years ago I wrote about proposals on the part of the UK government to introduce legislation to tighten up the access that gambling operators based outside the UK have to UK customers - see my Online gambling in the UK set to be tightened up article.

These proposals are now set to come into law next year, and they focus on the large potential income available in taxation as well as the protection of UK consumers from disreputable operators. As reported in The Daily Mail:

High street bookies like William Hill, Ladbrokes and Corals have all located the online parts of their business offshore in tax havens like Gibraltar in order to reduce costs. But from next year betting firms who take money from punters in the UK, online or on the telephone, will be liable to pay gambling taxes on the profits from those customers even if they are based overseas.

Depending on the type of gambling offered, remote gambling operators with UK customers will be liable to pay either remote gaming duty, general betting duty or pool betting duty, all of which are currently taxed at 15 per cent.

The Gambling Commission estimates that the UK remote gambling market is worth over £2bn per year. Treasury officials calculate that the new rules will bring in approximately £300m per year in additional tax revenues.

Government officials say that requiring all online operators which work or advertise in the UK to have a British licence will ensure they participate in tackling corruption in sports, provide funding to combat problem gambling and ensure adequate protection of children and vulnerable adults.


Clarifying the above comment on the opinion of government officials, Reuters quotes Economic Secretary to the Treasury Sajid Javid:

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 will ensure that remote-gambling operators who have UK customers make a fair contribution to the public finances.

I'm glad to see that what amounts to a loophole in its taxation affairs that the industry has substantially benefitted from for the last twenty or so years is now being closed. I remain skeptical that there will be any advancement of consumer protection - the UK Gambling Commission, when seen in action, has been underwhelming in the extreme. But at least the industry will now be paying its fair share.