Just last year a government decision was taken to reassess the online bingo industry – in fact all offshore gambling concerns, in terms of the tax contributions in the UK! The general gist of it all, is that taxation is altogether too high in the UK for remote gambling operations; so, they operate these businesses from white listed jurisdictions such as Gibraltar, Alderney and so on. In fact another big British Gambling concern, has recently up-rooted is online operations to Gibraltar. They have all done this – William Hill – the lot. Problem is that these companies are also white-listed to operate in the UK and the department of excise wants their pound of flesh – these companies are getting their hands on very valuable British business.
Although nothing concrete has happened yet, the expectations are high that something has got to give, and changes are about to take place. Industry experts are divided about how this is actually going to happen.
A consultation process has to obviously take place – the UK is after all a very democratic society, which in this regard, cannot be said of the US. Operators are anticipating that the free taxation honeymoon is coming to an end – and we believe quite rightly so. The only thing is; because of the savings on tax – offshore operations manage to invest profoundly in advertising and sponsorship, so the money does come into the UK in a different way. But, still the Sheriff of Nottingham is knocking on their front doors.
We can only wait and see if new tax implications will be in the form of secondary licensing or some other vehicle. Ian Burke, Chief executive of Rank Group, agrees that change is coming and so do we! Gambling operators inside the UK pay 15% tax and for bingo this is even higher. Whether this will be the going rate or not, we also don’t know, but it will change the face of the industry. Not just any Tom, Dick or Harry will be able to sustain these tax rates, which effectively also diminishes competition.
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