Offshore Gambling to Cost UK GBP 300m in Tax Revenues
Feb 27, 2012
The UK is set to lose up to GBP 300m in offshore gambling tax revenues.
The United Kingdom is set to lose up to GBP 300m in potential tax revenue after the two remaining onshore sportsbooks may indeed quit Britain, if the British government does not equalize the the tax paid by offshore sportsbooks with what UK firms pay at home, according to the latest casino gambling news.
The move is said to come after the Gala Coral group felt it is unfair to charge different levels of tax: higher at home than abroad. Under the current tax rules, Gala Coral doesn’t feel like they have the financial clout to compete with their offshore competitions, due to the tight tax laws, which they fail is “crippling” them.
Only Gala Coral and Bet365 remain as the major firms based inside the United Kingdom, following other online sportsbooks successful move abroad to escape the higher taxes. Now even Gala Coral are considering whether or not to abandon ship and make the move away from Britain. A move that could see the UK lose as much as GBP 300m in lost tax revenue.
Tory MP, Tony Hancock feels as though the situation could be solved by leveling the tax charges at the customers location, instead of the bookies. Hancock’s idea is that taxes would be based on whether or not the gambler lived inside the UK, or whether they were abroad. In short, it does seem as though it would solve the issue of differing taxes for onshore and offshore companies.
Speaking more on the matter, Mr. Hancock commented: “The Bill (would) bring the main offshore gambling platforms onshore by making it illegal for them to accept bets without paying tax and levy. It will be classified as a bet in the UK if that is where the punter is.”
When asked how it would concern those firms who refused to make the switch, he added:”They would be illegal. Of course you have to make enforcement effective, ban their ads, and their executives wouldn’t be able to come to the UK without facing sanction.”
Mr. Hancock has also expressed recently, that the levies for bookie’s shops spread across the UK, which employ thousands of people, also need to have their taxes reduced. Mr. Hancock stated that the charges put forth onto the bookies is crippling them just as much as the onshore sportsbooks, because like them, they cannot compete with other offshore online gambling sites, including online casinos and sites dedicated to online blackjack.
At present the majority of the best of the UK’s online sportsbooks have remained relatively silent on the matter, with only Ladbrokes speaking out recently about why they have moved offshore.
“We pay more tax than we retain in profit. The Association of British Bookmakers’ figure for the industry shows that it paid Ј1bn in tax and yet retained just GBP 600m in profit. We are working harder for the Government than we are for ourselves,” said Ciaran O’Brien, Ladbrokes corporate affairs director.
Mr. Hancock’s approach may be the favorable option for both bookmakers and online sportsbooks, but whether or not it will indeed see many offshore sportsbooks return to the UK, and create more jobs in onshore bookies shops, remains to be seen.
Tags: Association of British Bookmakers, Bookmakers, corporate affairs director, finance, Gala Coral, Gala Coral Group, GBP, International taxation, Ladbrokes, Offshore company, Offshore finance, offshore online gambling sites, Offshoring, Online blackjack, online casinos, Online gambling, online sportsbooks, Onshore, Person Travel, Sportsbook, Tax, Tony Hancock, Tory MP, United Kingdom