Government Considers Licensing Foreign Online Bingo Operators in UK

Written by Alex N. on 2011-06-11 at 13:21
British gambling laws - GamingZion
Online bingo in United Kingdom is about to undergo major changes. Until now, online bingo has been operating without a separate regulatory body and offshore online bingo operators could freely solicit UK customers yet avoid paying UK taxes. The British coalition government found time to deal with the issue now.

According to a source close to the government, there are plans to ban all advertising in the UK for bingo companies based offshore. Some experts say this move is intended to generate more tax revenues, while others regard the government’s plan as a preparation for a future tax hike on online gambling.

Under current British gambling laws only UK based operators require a license from Gambling Commission and share profits with the government in the form of taxes. This is the reason why so many operators providing internet bingo in UK have decided to be based offshore.

The high tax rates paid by brick-and-mortar bingo operators is making it difficult for them to compete against foreign based online bingo parlors which pay no taxes and thus are able to offer better comps, more tourneys and invest more revenues into advertising campaigns.

The proposed obligatory licensing by The Gambling Commission will also help prevent any unfair practices that many operators currently use. Problem and underage gambling will also receive increased attention with operators having to follow a strict set of rules in this regard.

The legislation changes however may cause the majority of bingo operators to close down, as they will not be able to pay high taxes and license fees. Currently the online bingo market is highly competitive and the proposed changes may well be the last straw for many boutique, small and struggling operators.

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