gambling

Gibraltar is Angered by the Proposed Hike in the UK Gambling Tax

The proposed changes to UK regulations concerns Gibraltar gambling industry enterprises.

British gambling laws - GamingZion

Gibraltar online gambling industry is often associated with the British one, but is considered autonomous when it comes to financial trade and industries setting their own taxation regime. The proposed change in British gambling laws will see the 15% tax apply to both UK gambling firms and those registered in Gibraltar.

The Gibraltar gambling commissioner, Phil Brear, has already commented the proposed changes: “the tax would be clearly against the common sense logic of electronic commerce. We hear a lot of talk in the U.K. about a level playing field. But you can in fact never level the playing field between high street shops and online services.”

Currently about 60% of wagers placed at online sportsbooks in United Kingdom are made through Gibraltar sites. The existing level of taxes is only 1% in Gibraltar, and the new regime proposed by the Cameron government is to come into effect by the end of next year. It will also require all Gibraltar-registered operators to apply for a British license.

Ladbrokes Gibraltar head, Steve Buckanan, opined that the 15% tax will surely cause their profits to decrease significantly. He said: “it would place a huge unwanted cost on our business.”

However, it’s not just the tax on gambling activity, which will affect the operational costs in Gibraltar. The currently untaxed advertising and other essential services required for a successful gaming business to run will also become subject of levies.

Another example is Betfair, the operator of online bookies and online casinos in United Kingdom has just moved to Gibraltar in an effort to save as much as $30 million per annum, however, those savings will become questionable should the levy be accepted.

All in all, online gambling industry accounts for 15% of Gibraltar’s 2 billion dollar economy, and any change to it may cause serious trouble for the country. However, the British government is simply looking for an increased control over the industry, bagging a bigger share of profits in the process.

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