John Primrose, Tourism’s proposed amendments to the Gambling Act of the UK Government seems to be gathering a momentum among the government officials and online operators. With the pending changes in view, one aspect that he has brought forward is whether or not all operators from UK or abroad will be requiring the Gambling Commission licence to work domestically. It is estimated that around £1.7 billion which reflects roughly 18% of UK gambling revenues are spent by British population.
William Hill the famous icon in the UK online gambling domain, has recently put a commission in place to assess the implications of the taxes on the online operators through the audit, tax and corporate finance advisory firm Deloitte. The Deloitte report has found that a staggering 27% of the gains of the online gambling industry will be re-shuffled to unregulated markets should the 10% tax on the gross profits be implemented. It is to be noted that this rate will rise to 40% with 15% duty tax. The report has also concluded that 40% of the British gamblers will move towards the unregulated markets if the tax to internet gambling is enforced.
A report from The Daily Telegraph states that as per the findings of the Deloitte report, the tax implementation project might lead to a breach to “consumer protection policy objectives’ of the government and the marginal operators accounting to 13% of UK online bets will exit this domain with the 5% tax enforcement.
Online Operators have been using offshore territories to avoid the 15% UK tax. Some off shore areas currently being used are Gibraltar or the Isle of Man. According to the Deloitte report, if the UK government decides to go ahead with the Tax implementation proposal, there is a high risk of adverse effects on the profits of the gambling companies as well as the spending trend of the market. This report has as well stated that it could lead to an “‘adverse impact on the UK economy through reduced industry spend on its supply chain” on the British Gambling Industry which can generate £1.2 billion to £1.5 billion.
This is one sensitive issue that is currently making the headlines in the online gambling world and is still being analysed. It is quite sure that more important developments will take place in the coming months.
