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UK Indicates Tougher Enforcement of Gambling Levies

The UK government’s Department of Culture, Media and Sport this week announced proposed reforms to the regulatory gambling framework, including provisions to clamp down on off-shore operators escaping taxes such as the UK Horserace Betting Levy. 

Sports minister Gerry Sutcliffe announced that all operators who want to target British consumers must be licensed by the EU Commission. Government officials have been keen to stress that the decision is based on protecting British consumers by enforcing requirements that operators report suspicious betting patterns, comply with EU software testing requirements, age verification, self-exclusion and technical standards. Leading firms already have strong records of social responsibility, so legally enforcing these standards should not significantly impact the industry.

Yet industry experts were less optimistic about the government’s motives. PricewaterhouseCooper’s head of gaming, David Trunkfield, said, "You don't have to be too cynical to think that this is also going to be a way of raising tax."

No poker or casino websites currently conduct their business through a Gambling Commission licence or pay any tax to the UK, a situation that has been attributed to Gordon Brown’s move as chancellor to set the tax rate for internet gambling firms at 15 per cent of gross profits. Industry spokesman described the rate of tax as punitive, but it has so far failed to enhance the government’s tax revenues given firms have opted to operate out of “white listed” offshore tax havens, such as Gibraltar, the Isle of Man and Malta.

Until now these zones allowed firms to advertise in the UK while avoiding levies, but with the enforcement of licences from the Commission, this situation looks certain to change.

 A spokesman for Mr. Sutcliffe conceded that the proposals were informed by other successful reforms in European countries. Last year Italy introduced gambling licences for all online poker and bookmaking sites, setting business tax ranging from two to five per cent. The Italian government has subsequently seen tax revenues rise across the industry.

The Right2bet campaign agrees with Mr. Sutcliffe’s assessment that the Gambling Act is among the best regulatory frameworks in Europe, given the open competition it permits between organisations, offering the consumer the greatest possible value and choice over operator. The Italian licensing system has seen permits restricted against leading operators with strong commitments to consumer standards. The Right2bet campaign hopes that the UK does not follow suit by blocking operators from the market, or burden consumers with extra charges passed on from the high tax regime.

 The Right2bet campaign continues its pursuit of an open gambling market across the EU.  The petition can be found at www.right2bet.net



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