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Uk Getting Tough With offshore online gambling companies
4/12/10 - UK Wired News reports that offshore online gambling companies wishing to maintain access to the British online gambling market must expect to pay the price to do so.
That price, according to the publication, will be 10 percent of gross profits paid into the UK horse racing levy.
The Labour government is poised to announce a crackdown on offshore bookmakers, the publication asserts, and much of that effort will be directed to closing the loophole that allows companies registered overseas to avoid contributing to the UK horseracing Levy.
The new measures would force offshore bookies to provide millions of pounds to help shore up the racing industry and tackle corruption in the sport.
Bookies may fare better under the Conservative Party, which is on record as saying that the Levy is "outdated", while the Lib Dems said Labour had failed to get to grips with the real issue.
Labour's pledge to raid the pockets of offshore bookies to bolster the Levy was timed to coincide with Saturday's Grand National spectacular at Aintree, the British gambling industry's most lucrative day of the year.
At the moment, only British-registered betting companies - both on and off-course, and including the Tote - have to pay the 10 percent tax, which the Horserace Betting Levy Board distributes with the goal of improving the ancient sport in Britain. More than half of the annual prize money offered in the sport in Britain is funded from the Levy, as well as a variety of other schemes and education programmes.
In 2009 the Levy made a GBP 4.5 million loss as British bookmakers William Hill and Ladbrokes both moved their online operations offshore . A William Hill spokesman said that the move had been made to avoid the 15 percent taxation rate on gambling profits in the UK which made it difficult to compete with other online gambling comapnies not so burdened.
William Hill spokesman David Hood, said: "When you take the 15 percent tax and 10 percent levy together, that's 25 pence out of every GBP1 we win going straight out of the door," but added that the company does pay the 10 percent Levy on all horseracing bets at its 2500 land betting shops in the UK.
In Gibraltar, where both companies relocated their online betting divisions, tax payments can be cut down to 2 percent or less.
The plans will be included in Labour's general election manifesto and will be implemented if the party is returned to power on 6 May.
The UK Secretary for Sports, Gerry Sutcliffe said: "These plans will also help protect British jobs by assisting British betting operators who to date have remained in the country and pay their fair share to racing. They will no longer face an uneven playing field."
Nic Coward, the chief executive of the British Horseracing Authority, said they would push whichever party comes into government to deliver on their pledges. "Everyone in British horseracing welcomes this firm commitment to ensure that the sport receives the fair return from the betting activity it generates," he said.
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