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03/21/2012 :  But the offshore industry could have a little elbow room before implementation
British Chancellor George Osborne made it official in his budget speech this afternoon - online gambling is defined as taking place at the point of consumption, and offshore operators accessing the British market can expect secondary licensing and taxation.
The Chancellor's statement was hardly a surprise on a topic that has been widely debated and discussed in both political hearings and the media for well over a year , but observers opined that Osborne's intent appears to be to bring major UK online gambling companies back to British shores.
In delivering his Budget speech, the Chancellor noted that he would be introducing double taxation relief for remote gambling from next month.
“Ninety per cent of online gambling consumed by our citizens is now supplied from outside the UK," Osborne said in his speech to the Commons. "And the remaining UK operations are under pressure to leave. This is clearly not fair – and not a sensible way to support jobs in Britain.”
He added that the change would help create “a more level playing-field and protect jobs.”
Treasury budget documents estimate that the impact of the change will be extra tax revenues of GBP 55 million in 2014-15; GBP 240 million in 2015-16 and GBP 270 million in 2016-17, the Financial Times reported, causing observers to comment that this indicated that the implementation of the new regime may take two or more years.
The Treasury said the move to a point-of-consumption regime was in line with several other European countries and would “broaden the tax base and provide a fairer basis for competition between UK and overseas remote gambling operators”.
Remote gambling operators will now be watching for details of taxation levels and secondary licensing procedures.
The Treasury document states:
"The current taxation regime for remote gambling has allowed operators to avoid paying UK gambling duties by basing their operations abroad. To broaden the tax base and provide a fairer basis for competition between UK and overseas remote gambling operators, Budget 2012 announces that the Government will move to a tax regime that ensures operators anywhere in the world pay gambling duties on gross profits generated from customers based in the UK. This is in line with the actions of several other European countries.
"2.146 Remote gambling taxation – The Government will introduce a consumption based taxation regime for remote gambling, subject to consultation on the detail.”

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