01/09/2012 : MORE EQUITABLE GAMBLING TAXATION SUGGESTED BY INDUSTRY EXEC
Rank plc chairman Ian Burke wants harmonised taxation of all regulated forms of gambling under one simple and fair regime.
You might say that the UK publicly listed gambling group Rank plc has a foot in both the land and online gambling camps due to its mix of products, but this weekend its CEO and chairman, Ian Burke, came out strongly in favour of a more equitable and harmonised tax regime for both, flying in the face of claims by other top industry execs that increases in online gambling taxation would do more harm than good.
Burke wrote an op-ed piece in the Telegraph to expound on his views, pointing out that the European Parliament has found that online and land gambling are competitors, and that legalization that favours one over the other amounts to state aid and is bad government practice.
"The report could have gone further and pointed out that a tax system (such as we have in the UK) that favours online casinos, bingo clubs and bookies (low levels of employment and regulatory oversight) to the detriment of their land-based equivalents (high levels of employment, highly regulated) was not just unfair, and potentially illegal, but just plain misguided," claims Burke.
The same point has been made to Britain's Parliamentary Select Committee for Culture, Media and Sport, which has in recent months been grappling with the problem, along with secondary licensing and taxation for offshore internet operators and trying to understand why UK gambling legalization has failed to deliver the economic benefits ministers had anticipated, he observes.
Burke argues that Britain's land-based gaming entertainment industry has the potential to boost employment and thereby contribute to the growth of the economy. However, he claims that it can only do this if the government brings to an end the ‘subsidies' provided to online gaming and harmonises the taxation of all regulated forms of gambling under one simple and fair regime.
Past gambling reform did modernise the industry and enable it to become more commercial, safe and responsible, Burke admits, but he is critical of the tax provisions, which he says appear to be designed to undermine rather than support the aims of the Act.
The Select Committee presents an opportunity to address these shortcomings and produce an Act that is "…more responsible to society, provides greater benefit to the economy and is better able to compete in the global market," he writes.
Burke contrasts the tax levels and efficiency of Britain's land gambling establishments with the company's online gambling competitors, who also target UK consumers but have no establishment in the country, and pay no UK tax on their online gaming income.
"The small minority of UK established online companies that offer bingo and casino games enjoy the advantages of a benign system of regulation and lower rates of taxation," Burke writes.
"There are similar inconsistencies from a regulatory perspective. At present, Britain's licensed casinos account for just 1 percent of the near 250,000 gaming machines in Britain today, despite being widely acknowledged as providing the safest environments for machine gaming to take place."
Despite his own company's dual involvement in land and internet gambling, Burke wrote to the British Treasury in 2010 to recommend the harmonisation of gaming taxation, even though this would mean that the Rank group’s online business would be subject to higher taxation, Burke reminds readers.
Since then, the UK government has signalled its intention to regulate and tax all online gambling taking place in Britain and Burke approves of such moves.
However, he warns that if such initiatives are undertaken in isolation, without consideration for the broader industry, then the government will have failed in its duty to provide protection for its citizens and to promote economic growth.
Burke concludes: "As it looks ahead to a challenging year for the economy in 2012, the government has an opportunity to get things right. It has an industry that (unlike many others) is willing to invest and to create skilled jobs; and it has the counsel of John Whittingdale's Select Committee and the European Commission to turn to for guidance. I hope that this time Government ministers choose what is right over what is politically expedient."