Potential Exodus of UK Online Casinos

August 06, 2009 | News Category: Casino Banking

0 Comments

Online casinos and other online gambling sites in the United Kingdom have recently complained about the inequality of taxes and levies that they have to pay when compared to foreign gambling operators who are on the UK White List and also advertise their online gambling sites to UK residents.

Although the relevant authorities have recently called a freeze on accepting new foreign gambling operators to the White List, and are looking into a way to share the taxation more fairly and evenly, some online gambling operators are not prepared to wait until decisions, and possibly changes, have been made.

It is likely that there will be somewhat of an exodus of online gambling sites from the United Kingdom to offshore online gambling jurisdictions. The first online gambling operator to make the move is William Hill. They are moving their online gambling operations to Gibraltar, where they will only need to pay a fraction of the tax that they were obligated to pay in the UK. The UK was taking 15% taxes on gross profits.

It is expected that other large, and possibly also the smaller online gambling operations based in the UK will soon follow suit and move their operations offshore to online gambling jurisdictions such as Malta, the Isle of Man and Gibraltar.

Other similar online gambling operators, such as Ladbrokes, have said that they will not be able to stay in the UK market if William Hill leaves it, since they would not be able to sustain the disadvantage of having to pay the high taxes in the UK once their competitors are only paying much smaller amounts offshore.

The Daily Mail carried a report in which a Ladbrokes spokesman said "Our preferred position is to remain in the UK but we have to remain alert to competitive developments."

There is a good chance that this move offshore by these major online gambling companies will encourage UK-based online casinos and other Internet-based gambling sites to more their operations offshore.

It seems that the UK government has stabbed themselves in the foot by greedily raising the taxes for online casino operators and other online gambling sites. The result of this move shows that although the tax collectors had expected to get high amounts of revenue through this high taxation, it now seems they may receive almost nothing if the expected exodus of online casinos leaves the borders of the UK in order to move their operations offshore. Not only have taxes been lost, but jobs that existed in the UK will now be given to others who are not UK citizens.