UK Online Gambling Protectionism

June 16, 2011 | News Category: Gaming Law

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The United Kingdom has been a great place for online gambling companies to offer their wares, and while it will remain an excellent online gambling jurisdiction for those online gambling companies that are licensed in the UK, it is fast becoming somewhat less friendly to those that are licensed offshore, where taxes are lower.

The most recent veiled threat that has come out of the UK regarding online gambling is that those online gambling companies that are licensed offshore, and wish to continue to advertise their online gambling services to UK residents may have to begin to pay taxes in Britain.

Although it has not yet been confirmed, it is interesting that this kind of move has come within months of some of the larger online betting sites having left the United Kingdom, and moved offshore because of the much higher taxes that are levied in the UK, when comparing taxation levels to other online gambling jurisdictions.

The reports about this in the media have apparently been leaked by a "senior government source." The leaked news is that the British government has plans not only to ban offshore online gambling operators from advertising in the United Kingdom, but also to prevent punters from using UK credit cards on the websites of offshore online gambling sites.

The leak may have been intentional in order to see the reactions that would result if such a change takes place.

Those online gambling sites that are licensed in the UK have complained to the UK government that they pay higher taxes, and their rivals, who pay lower taxes offshore, are not only allowed to offer their online gambling to UK players, but also get to advertise in the UK, driving traffic to the offshore sites, and away from UK-licensed online gambling sites. This is the reason that a number of UK online gambling companies left the UK, and continued to operate from offshore online gambling jurisdictions.

At this time, the UK has a "white list" of online gambling jurisdictions that are acceptable, allowing the sites registered in these jurisdictions to advertise in the UK. There have been suggestions to stop using the white list, and to rather have some kind of secondary licensing for offshore online gambling operators. The secondary licensing would mean that offshore online gambling companies would be taxed in the UK, and would also make the companies somewhat under the jurisdiction of the UK Gambling Commission.

Although the rumors have not been confirmed or denied, it is likely that there is more than a little truth to them.