Window for comment on UK gambling tax proposals closes soon

The British government’s controversial proposal to license regulate…and tax…online gambling operators based on the “point of consumption” – i.e. the punter’s computer or mobile device – enters a new phase on June 28 when the three month consultative window on the tax proposals closes.

Offshore operators wishing to access UK online gamblers will have to meet “secondary licensing and tax” requirements if they are to continue to operate legally in the UK market, and be allowed to continue to promote their services in UK media.

The new laws effectively seek to dismantle the traditional operator defence that remote gambling takes place on the operators’ servers, and if these are located in another jurisdiction, that jurisdiction’s law applies and not that of the UK.

Several large UK gambling groups have in the past based their online and mobile operations outside the UK in order to take advantage of more lenient tax requirements in offshore jurisdictions.

Under the new dispensation, the UK government is proposing a 15 percent tax on operators’ gross profits in respect of all bets placed with them by UK players.

According to government estimates, only 10 percent of online gambling activity by Brit punters generates tax revenues for the UK, and the new approach will address this anomaly.

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