UK Online Gambling

March 23, 2013

Currently, online gambling is semi-legal in the UK. By this, we mean that certain sites are legally licensed to provide online gambling services to UK citizens, and are closely regulated. This has resulted in a nice revenue stream for the UK, in the form of gambling tax. However, experts now fear that much of the potential gambling tax income is being lost to offshore gambling sites that are not legislated by the UK. These sites feel that the gambling tax in the UK is too high, so attract UK citizens to play at their unlicensed offshore gambling sites, thus sidestepping UK gambling tax.

Because of this situation, the UK Government is considering slashing gambling tax for online casino operators by up to 30%. It is estimated that around £2 billion in gambling tax revenue has been lost for the last seven years in a row, due to offshore gambling. It is hoped that this reduction in tax level will encourage more online casino operators to become fully legal within the UK, and pay their fair share of tax.

Within the UK, the online gambling market is thought to have grown by more than £20 billion in just the last year. So we can see why the UK government is keen to start picking up tax on this, even at a reduced rate.

Seven years ago, when the UK put its current gambling tax structure in place, many of the larger online casino operators simply moved their operations to offshore havens such as Malta and the Channel Islands. This didn’t stop UK players using them; it did stop the UK government taxing them. It is unlikely that any reduction in gambling tax will attract these companies back into the UK. They are firmly established where they are.

It is the newer online casino, the new startups and the international companies looking to launch a localized online casino site that will be tempted by the lowering of UK gambling tax. We don’t see this being an overnight recipe for magically producing billions of pounds of tax revenue overnight, but in the long run, this could work well for the UK.

Of course, for us the UK online gamblers, it is also good news, as it is likely some of the savings from a reduced tax level will be passed on to us, although probably not an awful lot! But then again, every little helps!

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