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UK Gambling Bill Targets Tax Loophole

Tax revenue is the measure's main motivation.

A new UK gambling bill could shake up current licensing and taxation plans for bookmakers in a major way.

The Gambling (Licensing and Advertising) Bill would introduce a point of consumption (POC) tax on UK operators and require a UK gaming license for anyone accepting wagers in the UK. It’s all aimed gaming companies who base their equipment offshore to avoid paying UK taxes.

As it stands today, companies whose equipment is in the UK are taxed at 15% of their gross profits. Savvy shops, however, have found a neat workaround to that law. By basing their equipment in white-listed countries that are approved to do business with UK punters, they’ve been able to serve the British market, without all those pesky taxes.

The new bill, which has been released in draft form and should be getting a first reading this week, requires operators to pay taxes based on where the bet is placed, rather than where the server taking it is located.

If the new measure passes, operators who are licensed in white-listed countries will need to have a special UK license to action from British punters.

British lawmakers said that capturing lost tax revenue was the main motivation behind the proposed changes.

While industry trade groups like the Remote Gaming Association aren’t too keen on the plan, they did ask that lawmakers keep taxes at a reasonable rate so as to discourage black market wagering.

A second reading of the measure is scheduled for next week.

What kind of impact do you think this new legislation will have on betting shops and online sportsbooks? Share your thoughts in the comments section below.