A new UK gambling tax on remote gambling sites could radically shift the way bookmakers, and ultimately sports betting affiliates, do business with Brits. The consumption tax, which charges 15% on bets placed with offshore bookmakers will impact some of the biggest names in the business, including William Hill and Ladbrokes. (Both companies have servers based in Gibraltar.)
UK gaming regulators are looking to make as much as £300 million pounds ($467 million) by closing a loophole that allowed UK-based online bookmakers to base their operations offshore while enjoying a 1% tax on wagers. To add icing on the cake, the tax capped off at £425,000 ($662,000 USD).
How the big operators will react to the tax, which doesn’t go into effect until December 2014, is still up in the air. Some analysts are suggesting that the tax could shift the industry’s focus from the UK to Europe and Australia. (Sports wagering is taxed at 3%-4% in Australia.)
While it’s doubtful that William Hill will pull out of the UK market, it’s almost certain that the big names will protest the tax in some form.
Last year Girbraltar-based operators (which include England’s 10 biggest online gambling brands) banded together to form the Gibraltar Betting and Gaming Association to fight the tax. They’ve also suggested that the law could be in violation of European Union trade agreements because of the impact it would have on the Gibraltar economy.
UK lawmakers have warned that gambling operators who try to skirt the tax by licensing elsewhere could face serious consequences, including having their sites blocked.
Do you think this tax is going to have a negative impact on the UK sports betting business? Share your thoughts in the comments section below.