Posted on August 11, 2009 - by admin

Taxation Killing UK Gambling Industry

The UK gambling industry has just about had enough of the increasing levels of taxation imposed by our government and in order to survive are being forced to set up offshore. The countries with low gambling taxes are the ones that are expected to benefit from these moves and countries such as Gibraltar, the Isle of Man and Malta have been named as potential destinations.

Low gambling tax economies had before proven popular with betting organisations during the establishment of online casinos around a decade ago. There used to be a levy of 9% of the value of a bet that had to be paid to the government every time a bet was placed, and online this simply was not viable, so these online ventures were set up overseas in order to bypass the levy. The UK government, not willing to lose all taxation on these online operations, agreed to stop the levy and replace it with a 15% tax on profits rather than bets.

In these times of relative austerity as compared to the early years of this century, this 15% rate of tax has proven to be a heavy burden for the industry, and they feel that their hand has been forced. Competition with overseas online gambling operations that do not have to pay these levels of tax is proving to be the deciding factor.

The UK government is not too pleased about all this and consider themselves betrayed. This is vehemently denied by the industry which states that times have changed and the online industry has developed far beyond what people considered possible a decade ago. Neither the government not the industry were able to forecast the amazing growth of this sector, possibly fuelled by a booming economy and lots of disposable cash.

It is believed that the government is unwilling to take this loss of tax revenue lightly. Draconian reprisals and new taxes are anticipated, particularly with regard to slots and roulette machines.