Betting Firm May Get Its Wish Of Higher Manx Gambling Tax

by Robert Lee, Tax-News.com, London

18 June 2003

It's not often you find a firm imploring the government to raise taxes, but Isle of Man based online gambling firm Betinternet is confident of convincing the island's government to raise betting duty in the jurisdiction to allow it to advertise in the Untied Kingdom.

Under UK legislation, the Isle of Man is treated as part of the common purse for the purposes of setting rates of duty. Because the island's rate of betting duty has been reduced to 10%, lower than the 15% levied in mainland Britain, rules stipulate that the gaming firm is unable to advertise in the UK as it enjoys a competitive advantage.

Paul Doona, chief executive of Betinternet explained recently: "The Mirror Group which runs the Racing Post, the medium in which everyone advertises in terms of gaming, told us that if the duty was the same and both Customs departments agreed, it would be perfectly willing to take our adverts," according to the Isle of Man Online. However, Doona said that after talks with the relevant authorities, he is "very hopeful" that the tax will be adjusted to UK levels.

Though Doona observes that most of the firm's business comes from Far Eastern markets, the UK contains much untapped potential, and curently the UK accounts for 14% of the firm's customer base. "That's despite the fact that we can't advertise — so if that restriction was lifted there's a big market out there for us. The majority of the markets that we make are in soccer. So obviously with the premier league and everything else, that lends itself to the UK."

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