The Isle of Man Treasury has this week released details of the amendments it intends to make to the Online Gambling Regulation Act 2001, dealing with the collection of taxes on general betting, and the taxation of international betting and gaming via the Internet.
The goverment plans to collect on-line gaming duty as a percentage of gross yield, defined as the total amount of all bets or stakes made, less the value of all the winnings and prizes due.
The Manx Treasury will introduce two statutory orders, approval for which will be sought in the island's parliament, Tynwald, in June. The first order will cover the preparation of licences (fees will be set at £80,000 per annum and the application fee at £1,000) to be granted under the new law and will establish the yield-based duty. For on-line gaming, there will be a single rate of duty of 2.5%. This rate will apply to all such business irrespective of where the person playing the game is based.
The second order will reduce the current rate of duty for domestic betting from 6% to 2% of the amount staked. This new rate is roughly the equivalent to a 10% rate based on gross yield. For international bets the rate will remain at 0.3% of the amount staked.
Since the UK Chancellor's budget speech announcing a reform of the UK betting system, the Isle of Man is awaiting confirmation of the UK's legal position on the betting tax. When it becomes clear how the UK are adapting their law and the impact it may have on the island, the Manx Treasury says will make any necessary further orders.
The Treasury Minister Richard Corkill said of the changes: 'By taking appropriate and prompt action now, we have removed the uncertainty attached to the future of Island-based businesses operating gaming on the internet. We have also on behalf of the betting industry maintained a competitive environment for all bookmakers licensed and situated in the Isle of Man.'
He added: 'We note that the United Kingdom has indicated its intention to reduce its betting duty rates by more than half by the end of the year. In the Isle of Man the Treasury has considered its position and decided that there is no reason for Island residents to wait any longer.'
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