The online gaming arm of Stanley Leisure, a leading UK company in the online-betting market, has not had a good first year in Malta if reports of a loss of around £1.4m are anything to go by.
In recent years a number of UK-based betting companies have abandoned British shores to set up Internet gaming websites in low-tax jurisdictions which charge just a fraction of the UK's extortionate 9% betting tax. Malta has been a popular destination for such operations not least because Malta's income tax rates are low. Stanley Leisure Electronic Sports Betting was launched last year as the first company to be granted a licence to operate in the online betting market in Malta.
However, Stanley Leisure’s chief executive officer Bob Wiper has told the media that his company is currently running at a loss and expects two more years of losses, which could add up to over £3m per year, before the online operation will break even.
But it appears that Stanley Leisure can easily sustain the losses as its major operations - casinos and bookmaking - continue to increase their profits - last year they rose by 27% to £10.3m. Mr Wiper said: 'The internet attracts a fundamentally different type of gambler. Our average bet in the betting shops is £5.50. The average online bet is £70.'
The online betting industry has been waiting with bated breath for a cut in the UK's betting tax since last November's pre-budget speech by UK Chancellor, Gordon Brown, who stated: 'The Government's objective... has been to assess the scope for a modernisation of General Betting Duty that would deliver a business environment in which the British betting industry can compete in both the domestic and international markets ... the Government believes there is scope for a modernising reform of General Betting Duty to deliver this objective.' But the government is now keeping its cards close to its chest and until the Spring budget, any word on whether or not the tax will be reduced, abolished or remain the same is mere speculation.
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