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UK To Review Remote Gambling Tax Regime

by Jason Gorringe,, London

20 July 2011

The UK government has announced that it will review the case for amending the taxation regime for remote gambling following last week’s Department of Culture, Media and Sport (DCMS) proposal to make changes to the regulation of remote gambling.

In a written ministerial statement to Parliament on July 18, Economic Secretary to the Treasury, Justine Greening, stated:

“On Thursday 14 July, the Minister for Tourism and Heritage (John Penrose) announced that he proposes that the Gambling Act should be amended so that remote gambling is regulated on a point of consumption basis."

"Under this proposal all operators, whether from here or abroad, will be required to hold a Gambling Commission licence to enable them to transact with British consumers. I will review the case for changing the taxation regime in line with [DCMS minister] John Penrose’s proposal and taxing operators on the basis of customer location."

“Separately, other countries are also changing both their regulatory and taxation regimes for remote gambling. I will consider the tax implications of these developments. In particular, I will consider ways to prevent operators in the UK being subject to double taxation on remote gambling in the shorter term.”

Currently any gambling operator who wants to offer their services in Britain must be licensed or regulated in either an European Economic Area (EEA) state or one of the states approved by DCMS on the ‘White List’. However, the government says that the current system for regulating remote gambling "doesn’t work".

"Overseas operators get an unfair advantage over UK-based companies, and British consumers who gamble online may have little or no protection depending on where the operator they deal with happens to be based," said Penrose. "So our new proposals are an important step to help address concerns about problem gambling and to plug a regulatory gap, ensuring a much more consistent and higher level of protection for those people in the UK who gamble online," Penrose said.

UK bookmakers have for years been advocating a change to the UK regime, arguing that the current setup disadvantages domestic operators over their offshore counterparts. As a result, many operators have shifted aspects of their operations to jurisdictions that offer more conducive tax terms to companies, such as Gibraltar.

A comprehensive report in our Intelligence Report series examining the new possibilities that offshore e-commerce open up for business, and analysing the offshore jurisdictions that have led the way in offering professional e-commerce regimes for international business, with a particular focus on e-gaming, is available in the Lowtax Library at and a description of the report can be seen at
TAGS: tax | business | international financial centres (IFC) | offshore | internet | gambling | regulation | services

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