UK Government Issues Secondary Taxation

The UK government notified the British media that it’s contemplating a secondary licensing system. It targets foreign-based internet casinos that aims to advertise in the British market.

Justine Greening, Economic Secretary to the Treasury had the following to say: “In the best interest of all parties involved I’ll scrutinize the case from all angles when it comes to the implementation of a new tax law that’s not in conflict with John Penrose’s (gambling minister) proposal and taxing internet casinos based on player location as opposed to supplier location”.

In addition she said that an investigation is under way that will take into account the implications of other countries’ rules and that will ensure that UK internet casinos don’t pay double tax.

Based on analysts’ findings this might impact negatively on larger foreign based internet casinos such as William Hill, Ladbrokes and Betfair, since they’ll have to fork out GBP30 million pounds per year in gambling tax alone.

A statement was made by a William Hill plc spokesman on July 18 stressing that the company plans to engage in the affair and work closely with the government “to ensure that the review fully takes into account the commercial impact of any change before any decisions are made”.

On the other side of the coin the Isle of Man’s chief gambling regulator, Gart Kimber said that the United Kingdom’s secondary licensing plans should not be seen as a threat, with special reference to minister Penrose’s statement that foreign based internet casinos licensed in trustworthy ‘white-listed’ jurisdictions such as the Isle of Man will be treated “kindly” by the UK’s Gambling Commission inspectors. He confirmed that no duplication of regulation is on the cards, and that the IOM Gambling Supervision Commission remains the most important regulator for Isle of Man based internet casinos.

Pertaining to speculation that the move is linked to the Black Friday actions, Kimber said: “The secondary license issue has been discussed for a long time now. What prompted us to act is the amount of problem gambling taking place right now. After an extensive investigation the UK government uncovered many operators where not white-listed that operated in the various jurisdictions. This is not a personal vendetta against us.”

Economic Development Minister Allan Bell is another Isle of Man official who expressed his concerns on the matter: “I just spoke to Minister Penrose who has given me his word that the UK Gambling Commission has no intention whatsoever to duplicate the work that our Gambling Commission does in regulating internet casinos that operate on our soil.

“It’s clear cut from my representations on behalf of the Isle of Man’s internet gambling sites that these provisions are in accordance with the UK’s high standards.”