The proposed UK point of consumption (POC) tax continues its march, unabated, as the Queen includes the Gambling (Licensing & Advertising) Bill amongst 15 other pieces of legislation during her pre-parliament speech.
The UK Gambling Bill made its way onto Her Majesty’s Most Gracious Speech ahead of the state opening of parliament on Wednesday. The revisions to the Gambling Act 2005 – otherwise known as The Gambling (Licensing & Advertising) Bill – were first drafted at the back end of 2012, with the main changes involving the introduction of a point of consumption tax (POC), and changes to licensing laws that will affect gambling companies that choose to do business in the British Isles, either from within these shores or moored somewhere beyond.
When the Gambling Act 2005 was first introduced many UK-based gambling companies climbed through the many holes that it contained and headed to offshore tax havens such as Gibralter and Alderney from where they carried out business as normal. Business that is about to change as the holes start to be plugged by a UK government that has had its attention seized by a potential £386m in annual taxes.
The changes now mean that any sportsbook, casino or poker site that wants to offer its products, or advertise through any medium in the UK, must do so only after being furnished with a UK Gambling License. The official word is the need to provide UK Consumers with protection against the nasty illegal goings on in the world of gambling, but the whole world knows it’s purely for the love of money. Gambling is a burgeoning business and the government are staring it right in the face with spittle drooling out of the side of its mouth.
Owners of a shiny new UK Gambling license will also be required to participate in thorough schemes to help those who fall into more troubled gambling waters. Companies will have to dig deep into their pockets to provide additional contributions towards research and education into gambling related problems.
The other Tyrannousaurus size bone of contention is the introduction of the POC. There is still no news regarding the actual price of pain – leading everyone to recoil at the thought of the rumored 15% – but almost every affected gambling company has voiced their displeasure, and worry, over the size of the potential fee citing figures of defectees to non-licensed gambling institutions in the 30% mark.
The Gibraltar Betting and Gaming Association (GBGA) are one entity not taking the changes lying face down with their hands tied behind their back. The GBGA have written to the Department of Culture Media and Sport committee to say that it will challenge the changes in the European courts, and they aren’t messing about either with a reported £500,000 set aside for the expected legal confrontation.
The 10 biggest online betting operators in the UK manage their business from the likes of Gibraltar, The Isle of Man or Guernsey as a result of the introduction of the Gambling Act 2005, a decision that is believed to have cost the UK taxpayer in the region of £1bn in tax avoidance.
The likes of William Hill, Ladbrokes and Betfair are responsible for employing one in eight Gibraltarians. William Hill officials have been quoted as saying that the new POC tax rate should be no more than 5% and that the proposed changes in legislation, ‘breach fundamental EU principles of freedom of establishment and free movements of service.’
The concerned companies now play a waiting game before the UK government finally releases the number that everyone is now waiting for.