Britain’s goal to turn into a world center for online gambling operations has been entitled into question with the revelation that existing UK online sports books are thinking about moving abroad.
The UK government had wished that its new regulatory surroundings, which will propose online casinos and poker room’s licenses in exchange for meeting customer defense conditions, would have the added profit of tempting operators to move to British ground.
While many internet players are situated in low-tax havens like Gibraltar, Alderney and the Caribbean, it was thought that having a British stamp of support or kite mark would be measured a precious marketing tool to increase the trust of new clients all over the world.
It was supposed that existing UK online sports wagering firms would take the chance to send back their businesses, which before could not be UK-situated.
With online gambling already valued over pounds-5 billion a year globally, and projected to increase to pounds-12.5bn by 2009, there are important potential job and tax income profits. But proof is mounting that these aspirations will not be made because of the UK’s uncompetitive business surroundings.
In a reversal of fortune, some British medium-sized online sports books have hired Global Betting and Gaming Consultants (GBGC) to investigate the merits of moving offshore.
GBGC founder Warwick Bartlett, who is currently the chairman of the Association of British Bookmakers, said that it is simply far cheaper to operate elsewhere.
Internet sports books presently pay 15-per cent gross benefits tax.
“There are several companies I’m speaking to that are based in the UK and are thinking about leaving, ” stated Bartlett.
“You can go to a place like Antigua and pay a fixed sum per annum. There’s no benefit in being here. A lot of these companies have developed brands that consumers find very credible, no matter what jurisdiction the company is based in.” Bartlett’s assertions are backed up by the Association of Remote Gambling Operators (ARGO), a London-based industry body representing online gambling players with business interests in the UK and the EU.
Clive Hawkswood, general secretary of ARGO, stated: “There are UK- based internet companies that are looking into leaving. There are probably a half dozen sports books looking at it.” He stated that better firms, who have wagering shops and portals, have mainly been held back from leaving as they did not wish to break a “gentlemen’s agreement”, made with the government in 2001, to stay in exchange for a more positive 15-per cent gross profit tax on wagering. Hawkswood stated: “Newer online and telephone betting operations, where the balance of their business is tipping more towards online casino or poker, aren’t as worried about that.” The chance of attracting big name internet casino brands to move to Britain also looks more and shakier. Some firms like Gibraltar-based 888.com, are reserving judgment until the Treasury sets out the gross benefits tax rate for online casinos later this year. Though, a Europe Economics report stated in March that anything over 2-per cent would be a non-starter for attracting executives. Bartlett, though, said that he got a “general feeling” that abroad gamblers would still be put off by Britain’s high corporation tax, VAT and labor costs.
A spokesperson for PartyGaming, the online poker business planning a pounds-5 billion flotation on the London Stock Exchange, stated: “We don’t have any intention of moving onshore back to the UK. We are very much established in Gibraltar. It’s where our servers are and we have a very good relationship with the regulators there.” PartyGaming paid a corporation tax rate of 6-per cent in 2004 matched with the 30-per cent rate in England. It is understood the firm thinks it will be able to bring greater shareholder incomes if it stays abroad.
Jun 01