Tax challenge for online gambling

Monday, 06 July 2009 09:36

U.K. Online Gambling Operators Confront Tax Challenge

“Being based in the UK, from a tax perspective, is very expensive.” So says John Coates, chief executive officer of online gambling group Bet365. He added that the company did not currently have plans to relocate its sports betting business but that it was “very aware” what it would take to move offshore. Coates said the company was paying gross profits tax of 15%, a racing levy, non-recoverable Value Added Tax and corporation tax. This inevitably resulted in less profit. Two major online betting operators have indicated they are considering a move away from the U.K. because competitive organizations are benefiting from lower tax regimes in other jurisdictions.

Ralph Topping, chief executive officer at William Hill, said, “We are already an international business, with significant parts of our operations in different countries, and are expanding in terms of our overseas involvement. We view ourselves as an international business, and not just a bookmaker in the United Kingdom.
“But we are also a company in an industry that faces enormous challenges, particularly in the U.K.

“We face worldwide competition from 400 or more English-language betting websites. In these circumstances, clearly we do not have the luxury of being parochial about our future or taking a simplistic stance on complicated issues.”
President of the Racecourse Owners Association in the U.K. Paul Dixon calculates the Treasury stands to lose up to £45m a year in taxation if major bookmakers relocated offshore. “If this is going to be a great detriment to racing, then the government must do something about it or face the consequences,” he said.

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