UK Considers Tougher Taxes And Licence Requirements For Online Gaming Operators

The UK government’s Department of Culture, Media and Sport recently signalled its intention to reform the country’s regulatory gambling structure, including requiring offshore gaming businesses to apply for a licence in order to advertise and operate within the UK market.
Gerry Sutcliffe, the U.K. Sports Minister, insisted any changes would be put in place in order to benefit domestic consumers and said: “Online gambling has changed significantly in recent years with many European countries taking new approaches to regulation. It would be wrong of us to stand still where many things are changing around us – especially where the protection of British consumers is at stake.”
Although Mr Sutcliffe highlighted the importance of monitoring closely any suspicious online betting activity, upholding EU software testing requirements, age verification and technical standards, other experts in the industry saw less altruistic motives for the government’s move. For instance, David Trunkfield head of gaming at PricewaterhouseCooper said, You don’t have to be too cynical to think that this is also going to be a way of raising tax.”
In the past, Gordon Brown had tried to raise the UK’s coffers by increasing the tax rate for internet gambling firms to 15% of gross profits. However, many online gaming operators, including Ladbrokes and William Hill, instead choose to relocate their businesses to “white listed” offshore tax havens, such as Gibraltar, the Isle of Man and Malta.
The UK is Europe’s biggest online gaming market, and the introduction of individual licences for online firms could indeed have a profound effect on regulating the industry. However, consumer groups have been cautioning against the government then trying to exclude online operators from the domestic market or directly or indirectly levying extra charges onto consumers at some future date.
A Treasury spokesperson, however,  rebutted the suggestion and said: “The focus of the Department for Culture, Media and Sport (DCMS) review was on the regulation – not taxation – of remote gambling … The Treasury will continue to work with DCMS to ensure that any implications for tax policy, arising from the proposals, are properly considered.”