ONLINE NEWS
UK Budget targets offshore iGaming T
he UK Chancellor of the Exchequer, George Osborne, announced in his budget that the government plans to change the rules on
remote gambling by implementing a point of consumption tax. The proposal would see online betting taxed at the point of consumption rather than at the point of supply and is intended to capture duty from offshore operators taking wagers from UK-based punters.
the customer is based, not the company.” It is expected that the HM Treasury will now begin a consultation period on how to implement Osborne’s plan, with the government likely to announce the new rate of remote duty in either the autumn financial statement or next year’s budget. Osborne also revealed that the government plans to increase the rate of duty charged on machines played in betting shops to 20% of net takings.
Following this announcement, Alison Sprague, “The current duty regime for remote gambling
introduced by the last government was levied on a ‘place of supply’ basis,” Osborne told the House of Commons. “This allowed overseas operators to largely avoid it and much of the industry has, as a result, moved offshore. Ninety percent of online gambling consumed by our citizens is now supplied from outside the UK and the remaining UK operations are under pressure to leave. This is clearly not fair and not a sensible way to support jobs in Britain. So, we intend to introduce a tax regime based on the place of consumption, where
Director and Economist at FTI Consulting specialising in Entertainment & Medi, said: “Many will be pleased to see that the Chancellor has addressed the remote, online gambling tax loophole which resulted in substantial revenue leakage out of the UK economy. By redressing the regulatory anomaly created by the Gambling Act 2005 the Chancellor has removed the incentive for companies to locate their gambling equipment offshore whilst still targeting the UK market. As is stood, the Gambling Act 2005 enabled companies from all over the world to market to the UK without a UK gambling licence as long as their equipment was located in a so-called ‘white-list’ of jurisdictions (currently Alderney, the Isle of Man, Tasmania, and Antigua) or the European Economic Area (including Gibraltar). In short, operators found that they could pay less, and typically no, tax (realising substantial cost savings) if they located their equipment in tax efficient white-listed jurisdictions, whilst maintaining a presence in the UK (typically their marketing
team). Not surprisingly there was a significant migration from the UK.”
Gareth Martyn, indirect tax director in PwC’s betting and gaming team, also released a statement, saying: “The introduction of a consumption tax on remote gaming had been widely predicted and will mean that duty is payable on all bets made by UK customers irrespective of where the gambling business is located. The government faces a number of challenges ahead of the introduction of the duty to ensure that it can be effectively administered. A similar form of duty is already in place in some mainland Europe states but it is interesting to note that the introduction of a similar regime in Ireland has been delayed for over a year.”
Boylesports to focus on online I
reland’s largest independent bookmaker has announced plans to separate its retail and online operations. John Boyle, founder and group CEO will continue to manage the overall business which has 176 retail outlets in Ireland. Under the new structure, Keith O’Loughlin will become CEO of Boylesports Online, with the responsibility to further the development of
Boylesports.com and related betting and gaming websites across mobile, web and all digital channels internationally. The move signals Boylesports’ intent to focus on establishing a foothold in new territories such as the Asian market. O’Loughlin will also be tasked with introducing new products and developing sub-brands such as
Boylepoker.com and
Boylecasino.com. Boylesports Online will continue to invest in the future and leverage its relationships with companies such as Playtech, GTECH G2, Cisco, EMC, Microsoft, Apple and Google, to continually improve their offering. This new restructure indicates a significant investment in its digital channels and will fuel the future growth and direction of the business. John Boyle said: “Now is the right time for us to restructure to ensure that both
40 APRIL 2012
the retail and online side of the business continue to grow. Our loyal shop customers in Ireland are very important to us, but we also need to consider our customers, and potential
customers, in markets further afield. We feel we can best cater to all by taking this action now.”
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