Review of UK's online gaming firms comes under fire
Posted by Gavin Smith on 01 May 2009 at 13:05
Bookmakers have criticised UK government plans to review regulations on overseas-based internet gaming operators, saying they are overlooking the issue of taxation of offshore firms.
The proposals mean overseas companies who advertise in the UK could face new charges, if moves are approved by ministers.
The Gambling Commission and the Department for Culture Media and Sport are combining on the issue and are to review offshore gambling company rules including the possibility of introducing payments.
Quoted by Gambling Compliance, the chief executive of bookmakers William Hill, Ralph Topping, criticised the approach.
He said: "All this review does is kick the issue into the long grass.
"They’ve missed the barn door – they could take penalties for England.
"The tax regime for online and telephone is a huge competitive burden for UK-based bookmakers."
He said the most pressing issue was the way on shore book makers currently pay 15 per cent tax while gaming firms based offshore pay hardly any.
The government review will look into how to secure contributions from overseas operators, which would be used towards paying for regulation and the development of treatment for problem gambling. Cash could also be used for the Horserace Betting Levy.
Representatives of the remote gambling market say they were looking into the proposals and as yet knew little about the detail.
Quoted by Gambling Compliance, Clive Hawkswood, chief executive of the Remote Gambling Association, said: "Part of the reason for this review might be to rebalance the restrictions on the industry although I think they have made it hard for themselves.
"They have not given us a lot of details yet. Until we know what is behind it we do not know whether we are for or against it."
It is not yet known what the cost could be to offshore operators, but initial reports had suggested the bill could run into millions of pounds. The review is expected to be put before parliament by the end of this year.
Executives from the Department for Culture Media and Sport said the review itself would also check that rules brought in by the Gambling Act are being upheld.
Gambling Compliance also quoted the minister for sport, Gerry Sutcliffe, who highlighted the pace at which technology has developed since the arrival of the act.
He said now was the time to ensure the regulatory system is "as fair and robust as possible for all operators able to advertise their services in the UK".
He also said: "It is early days so I do not want to pre-empt the outcome of this work - but getting a fairer deal for UK operators and ensuring continued consumer protection are my top priorities."
Mr Hawkswood, according to Gambling Compliance, also said: "They want to commission more research. They want a better understanding of the remote gambling industry and how much income is going to onshore and off-shore and that type of thing."
He was spoken to by the Department for Culture, Media and Sport and told of how the organisation is approaching the review.
The Gambling Compliance report adds he was "100 per cent certain" that the Treasury would be involved and said "the elephant in the room" was the difference in where offshore and onshore firms stood in relation to taxes.
He added: "Firms would have to see some of the benefits to move back. People are not going to come back to the UK unless it makes commercial sense. One thing I think that would help would be better promotion of the gambling industry in Europe. When you compare what the British government has done compared with other countries, it is not very much."
The Remote Gambling Association also wants social responsibility contributions to remain voluntary and Mr Hawkswood added his organisation did not have an issue with social responsibility payments and that the online sector pays "more than its fair share".
The review is also going to look at issues such as match fixing and how the industry is looking to preserve the integrity of sport.
Since 2007 firms which hold licence in UK recognised licensing jurisdictions like Alderney and Gibraltar can advertise in Britain under rules which are run by the Gambling Commission. The series of locations have been branded 'white list countries'.
Mr Hawkswood added via Gambling Compliance that the survival of the white list is not a "forgone conclusion" and that there is the chance of a new licensing system for those looking to advertise in the UK.
