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Gambling Laws Restructuring in UK and Ireland

By: Ryan Alders, Thursday March 3rd 2011
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In January 2011 it was reported that the UK government is looking to ask offshore online gambling operators, even from white listed jurisdictions, to obtain a British license and pay taxes at British rates. It was also reported that these changes were likely to be implemented by March 2011. Since the publication of this news the government has been conducting a consultative process with concerned parties and is likely to release the results by the middle of March.

The journal "This Is Money" carried a detailed discussion on the issue. It stated that the worst hit operators would be the British operators who moved to overseas jurisdictions in order to avoid the British tax rate of 15% and are now paying about 1%. Some of the operators have been named as SportingBet, PartyGaming, 888, William Hill and Ladbrokes. Though these operators save considerably in taxes, they are investing millions in promoting their product verticals like sports books, online casinos and poker rooms to UK gamblers. They do this through sponsorships and advertising. "This Is Money" argued that if these operators had to pay high taxes then the sponsorships and advertising would end and that would be bad for the industry.

"This Is Money" spoke to Ian Burke, chief executive of Rank Group. Burke said that many of the recently regulated online gambling markets in Europe were charging higher taxes and so it is natural for the UK to follow suit. He also pointed out that the immediate effect of this would be the disappearance of the weaker companies from the market. Some online casinos have a payout rate of about 97% so there is no room to absorb such a jump in tax.

The gambling laws in Northern Ireland have become outdated because of changes in industry practices and introduction of new forms of gambling like online gambling. Therefore the Social Development Minister, Alex Attwood, has proposed a comprehensive review of the entire gambling sector. Most of the issues are based on land gambling and lotteries. One very interesting aspect covers Sunday gambling. Under present laws gambling establishments have to remain shut on Sundays and the minister is seeking to change that. For online gambling the minister proposes to introduce a regulatory mechanism with a licensing scheme. Other areas in the agenda are keeping crime out, regulation and enforcement and problem gambling.

Attwood said, "My priority will be the public interest; striking a balance between developing gambling as a leisure pursuit and minimizing its harmful effects. I welcome views on creating a single licensing body with new powers to impose penalties on gambling operators for breaches of licensing conditions." He added that the next administration would make final decisions and promote the necessary legislation.

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