Secondary Licenses for UK Offshore Casinos OnlineBy: Joan Peppin, Thursday July 14th 2011
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A preliminary announcement made by the Government has been reported by the British media concerning greater regulation of offshore online casinos and gambling sites catering to customers in the United Kingdom. This issue has generated much debate in recent months because online casinos licensed in Britain pay much higher taxes than their counterparts licensed in other European jurisdictions. Major online gambling operators, like Ladbrokes and William Hill, originally licensed in the United Kingdom, have moved to more benevolent offshore jurisdictions causing losses to the Treasury. All through the week there was the expectation of an imminent announcement, which has finally been made.
John Penrose, the minister for tourism and heritage for the Department of Culture, Media and Sport, announced that legislation would be tabled on Thursday June 14 in the parliament. It entails the issue of a secondary license to offshore online gaming operators for which they will be required to pay a license fee. Specific details of the license fee were not revealed in the announcement. A new betting tax will be introduced, the details of which will be available after the proposed legislation is made public. Another possible move by the government that has figured in the debates is a ban on advertising in the United Kingdom by offshore gambling operators unless they hold a British license. In view of the mandatory secondary license, perhaps this restriction will not be required.
The Remote Gaming Association (RGA), a trade body representing the online gambling operators was the first to react to the announcement. Clive Hawkswood, the chief executive of RGA said, "Now that the Government has confirmed its intentions, we intend to play a constructive part in the process to ensure that the new regulatory and tax regime will provide an environment where Government objectives can be achieved; where the industry can succeed commercially in the global online gambling market; and where the interests of consumers continue to be properly safeguarded." Hawkswood admitted that most of the online gambling operators servicing the United Kingdom online gambling market are based offshore. But he pointed out that they already adhere to high regulatory standards which are comparable to those in Britain. Hence the issue is not regulation but taxation. A significantly higher tax burden could lead to an erosion of commercial viability or alternatively result in the online players paying more for their gambling pursuits. Hence the taxation policy in the new regulatory regime should be fair and sustainable. Hawkswood added, "We look forward to working with DCMS, HM Treasury, and the Gambling Commission to ensure that all of these issues can be successfully addressed."
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