For many years, Gibraltar has provided online gambling services to people living in the UK. Now, however, it is troubled by the new gambling tax rules currently being considered in Britain. Gibraltar, which more than a dozen online gambling companies call home, state that they think the proposed 15 per cent tax implementation on anyone living in the UK and Gibraltar is unfair.
The nation has long been autonomous where issues of monetary trade and industry matters are concerned, which also included the ability to establish their own independent tax system. Gibraltar’s gaming commissioner, Phil Brear, says that, “This new tax they’re proposing in Britain obviously defies common logic and goes against the best interests of e-commerce. He also stated that, “there’s a lot of words being thrown around about the United Kingdom being a fair and equal market. However, you can never even the odds between online trade and shops on the high street.”
Residents of Britain place roughly 60 per cent of their bets through websites based in Gibraltar. Right now, Gibraltar only pays a one per cent tax. The Cameron government’s 15 per cent tax is slated to become effective in December of next year, and it will also force any gaming companies located in Gibraltar to acquire a UK-issued license to run an online gambling business.
One Gibraltar online gambling operator, Ladbroke‘s Steve Buckanan, believes that instating this new and expensive tax could make a significant dent in the company’s ability to make a profit. He says, “This imposes an enormous and undesirable financial burden on our company and others.”
It isn’t just the cumbersome taxing of gambling itself that will impact the finances of Gibraltar gambling operators. It’s also the absence of taxes on other essential things for the online gambling industry, such as advertising.
The online betting company Betfair recently finished moving its services to Gibraltar in the hopes that they could save in the neighborhood of $30 million each year. Currently, Internet wagering makes up around 15 per cent of Gibraltar’s economy. The British government appears to be grasping for increased control over the UK online gambling industry. It may also hope to make a profit off of a ballooning industry that has started moving overseas to find shelter from the increased taxes.