UK Bingo Sites Facing Tax Changes

Recent bingo news reports indicate that the UK government is taking a close look into the possibility of taxing and regulating online bingo sites licensed outside the United Kingdom. Currently the government receives no tax revenue from the many offshore bingo sites openly operating in the UK. Bingo operators licensed in the UK say this puts them at a competitive disadvantage with offshore operations. Many offshore bingo sites are also allowed to advertise in the UK if they are on the government’s ‘white list’ of approved licensing jurisdictions. Many in the industry believe the situation is about to change.

Online bingo operators have always enjoyed a clear advantage over land based bingo sites in the UK because by locating their operations offshore they can afford to invest more heavily in advertising and marketing. They can also offer players bigger bonuses and promotions than sites taxed by the UK government. Most sites licensed in the UK pay a tax of at least 15% and most offshore operators typically pay a tax of about 1% if they pay any taxes at all. Even worse offshore bingo sites have full access to all media in the UK.

Most expect the UK government to recommend that all sites doing business in the UK will have to obtain a UK gaming license in addition to any other licenses from other jurisdictions. Industry experts say that this will have serious implications for offshore operators. Most likely the government will impose some sort of taxation and ‘secondary’ licensing costs.’ Most expect the tax rates to equal the 15% paid by bingo sites licensed in the UK. Rank Group chief executive Ian Burke believes that changes are coming and stated “Many European markets are moving to regulating and taxing online gaming and it’s inevitable that the UK government will look at changing the offshore tax regime.”

The effect of paying 15% as opposed to 1% could mean that larger online bingo operations could have a tax bill amounting to millions of pounds. Burke said that smaller operations could be hurt and stated “Weaker companies would disappear as their business model would no longer be sustainable.” Many major bingo firms such as Ladbrokes, William Hill and others moved offshore to avoid UK taxation but new regulations will erode the tax benefits leading many firms to relocate to the UK. The UK online gaming sector is worth about 1.5 billion pounds annually and some companies spend as much as 30% of their total revenues on advertising in the UK. Clive Hawkswood, the chief executive of trade group the Remote Gambling Association says a lot is at stake for many gaming companies. Hawkswood stated “Some online casinos have a payout rate of about 97 percent so there is no room to withstand such a jump in tax.,” said Hawkswood, opining that in order to survive companies may have to cut back dramatically on marketing, which has been lucrative for the UK media and sports industries”. The entire online bingo industry is watching developments very closely.

Online Bingo Reviews

Subscribe for Newsletter

We respect your email privacy
Read our privacy policy
Protected by Copyscape Original Content Checker
Visit Us On Twitter