UK Government Wants Lower Online Gambling Taxes

George Osborne is preparing to hand the internet gambling industry a multi-million-pound tax cut as part of a plan to bring offshore online gaming operators back to the UK. Years ago many online gaming operators moved their operations offshore after the imposition of a 15% tax by the labour government. The move has generated controversy and comes shortly after protests over the government’s failure to crack down on corporations avoiding taxes. Companies avoiding taxes include Starbucks, Google and Amazon. Fair tax campaigners have sharply criticized any new tax concessions to the internet gambling industry. Some protesters believe that online gambling is responsible for increases in gambling addiction and the suffering of children affected by a problem gambler in the family.

Seven years ago most large British online bingo and gaming operators moved their operations out of the UK after the 15% gambling tax was imposed. According to the Daily Mail the Treasury may slash the gambling tax by a third to recoup some of the £2.1 billion in revenues that the government has lost because of the high gambling taxes. Tax avoidance campaigners protested in front of Starbucks cafes across the UK despite the company’s pledge to pay millions in extra corporation taxes for the next two years.  The organizers of the protests, UK Uncut, say that Starbuck’s promise to £20 million pounds is “a desperate attempt to deflect public pressure’ from itself.”

This week a draft bill proposes a tax that is designed to bring the tax obligations of offshore operators in line with bookmakers based and licensed in the UK. Tax concession opponents point out that most EU countries impose a gambling tax of 20% or more. Germany and the United States have laws to discourage online gaming. John Christensen of the Tax Justice Network said: “it really doesn’t make much sense to lower the rate of taxation to try to bring them back to the UK. The tax rate should remain as it is.” Gambling expert Dr Mark Griffiths, director of the International Gaming Research Unit at Nottingham Trent University, told reporters “Online gambling exacerbates the problems associated with addictions because it is available 24/7 and 365 days a year.”

Currently 18 of the 20 largest betting companies who operate most of the 2,500 gaming sites targeting the UK use countries with favorable tax policies like Gibraltar to operate and market their services. Government officials say that the tax policy for online gaming companies is pretty much a done deal.  Hugh Robertson, the Minister for Sport and Tourism, stated “these proposals will ensure that British consumers enjoy consistent standards of protection, regardless of where a gambling business is based.”

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