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European online gambling website operators will enjoy a huge advantage over their rivals in the UK according to a report in UK Marketing Week.
Warwick Bartlett, a gambling industry consultant and former chairman of the Bookmakers Committee, says the UK Government's tax policy for gambling companies has gone "horribly wrong".
His comments come as he prepares to launch a global gaming report, called Change is on the Cards, later this week.
So what's the problem?
From UK Marketing Week:
"The report, from his consultancy Global Betting & Gaming Consultants, predicts that a Europe-wide gambling policy will be implemented. This will mean that players are taxed under the laws of the country they live in rather than the country the operator is based in.
"Bartlett, who also sits on the Horse Racing Betting Levy Board, says UK operators have seen their online presence diminish relative to those operating offshore. He says this was "inevitable" following government failure to impose a competitive tax rate.
"The report claims that UK companies will continue to lose market share, and points to an existing deal between the Government and operators that allows the repatriation of UK sports betting websites from offshore so as to achieve gross profits tax as being "unsustainable". It says foreign websites are able to reinvest the tax saving in their offering and "scoop" the market."
John Hagen of Harris Hagen believes that Great Britain has the infrastructure in place to regulate online gaming effectively, but, as he points out, the exorbitant tax rates have deterred most online gaming operators from relocating to Great Britain.
"The decision of the British Government to impose a 15% gaming tax on the gross profits of online gaming operators appears, unfortunately, to have been made for political reasons and has undermined the new regulatory regime.
"This tax, which is in addition to the usual array of taxes, including corporation tax, has made Great Britain uncompetitive."
Jagajeet Chiba, Gambling911.com
