A move to lure Britain’s online gaming companies back to their homeland by slashing tax rates from 15% to 10% is under consideration by the government.
Britain’s largest Internet gambling companies are headquartered in offshore locations to avoid the excessive 15% tax that was instituted in 2005. A draft bill being circulated will lower that tax rate to conform with the rates currently seen by bookmakers now regulated in the UK, according to reports.
Current estimates list lost revenue by the Treasury at roughly £2.1 billion since the 2005 mandate that prompted 18 of the 20 largest gambling companies who run about 2,500 Internet gambling sites to avoid the UK and base their operations in regions such as Gibraltar. The Treasury also estimates that a 5% cut would allow those companies to save £100 million each year.
Opponents to the reduction in tax point to the fact that other EU countries currently employ tax schemes sometimes higher than 20 percent. Also, countries such as the U.S. and Germany have severe restrictions on online gambling.
In addition to reducing taxes, the bill aims to give the Gambling Commission tighter control over such problem areas as match fixing and online betting scandals.
“These proposals will ensure that British consumers enjoy consistent standards of protection, regardless of where a gambling business is based,” said Hugh Robertson, Minister for Sport and Tourism.