UK gambling industry expands as new regulations come into force
A new set of regulations that require offshore gambling operators present in the UK market to pay tax are to come into force today.
Under the regulations, taxes will shift from being based on where services are supplied from to a ‘place of consumption’, meaning that no matter where a remote gambling operator is based, they will be liable to the taxes if they offer remote gambling services to customers living in the UK.
Lawmakers have said that the changes in regulation are intended to level the playing field between UK operators, which are subject to tax on all gross gambling profits and UK horseracing levy, and overseas operators that previously did not pay any UK gambling taxes.
Priti Patel, Exchequer Secretary to the Treasury, said: “The new rules will provide a fairer tax system for all gambling operators.
"Those businesses that moved their operations abroad to avoid paying UK taxes will now have to pay their fair share of tax.
“The Government has created a level playing field across the gambling industry so that all gambling by UK consumers is now subject to UK tax.”
As part of the new regulations, Her Majesty’s Revenue and Customs (HMRC), the UK national tax authority, has launched online registration for offshore operators that offer services in the UK.
As reported by iGaming Business, the new regulations had been due to come into effect on October 1, but were delayed due to a legal challenge by the Gibraltar Betting and Gaming Association (GBGA) after the organisation branded the new regime “unlawful”.
The launch of the new regulations comes shortly after the UK Gambling Commission (UKGC) revealed that the British gambling market has experienced significant growth during the period between April 2013 and March 2014.
The British gambling industry generated a gross gambling yield (GGY) of £6.8 billion (€8.6 billion/$10.6 billion) in the period, which represents growth of 6% or £400 million on the amount collected between April 2012 and March 2013.
Despite the influx of offshore operators, the non-remote betting sector represents the largest market sector with a 47% share of GGY.
However, the biggest growth market is the remote betting, bingo and casino sector, having expanded by 22% in comparison with last year.
The UKGC noted that casinos reported growth of 15% while arcades, betting and large society lotteries also expanded in the period, with bingo the only sector of the market to suffer a drop in GGY.
The amount of people employed across the sector fell 5,357 to 102,715 in the period.