The UK government announced last month that it was making significant changes to its existing gambling laws to make tighten regulations on UK’s online gambling market. Some of the changes included increasing tax rates, making sure all gambling operators have a valid license and monitoring online gambling activity much more carefully.
The national tax authority in the UK, Her Majesty’s Revenue and Customs (HMRC) recently announced that it has set up an online registration process and all gambling operators must register if they want to continue operating in the UK and serving UK based customers. The change in tax laws and the new restrictions has upset a number of gambling providers and some have decided to pull out of the U.K.
One of biggest changes in the tax laws is that the UK will now tax gambling operators based on the location the service is provided and not on the location where the company is based. In the past, a number of gambling operators based in France and Malta offered gambling services in the UK while at the same time avoiding high taxes. Now, the government requires companies to pay taxes if they wish to serve the UK market.
Brian Mattingly, the CEO of 888 Holdings expressed his disappointment in the new laws rolled out by the UK government as 888 has a significant percent of their business in the U.K. Mattingly believed that these changes made in the UK will only affect the online gambling industry in Europe but will also have a significant impact on the global online gambling industry.
The UK has enforced tax laws on gambling companies that make it mandatory for them to pay taxes on general betting duty, pool betting duty and remote gaming duty from the 1st of December. Companies who want to continue operating in the UK are required to follow the registration process outlined by HMRC.
In a statement, the deputy director of gambling taxes at HMRC, Sally Beggs said “These new rules mean that all remote gambling businesses, whether based in the UK or elsewhere, will be taxed on the same basis. This will provide a level playing field so that all gambling by UK consumers is subject to UK tax”.
A number of online gambling companies have joined forces to protest these new tax regulations by the UK government, while other companies have quietly shutdown operations in the UK as they do not believe the UK government will be considerate to their views.