ARGO report says tax threatens U.K. remote gambling industry
March 26, 2005
A report commissioned by ARGO and published today by Europe Economics
found that unless HM Treasury finds a way to reduce the potential
tax liabilities for online gaming operators then there is little
or no incentive for any of the major players, whose remote gaming
operations are all presently based offshore, to be located in the
UK when the Gambling Bill comes into force.
The report concludes that the Government needs to adopt regulations
that are effective, proportionate and targeted; and recognize that
taxes influence the location decision of operators and therefore
the effectiveness of any regulations.
The Report’s author, John Spicer, commented that: ‘From
the modeling we have done it is clear that there is little financial
incentive for remote gambling operators to locate the whole of their
business to the UK. There is intense international competition between
remote gambling operators based in any number of other viable low-tax
jurisdictions. Against that background the Government should be
careful not to price the UK out of the market’.
ARGO Chairman, Ian Spearing (William Hill), said: ‘This
report is an important piece of work that we hope will set the scene
for further discussions with HM Treasury about the future tax regime.
Quite simply, Britain could have the best gambling legislation
and regulation in the world, but it will be to no effect if the
tax regime acts as a fundamental disincentive for gambling operators
to be based in this country.’
ARGO General Secretary, Clive Hawkswood, added: ‘If
the Government is sincere in its desire, as Ministers have made
plain in the past, to make Britain a world leader in this field
then it needs to create a regulatory and tax environment which will
allow this to happen.
As it has developed, the Gambling Bill has improved in this
regard and there is no reason to believe that the new Gambling Commission
will be anything other than an effective and pragmatic regulator.
However, there are major questions that remain to be answered about
whether HM Treasury recognizes the importance and growth potential
of remote gambling, and, even if it does, whether it will be sufficiently
flexible to enable operators to come here. The longer these matters
remain unresolved, the more likely it is that major companies will
find themselves permanent bases elsewhere, including within other
EU Member States.’
The full report is available at the ARGO
website.
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