The UK government’s Gambling Bill was approved in its second reading by the House of Commons earlier this week.
The controversial bill, which requires all gambling operators that service British player to hold a license issued by the UK Gambling Commission, will now be sent to the Public Bill Committee and the House of Lords for further study. If the Bill is approved, then all offshore online gambling operators such as those based in Gibraltar will be compelled to pay a 15% tax rate.
A key feature of the Bill is its point-of-consumption tax which will apply to all wagers placed within the UK’s borders, regardless of where the operator is located. Gibraltar operators fear that such a high tax rate will backfire and force many gambling operators to operate in the black market. The Remote Gambling Association (RGA) reiterated this sentiment by stressing that a tax rate higher than 10% would force online gambling operators to operate illegally. Earlier this month KPMG advised the UK government to cut their proposed 15% tax down to 10%, but the government ignored the suggestion.
Last month, frustrated Gibraltar officials protested the government’s initial decision to impose the 15% gambling tax. However, their protests were in vain, and it was announced that the 15% tax will come into effect in December 2014. In the latest worrying development, Helen Grant, the head of the Department for Culture, Media and Sport said that the government would consider digitally blocking internationally-licensed operators from accessing the UK market.