Second thoughts on secondary taxing of online operators

The UK Treasury is due to complete its review into the GBP1.7 billion British online gambling market next week, and will almost certainly recommend that a secondary licensing fee be imposed on offshore remote gaming companies wishing to access the UK market.

Clearly with this prospect on its radar, gambling group William Hill plc, which has a more than 10 percent share of the UK market, recently commissioned its own review, conducted by the respected professional business services provider Deloittes.

The results published this week are interesting; the study indicates that secondary taxation at the point of consumption could lead to 40 percent of punters using unauthorized (and untaxed) operators, as more reputable companies exit the scene.

Deloittes estimates that any additional tax burden will grow the black market, and that a 15 percent British tax could result in two-fifths of legitimate firms departing the UK market, thus forcing Brit players to use more dodgy internet operators taking their chances with the authorities.

A spokesman for William Hill told The Independent newspaper this week: “The question for the Government is, should it introduce policy which distorts markets?”

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