Argo Report Says Tax Threatens UK Remote Gambling Industry – March 29th, 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.’