New taxation laws proposed for UK Gambling market

The expectation of the results of the UK Treasury's review of the British online gaming industry and a landmark ruling in South Africa against on online casino have combined to raise even more questions regarding the current regulation and legislation of a market that has grown to be worth over £1.7 billion.

MP Matthew Hancock began discussions in Parliament to redefine the place at which the online gambling transaction takes place. Current guidelines suggest that in the UK this transaction takes place at the operator's server destination. However, The Supreme Court of South Africa last month took a different view, stating that the transaction takes place a the player's hardware destination, which sounded the death knell for the Swaziland-based casino that was offering online services to South African based players.

British MPs have also been discussing the introduction of a secondary license fee on offshore remote gaming companies operating in the British market. This would directly affect betting giants such as William Hill, a company which enjoys a 10% share of the UK Gaming market but currently operates from an offshore location.

It is these offshore operators that the UK Government is seeking to target. In a tough economic climate it makes fiscal sense to target tax loop-holes such as the one that exists in the UK's gaming market. Most of the top 20 operators in the UK market operate from offshore locations and do not pay any taxes or horseracing levies to the British Treasury. With both the treasury and the Department of Culture, Media and Sport fully committed to tax reform it seems to be only a matter of time before new Gaming tax laws become a reality.