Tax breaks for online gaming? No chance, says Sportingbet

As reported by the Guardian News

Andy McIver, chief executive of Sportingbet, yesterday dismissed suggestions that the chancellor, Gordon Brown, was likely to lure offshore internet poker and casino firms into taking up UK gaming licences by offering them lower rates of tax. Sportingbet has a licence in Antigua for its web-based Paradise Poker and casino operations. Rivals PartyGaming and 888 are licensed from Gibraltar, another tax haven.

The companies would face 40% gaming duty rates if they were based in the UK, the same as upmarket London casinos.

All operators seeking a licence under the 2005 Gambling Act must apply to the Gambling Commission next month, before a new regulatory regime comes into force in September.

Mr McIver said reports that Gordon Brown could set a gaming tax rate for online operators as low as 2% to 3% were wishful thinking on behalf of his competitors. Asked if the rate could be brought down to a level likely to tempt any offshore firms into taking up UK licences, Mr McIver said: “I think it is unlikely.”

Six years ago the Treasury struck a deal to reduce the betting duty on sports bets in exchange for bookmakers bringing their increasingly popular internet services back onshore.

The comments on gaming tax came after Sportingbet announced that restructuring measures in the wake of its exit from the US market had already generated annual savings of £56m.

US legislation came into force last October outlawing online wagering. Since then authorities in France have launched a clampdown on offshore operators.

Sportingbet said it had not received a letter from French authorities. It does have a French language website but France accounts for about 2% of revenues.

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