A new internet gambling dispute has raised its head between Gibraltar and Britain. With a lot of online betting companies running their operations in the tax haven of the British territory at the tip of the Iberian Peninsula, their status may be placed under?pressure now.
The battle?lines have been drawn following?British Prime Minister David Cameron?s plan announcement that a 15 per cent tax will be placed on British customers?placing bets through Gibraltar based?betting sites.
Naturally the officials and the executives?operating in the territory?s online betting industry aren?t too happy at the news. The concern is that the proposed tax represents nothing but an unfair revenue take from the British Government, reaping the benefits from their operations in their tiny outpost. Britain doesn?t have?say over the trade?and industry issues in?Gibraltar,?who set their own taxes.?However, they?won?t have a say over what the British Government?do with their taxation on Britons residing in Britain.
The proposed new?tax from David Cameron, which he wants in place by December 2014,?has been designed to level the playing field for British bookmakers who take bets in Britain.?Anyone placing a bet in Britain is subject to?a fifteen per cent tax, but bets placed on?any of the many Gibraltar based sites aren?t.?The levies?required by Gibraltar based companies is a paltry 1 per cent in comparison.
The tax would be ?clearly against the common-sense logic of electronic commerce,? said Phill Brear, Gibraltar?s gambling commissioner. He said that about 60 percent of online bets by Britons were placed through Gibraltar sites. ?We now hear a lot of talk in the U.K. about creating a level playing field. But you can in fact never level the field between high-street shops and online services.?
If the plan does come in, then Gibraltar companies would then face the same rules as betting-shop operators back in Britain, like William Hill and Ladbrokes. However, because both William Hill and Ladbrokes have online operations based among Gibraltar?s online wagering industry, they would get ensnared by the new tax.
The change would put ?a huge and unwanted cost on our business,? said Steve Buchanan, who heads the Gibraltar operations of Ladbrokes.
So the taxation saving by moving?business to Gibraltar may now be trimmed.?Online betting exchange Betfair, when they moved their operations to Gibraltar in 2011,?announced that they would be?able to save around??20 million on taxes alone, because there are also other tax saving on?other aspects of business as well over there. The online betting industry is vital to Gibraltar.
Around 15 percent of Gibraltar?s $1.89 billion economy is provided through online betting, and gambling companies provide jobs for about 2,500 of Gibraltar?s 30,000 residents. Four more Gibraltar-based online betting operators entered the territory?over the last twelve months alone, raising the total to 25 ? each of which might operate several Web sites.
So this argument looks to rumble on for some time. On one side there is Gibraltar, who thinks that the protectionist measures by the British Government violates the Union?s free market rules, and could force punters to use less regulated?markets. On the other hand there is the British Government?trying to protect the British based operators who?are having to pay taxes anyway, and who also believe it will?help to control betting irregularities as well.
?These proposals will ensure that British consumers enjoy consistent standards of protection, regardless of where a gambling business is based,? the British minister for sport, Hugh Robertson, said last year.
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