The Remote Gaming Association also recently gave its opinion to the Select Committee. It said that the main reason the online casino operators it represents are against the proposed changes to taxation is that players would tend to play in unlicensed online casinos as these would not be paying the proposed 15 per cent tax and so could offer many financial incentives to players.
Since the end of 2011 there has been movement by the British government to reform gambling legislation. This review has been in the offing since the Gambling Act was passed in 2005 when provision was made for changes to be made if judged necessary. In the 2012 Budget a major change was announced, this was the plan to change the taxation system in place for online casino operators.At the moment only casino operators who are domiciled in the United Kingdom have to pay a 15 per cent tax on profits from gambling.
Under the proposed changes a “Point of Consumption Tax” would be implemented so it does not matter if the online casino operator is located outside of the United Kingdom, the 15 per cent tax would be based on where the casino client is based and not on the location of the operator. So if the law is changed, every time a United Kingdom based player gambles online the casino operator no matter where it is in the world is liable to pay the United Kingdom tax. Under the new rules online gaming companies who wish to offer their services to players in the United Kingdom would need to be granted a gaming licence by the United Kingdom Gambling commission and also pay the tax on their gross profits from gaming.Since the government announced that it hoped to introduce the new gambling laws towards the end of 2014, the Media Culture and Sports Select Committee has been hearing the opinions of various groups that would be affected by the changes in the existing laws and tax regime. Recently the Select Committee heard from the United Kingdom Gambling Commission. When it was stated that the proposed licensing bill was being considered to protect players and ensure regulation among operators, the Chief Executive Officer of the Gambling Commission replied that most of the operators receiving bets from players in the United kingdom were regulated by authorities acceptable to the Gambling Commission.