Recent amendments to the taxation of online gambling are set to affect offshore gambling companies with a customer base in Great Britain.
On March 18 2014 a change to the Gambling (Licensing and Advertising) Bill was ratified by the House of Lords, and the following day the government announced a change to the consumption tax which will have ramifications to the online gaming market when it is launched on December 1 2014.
It will ensure that offshore gambling companies, such as the Gibraltar based company Betfair, will have to pay tax at the rate of 15 per cent of all gaming profits. The key change is on the place of consumption – where the gambler lives – ensuring companies pay UK tax on the profits made from UK customers.
Founded in 2001 and with regional offices in the UK, Malta, Ireland, Gibraltar, Singapore, Macau and the USA, Pentasia specialises in interactive gaming & gambling technology recruitment. It offers clients a worldwide contact network and service portfolio that is unrivalled across the sector.
John Doyle, Head of Marketing and Operations at Pentasia, said: “It will be interesting to see what ultimate effect the Place of Consumption Tax’s introduction will have on the online gaming industry particularly with respect to those companies based in Gibraltar. We have spoken to a lot of the jurisdiction’s senior executives on the subject and most are pretty bullish as their businesses will still pay less tax than if they were based in the UK. However, when one takes into account the added costs of relocating to Gibraltar, the tax is likely to prevent other companies from moving to the jurisdiction in the future.”