It appears that the UK government has realised it made a mistake with online gambling legislation and there are now reports that it is planning to reduce online gambling taxation.
It has been reported that the Treasury is going to cut a 15% tax on all gambling services in the UK and it is thought the tax will be cut by as much as a third. According to the UK Gambling Commission, the UK’s online gambling market was worth £20.1 billion in the 12 months ending March 2012 and it is growing at an annual rate of 15% throughout the EU.
If the UK wants to attract the biggest gambling operators then it will have to make a number of changes. Seven years go most of the UK based gambling firms moved to offshore tax havens such as the Channel Islands, Gibraltar and Malta in order to avoid paying the 15% tax imposed on all gambling services by the state.
A reduction in the tax would be a large step towards attracting the companies back to the UK mainland, however, a number of analysts believe that the government will have to cut the tax by more than a third. If the tax rate is set at 10% it is still considerably higher than the rate paid by the companies abroad.