Overseas-based gambling operators face having to pay millions of pounds in levies to support horseracing and research into gambling addiction, under new regulations being considered by ministers.
MPs have complained about the unfairness of British-based operators paying such levies while operators licensed offshore are allowed to advertise their products in the UK, yet pay nothing.
The view is shared by UK-based bookmakers who this week agreed to a further year of contributions to the Horserace Betting Levy, amounting to 10 per cent of their gross profits and adding up to about £100m ($148m).
Gerry Sutcliffe, sports minister, will announce on Thursday a review by the Gambling Commission and civil servants aimed at creating a fairer system of payments and “a more level playing field between British businesses and their overseas counterparts”.
As well as contributing to the horseracing levy, companies that have offshore servers such as PartyGaming, 888, Sportingbet and Betfair could be expected to help pay for regulating the industry and the treatment of problem gambling.
But the review faces complex issues, such as whether it would be possible to distinguish between the profits offshore companies make from UK and non-UK punters in order to determine the levy.
Mr Sutcliffe said the remit would also look into issues such as allegations of match fixing and what gambling operators are doing to preserve the integrity of sport.
He has already beefed up the commission’s investigations into betting irregularities by bringing in outside experts from sport, the betting industry and the police.
The commission and the Department for Culture, Media and Sport will also review the controls introduced in the 2005 Gambling Act that created a regulated market for online operators.
Since September 2007, companies licensed in UK-recognised licensing jurisdictions such as Alderney, Gibraltar and the Isle of Man have been allowed to advertise under regulations policed by the commission.
MPs have been pressing ministers to explain why vast amounts of the £1.4bn generated by online gambling in the UK goes abroad.
Mr Sutcliffe said the Gambling Act, though freeing up the industry, was aimed at protecting consumers.
“We have taken steps in the right direction, but technology is changing and attitudes are changing,” he said.
Mr Sutcliffe said he recognised that Britain’s gaming taxation regime discouraged operators from basing their servers in the UK, but the issue was one for the Treasury to examine. (Credit: Financial Times)
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