Offshore gambling operators to be regulated in UK, says Government

The move is intended to bring the regulatory requirements for overseas companies into line with those in the UK.

Foreign companies must currently be licensed in certain 'white-listed' jurisdictions in order to operate in the UK.

The change could lead to companies based in low-taxation regimes paying the same 15% tax on their UK gross profits as paid by UK-based gambling operators.

Gambling operators will learn more about the tax implications of the plans when the Treasury publishes a response.

“We have considered the implications of this statement and will be making an announcement in due course,” a Treasury spokesperson told OUT-LAW.COM.

The Government announcement is the result of a review of gambling laws which began 18 months ago.

At the moment, any gambling operator who wants to offer its services in the UK must be licensed or regulated by one of the states approved by the Gambling Commission, the Government regulator of commercial gambling in the UK. Licenses issued in these white listed countries are treated as having been issued in the UK.

The current system will be phased out under the new regime.

John Penrose, the minister responsible for gambling, said that remote gambling should be regulated from the point of consumption rather than the point of supply.

"The current system for regulating remote gambling doesn't work. Overseas operators get an unfair advantage over UK-based companies, and British consumers who gamble online may have little or no protection depending on where the operator they deal with happens to be based," he said in a statement.

The statement does not mention changes to the regime for taxing gambling companies' profits earned in the UK, which must be dealt with separately by Parliament. However, that overseas operators are able to take bets in the UK "without bearing a fair share of the costs of regulation" or of the treatment of problem gambling is unfair, Penrose said.

Many high street bookmakers, including Ladbrokes and William Hill, have moved their online operations abroad.

The internet gambling marked in Europe will be worth €12.3 billion by 2012, according to Government figures.

"If the white-listing process is properly operated, then consumers should already be adequately protected. While it may be reasonable for offshore gambling operators to contribute to some of the regulatory costs in the UK, I suspect that the revenue-raising potential may have been a motivating factor," said Susan Biddle, gambling expert with Pinsent Masons, the law firm behind OUT-LAW.com.