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 Welcome to
the News desk.
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| Tote's online casino finds tax haven |
27/12/2007 |
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Simon
Bowers
Totesport Casino, an internet arm of government-owned bookmaker the
Tote, is switching its operations to the offshore tax haven of Alderney in a
controversial move that will allow it to advertise freely in the UK while
avoiding UK tax and regulation.
The move will come as an embarrassment for ministers who have sought
to present the UK's approach to online gaming regulation, set out in the
Gambling Act 2005, as world-leading. In practice, the industry has boycotted
the UK regime.
At a conference of international regulators held at
Ascot last year, Peter Dean, chairman of the government's new Gambling
Commission, said: "Everybody who offers gambling in Britain will be required to
be licensed by us [from September 2007]."
But when the September deadline came, none of the
leading poker and casino operators took up a UK licence. They said they had
been forced to boycott the UK because Gordon Brown, in one of his final moves
as chancellor, had set a prohibitively high 15% "remote gaming duty," the tax
on online poker and casinos.
One operator called the tax "a joke,"
insisting the industry would continue to target UK punters from offshore bases
where they pay little or no tax.
The UK is believed to be the biggest
legal market for online poker and casinos in the world after ministers chose to
try to regulate rather than restrict the new industry. In September, the
Gambling Act greatly liberalised advertising restrictions on gambling groups,
regardless of whether or not they held a UK licence.
Other governments
have moved to frustrate unlicensed internet groups and last year the US - then
the largest online poker and casino market - drove most operators out of the
country after passing tough legislation targeting payments for online gambling.
A spokesman for the Tote, which is about to be privatised, said the
decision to switch its online casino operations from Curacao to Alderney had
been taken in order to allow Totesport Casino to advertise freely in the UK, in
particular permitting it to sponsor horseracing events. Curacao-licensed
operators do not qualify for UK advertising freedoms.
Asked why the
Tote had not sought a licence from the UK Gambling Commission, he confirmed
Alderney offered lower costs, particularly when it came to tax.
The
spokesman said the decision to relocate to Alderney had been taken in full
consultation with the Department for Culture, Media and Sport.
A
spokesman for the DCMS said: "This is a business decision for the Tote. The
Tote is run as a business."
The government has been trying to privatise
the Tote for about seven years but early efforts were blocked in Europe because
they breached rules on state aid. Tote management, under chief executive Trevor
Beaumont and backed by a consortium of race track and horse owners, is believed
to be in the final stages of negotiating an alternative sell-off plan.
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