News

Thursday, 26 May 2011 05:21

With the recent introduction of a heavy online gambling tax in Germany, experts predict that the UK may follow suit with higher gaming taxes.

It is not unusual for governments to want a piece of the action when there is a lot of money involved. The action of the German government in raising gaming taxes to 16.7 percent just shows how readily those in power can use their position to legally siphon off more of the profits from such a huge industry. But it may not just be the German government who are casting their greedy eye over the spoils of online gambling.

The US federal government is already using its power to sting online gambling companies who believed they were safe from prosecution. Rather than wasting time passing laws that would legalise and make possible the fair taxation of the industry, they are simply using the power of the law to indict company founders and levy huge, multi-million dollar fines.

Online gambling companies operating in the UK have enjoyed a long spell of relative freedom, relaxed rules and competitive taxation levels. But they could be about to see some extra baggage added to their, so far, smoothly running gravy train. In light of economic pressures putting the squeeze on the government's treasury, politicians are looking more closely at the obscene amounts of money that are passing through the hands of online gambling operators.

A timely change in the country's taxation laws could see a larger slice of that particularly lucrative pie wending its way into cash strapped government coffers and this is exactly what experts fear may happen sooner rather than later. Changing the laws on online gambling taxation could also rein in a larger proportion of the profits now enjoyed by those companies who recently moved their headquarters offshore while still operating in the UK. Companies that relocated to Gibraltar and other tax havens could be forced into paying the full amount of UK tax if they want to continue doing business there.

Naturally, the politicians involved in making these decisions have their answer to critics of any tax hike in the online gambling sector. They stress that such a move will have the effect of promoting more consistency within the market. In addition to this, tightening up existing regulatory systems will better protect consumers against the many unlicensed operators that make up a worrying 85 percent of all Europe-wide gambling operators online.

Consumers certainly need to be protected from greedy, amoral, money grabbing shysters. Almost as much as they need to be protected from unlicensed, fraudulent online gambling operators.