We have been reading in the news that the large online gambling concerns, which offer offshore services to UK residents, may be in for beneficial tax-cut to lure these industry players back into the country. While we think this is a very fine idea, whether it ever comes to fruition or not, still remains to be seen.

Recently there have been massive protests against the fact that industry giants such as Amazon, Google and Starbucks have been involved in corporation tax avoidance. Apparently the government has also been aware of this and has failed to crack down on defaulters. In the meantime, an across the board tax of 15% applies to all gambling concerns, and this has seen an exodus of big brand names such as Ladbrokes, William Hill and other interactive divisions of brands, taking to the hills to license their products offshore.

While this has provided big business for Gibraltar, Isle of Man, Alderney, Malta and other independent members of the ex-British Empire. It does not do a lot for Her Majesty’s Customs and Excise coffers. Not when we bear in mind that the majority of the customers who follow these big name brands are actually situated in the UK.

Luring interactive gambling industry giants, and even the smaller concerns, does not only mean licensing fees will be filling up UK tax coffers. The industry is a mostly high-tech concern, and therefore highly paid people are employed in jobs, office space is required for hardware, software designers, financial, administrative, and all kinds of other highly paid people, and all of these people pay tax. An active industry also stimulates the economy too.

As an example perhaps we should look at Tombola Bingo. This is one of the very few interactive online bingo concerns that keepsoffices in the UK. Although they too are licensed in Gibraltar, they have offices based, and employ people in the Sutherland area. Despite the strict tax regime, which is even tougher for the bingo business in Britain, this business has continued to grow, and has on more than one occasion actually doubled in size.

With attractive tax cuts scheduled – which seems to be what Chancellor George Brown is planning, Britain’s biggest gambling companies could move back to the land of their birth. Despite the fact that this is a highly controversial move, if we think about it in pure numbers terms. It is far more economically beneficial to have twenty online gambling companies paying licensing fees, salaries, overheads etc, as well as 5% or 10% tax. Than it is to have NO online gambling companies paying any of the above expenses we listed.

Bearing in mind that there are hundreds – if not thousands – of online gambling concerns offering services to the residents of the UK; the more attractive the government makes it for them, the better it is for everyone in the long term.

According to The Mail on Sunday – "the Treasury is considering slashing the gambling levy by a third to recoup some of the £2.1 billion in revenues that has been lost over the last seven years."

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