Offshore Gambling Bill due for Jan 2013 hearing
West Suffolk MP Matthew Hancock says bill is "firmly on the path to becoming law".
The UK Offshore Gambling Bill calling for a point of consumption tax to be imposed on British-facing egaming operators will receive a second hearing in January 2013 and is “firmly on the path to becoming law”, according to the MP who introduced it.
The Offshore Gambling Bill, originally introduced by conservative Suffolk MP Matthew Hancock on 8 February last year, has received a date for its second reading on 25 January 2013.
This followed an announcement in July last year by John Penrose, Minister responsible for gambling policy and regulation, stating that all on and offshore operators selling services into the UK would in future have to obtain a licence from the Gambling Commission if they wish to continue offering online gaming to UK customers.
Hancock’s bill was principally brought on the premise that offshore operators are supposedly depriving horse racing authorities of funding and seeks to reform the UK Gambling Act 2005 and ensure operators contribute to horse racing but through other means than the existing levy. On his personal website he says the “loophole means that 18 of the 20 largest bookmakers currently avoid paying £300m of UK taxes and tens of millions in Horseracing Levy contributions”.
The biggest change for the industry however will arguably come in the potential impact of proposed legislation to tax online gambling operators at a point of consumption rather than the current levy on place of supply.
Chancellor George Osborne confirmed the coalition government’s plans to alter the way UK operators are taxed in his 21 March budget earlier this year. Osbourne said the current duty regime for remote gambling introduced by the last government levied on a place of supply basis had allowed overseas operators to “largely avoid it “ and much of the industry has, as result, moved offshore”.
“Ninety per cent of online gaming in the UK consumed by our citizens is now supplied from outside the UK. And the remaining UK operations are under pressure to leave”, he added.
A month later the UK Treasury published and began accepting comments on the policy design and the potential impact of the proposed legislation with the closing deadline this Thursday 28 June.
The Treasury’s website explains that the views of those involved in this process will “help shape the final policy design of the reform” which the government plans to introduce in December 2014.
Hancock has a trio of cross-party supporters to thank for the bill receiving a second hearing with three members of Parliament, MPs Charlie Elphicke, Ben Gummer and Thomas Docherty, sleeping overnight in the House of Commons to ensure it was heard late yesterday.
He told the BBC last night that he hoped it would address bookmakers operating online businesses from offshore and avoiding up to £300m a year in tax. A loophole he said hopes to close.
“It is great news for racing that the Offshore Gambling Bill has secured a slot for a second reading. The bill is now firmly on the path to becoming law, which can’t come soon enough for many of my constituents in Newmarket and the rest of the horseracing industry,” Hancock said.
“I am thrilled that with a cross-party team effort, we have been able to secure one of the 13 slots for backbench legislation this year. I am enormously grateful to Charlie, Ben and Thomas who slept through the night in Parliament to make this happen,” he added.
The bill was opposed by fellow conservative MP Philip Davies who argued that an increase in regulation would result in players using unlicensed websites, however he added that “a single digit tax system of 5% across the board would be better than trying to collect 15% from none of them”.
“I look forward to making the case for reform to the system and helping secure a future for racing. Horseracing supports 100,000 jobs countrywide including 5,000 in my constituency town of Newmarket. Everyone should welcome a level playing field for gambling and racing here in the UK,” Hancock added.
The bill was due to be heard on 30 March this year, however as Parliament did not sit on that day no further movement has since taken place.