Rank Plc Exec Proposes Harmonized Gambling Taxation in the UK

Ian Burke in a drive for one simple and fair regime

This week, an experienced CEO and Chairman of gambling group Rank plc, Ian Burke, issued an op-ed note in the Telegraph calling for a more equitable and harmonised tax regime for both online and land gambling in the UK.

In his piece, Burke wrote that, according to the European Parliament’s findings, online and land gambling are competitors, so legislation that favours one over the other amounts to state aid and is bad government practice.

In addition, Burke said: "The report could have gone further and pointed out that a tax system (such as we have in the UK) that favours online casinos, bingo clubs and bookies (low levels of employment and regulatory oversight) to the detriment of their land-based equivalents (high levels of employment, highly regulated) was not just unfair, and potentially illegal, but just plain misguided."

He also pointed out the fact that Britain's Parliamentary Select Committee for Culture, Media and Sport has been grappling with the problem for months now, along with secondary licensing and taxation for offshore internet operators, attempting to realize why UK gambling legislation has not managed to provide all the economic benefits ministers had anticipated.

In favor of the country’s land-based gaming industry, Burke underlined its potential to boost employment and contribute to the growth of the economy, claiming that it is only possible for the industry to do so if the government brings to an end the 'subsidies' provided to online gaming and harmonises the taxation of all regulated forms of gambling under one simple and fair regime.

And even though the previous gambling reform did bring some benefits into the market, Burke opined that the tax provisions appear to be designed to undermine rather than support the aims of the Act.

According to him, the Select Committee presents an opportunity to address these shortcomings and produce an Act that is "...more responsible to society, provides greater benefit to the economy and is better able to compete in the global market."

Burke also stressed the difference between the tax levels and efficiency of Britain's land gambling establishments with the company's online gambling competitors, who also target UK consumers but since they have no establishment in the country, they do not pay any UK tax on their online gaming income.

"The small minority of UK established online companies that offer bingo and casino games enjoy the advantages of a benign system of regulation and lower rates of taxation," Burke writes, adding: "There are similar inconsistencies from a regulatory perspective. At present, Britain's licensed casinos account for just 1 percent of the near 250,000 gaming machines in Britain today, despite being widely acknowledged as providing the safest environments for machine gaming to take place."

After he wrote to the British Treasury in 2010 to recommend the harmonisation of gaming taxation, even though this would mean that the Rank group’s online business would be subject to higher taxation, the UK government has showed initiatives to regulate and tax all online gambling in Britain , Burke reminded.

However, he cautioned that isolated fulfillment of such initiatives, without considering the broader industry, will see the government fail in its duty to provide protection for its citizens and to promote economic growth.

In conclusion, Burke said: "As it looks ahead to a challenging year for the economy in 2012, the government has an opportunity to get things right. It has an industry that (unlike many others) is willing to invest and to create skilled jobs; and it has the counsel of John Whittingdale's Select Committee and the European Commission to turn to for guidance. I hope that this time Government ministers choose what is right over what is politically expedient."

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