by Renee Israel
William Hill, one of the leading bookmakers in the UK, has said it will
challenge the government's plans to introduce a new tax regime on internet
gambling businesses from the end of 2014.
Earlier this year, the UK Chancellor announced potential changes to UK
gambling laws, including a new 15% duty on bookmakers who offer their online
gambling services to UK gamblers, even if they are based outside the country.
The new laws are set to affect the majority of UK bookmakers, including
William Hill and Ladbrokes, who moved their online gambling sectors offshore to
locations such as the Isle of Man and Gibraltar in order to avoid UK's heavy
taxation on its gambling industry.
However, the new 'point of consumption' tax suggested by the Chancellor will
end these bookmakers' advantage over locally based gambling operators, as the
15% duty will be based on profits generated in the United Kingdom, no matter
where the operator is based in the world.
William Hill Building Case
William Hill is said to have asked its legal team to create a case against
the United Kingdom's new taxation regime.
Lawyers have said that, under European Union law, the tax is considered
illegal as it purposefully restricts free movement of goods and services and
counters treaties of free trade.
William Hill believes that it has a solid case against the government, and
the Chief Executive of the group, Ralph Topping said that he had heard
"encouraging noises" from betting lawyers that the bookie could successfully
challenge authorities in a court of law.
According to Jason Chess from the legal firm, Wiggin, regarding William
Hill's challenging the gambling tax: "You cannot restrict the free movement
of goods and services in order to raise your own national tax. We can't stop BMW
from selling BMW's in this country because the tax is paid in Germany."
The government has made no secret of the fact that it hopes to raise £200
million a year through the new 15% point of consumption tax.
William Hill to Appeal Betfair Ruling
Also, in its continued efforts to create a level playing field in the UK
gambling industry, William Hill revealed last week that it would be appealing a
ruling that Betfair, the UK based betting exchange, does not need to make a
financial contribution to local horse racing.
Topping said that he was "adamant" that an appeal of the ruling was worth the
effort.
The CE revealed the group's plans while announcing that its pre-tax profit in
the first half of the year jumped 13%, driven by a strong online gambling
sector. Income from William Hill Online increased 30% to just under £200 million
and online profits grew 23%.
