What is it like for a typical casino fan in the UK at present? You may think that December has dawned like any other month for the freebie-hunting UK casino enthusiast, but you'd be very wrong on that score. The reason for that is simple; the 2014 UK Gambling Act.
Since the act passed into law at the beginning of November, the effect of this act has been felt acutely in the UK and not in a positive way.
Here's why:
The main thrust of the 2014 Gambling Act was the UK Government closing what it was a loophole in the former system when it came to online gaming within the UK. Under the former laws, a company that was resident in the UK had to pay tax on the profit it earned through UK players playing its games.
However, for companies that were registered outside of the UK, they were able to attract UK players to its site, where they would spend money which was not taxed and for which the treasury received nothing.
In its wisdom, the UK Government felt that this state of affairs was unfair for two reasons. Firstly, it handed companies outside of the UK an advantageous position over those that were registered in the country as effectively, they were receiving a tax-break due to not paying any tax on money earned from UK customers, whereas companies registered in the UK were.
The second reason was purely fiscal. The Government realised that a tax on the profits of offshore based companies who generate their profits from UK customers, would raise some additional funds for the national budget.
In preparation for the implementation of the new law, the UK Government decreed that all companies that wished to operate online casinos and other gambling sites within the UK from offshore, would be forced to register for a new license. This new license would be granted provided that the company paid a tax on its profits generated from UK customers.
Of course, many of the companies who are based offshore found these new laws less than appealing. It effectively took a rather hefty chunk out of their profits immediately and while some companies decided that the UK market was still worth investing in and applied for a license, a large number of companies did not.
The result of this was that as of the 1st November, companies based offshore that do not have a new license were no longer permitted to offer casino games to UK-based customers.
The effect of the new law
Every year there are hundreds of pieces of legislation passed into law and very few of them make any meaningful difference to our lives. However, the 2014 Gambling Act has had a huge impact on the choice available for the average UK-based casino fan.
Until a month or so ago, you could log into a site like ours and have your pick of all the offers on the page. You could elect to take a no deposit cash bonus, or perhaps join a casino and receive some free spins as a thank you. Or perhaps, you wanted to join a casino to take advantage of its advantageous new player deposit bonus.
Overnight, the options available for the typical British player were slashed. Instead of a welcoming screen when you logged into a new casino, you were met with a screen warning you that British players were no longer able to play at the casino.
Furthermore, if you are based in the UK and clicked on many of the free spins offers available on the site, you were informed that due to the new laws in place where you lived, you were no longer able to take advantage of these offers.
This happened almost instantaneously although some companies pulled the plug on their British operations in advance of the date that the legislation passed.
Overnight, British casino fans went from having the pick of the offers in the world, to only being able to play and take advantage of any promotions and deals from casinos that had successfully applied for one of the new licenses.
For the typical British casino fan, the options available in the online world have shrunk considerably.
Why aren't offshore casinos applying for the new licenses?
If you are a British casino fan, then you may be wondering why only relatively few offshore casinos and other gambling sites have applied for one of the new licenses? After all, British money is still British money and there is a healthy fraternity of casino users in the UK ready and wanting to play casino games.
The answer lies within the legislation and specifically, the 15% Point of Consumption tax that all license holders based outside of the UK would have to pay for every wager made by a resident of the UK.
Prior to the passing of the law the Gambling Commission estimated that only 15% of casinos operating within the UK were contributing tax. The new act, sought to redress this imbalance by applying the 15% tax at the point of consumption (in the UK) rather than at the place of sale (where the offshore casinos is based).
This was projected to bring in an extra £300m in tax revenues alone.
However, what it in effect did was ensure that offshore companies are in effect taxed twice. They are already subject to tax laws where they are based (even if they choose locations which have famously favourable taxation laws for businesses, such as Gibraltar) and now they had a 15% tax on UK earnings on top of their current tax demands.
For many companies that convinced them that applying for a new license just wasn't worth the cost. As such, hundreds of online casinos didn't bother and as a result, UK players cannot play at these casinos.
What about those that have?
There are a relatively small number of online casinos and other gambling businesses that have applied for and received a license and these are still able to offer slots, casino games and promotional offers to UK customers.
If you are based in the UK, you need to point your browser at this page for all the best UK casino offers we can find for you over the coming weeks and months.
Will the 2014 Gambling Act achieve its aims?
According to the UK Government, the 2014 Gambling Act sought to level the playing field for companies operating within the UK in terms of taxation and gambling and to raise around £300m per year through the new point of consumption task.
However, that figure almost certainly assumed a high percentage of companies operating within the UK from offshore bases, applying for a new license. The fact that so many of them have not makes it very doubtful that anywhere near this amount of money will be raised.
British-based companies may be happy that there is considerably less competition, but for the UK-based casino player, this is not an ideal situation. Competition usually breeds the best deals and offers and a lack of it means casinos don't need to offer as much to gain your custom.
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