IS WILL HILL CONSIDERING A MOVE AWAY FROM THE U.K.?

3 July 2009

Speculation that just won't go away
 

There has been continued speculation this week on whether one of Britain's biggest online and land gambling groups, William Hill plc, is getting set to move its online operations out of the UK. It's a frequently raised possibility triggered by rising taxes and competition (see previous InfoPowa reports).

Adding weight to the rumours this week was an interview given to the Financial Times by Will Hill's CEO Ralph Topping.

“We face worldwide competition from 400 or so English-language betting websites," the executive said. "In these circumstances, clearly we do not have the luxury of being parochial about our future or taking a simplistic stance on complicated issues.”

Topping went on to cite competitive pressure from low-tax jurisdiction rivals such as Paddy Power and Bwin, triggering renewed rumours that the UK company was seriously considering moving its key telephone and Internet betting operations offshore. Topping has in the past commented that he sees considerable potential in Internet operations, and these have seen significant expansion, most recently involving Orbis and Playtech.

Topping has previously voiced his frustration at having to pay UK tax of 15 percent whilst competitors like Paddy Power pay 1,5 percent in Ireland.

The Financial Mail was told that competition was the reason for the company's decision to close 20 betting shops in the UK this year and freeze pay rises for its 16 000 employees.

Approached for comment by the FT, UK government spokesmen said the government would be "very disappointed" if groups like William Hill moved offshore, and assured the newspaper that a review of remote gambling rules was in progress in order to ensure a more level playing field.

Will Hill's possible intention to move offshore fears burst into the open last week when Paul Dixon, president of the Racecourse Owners Association, said William Hill was "very serious about moving".

Dixon told a conference of racing industry leaders that an offshore move by William Hill would almost certainly be mirrored by its rivals. "I believe they are geared up to make this move and, if they do go, how would Ladbrokes and Coral respond to that?" he said. "If this is going to be greatly to the detriment of racing, then the government must do something about it or face the consequences."

Dixon said the Treasury stood to lose up to GBP45 million a year in taxation, while the 10 percent levy bookmakers pay to racing from their profits would suffer a shortfall of up to GBP30 million, if the three leading bookmakers relocated their telephone bets and online businesses.

Going back to 2005/6 when the reformation of British gambling law was in its initial stages, many online gambling operators were enthusiastic about using the UK as a licensing jurisdiction and were prepared to be examined by the proposed regulator. However, it was repeatedly pointed out that if the UK government set too high a tax level, there would be little incentive to change from jurisdictions like Gibraltar and the Isle of Man. In the event, then Chancellor Gordon Brown set a 15 percent taxation rate, which effectively discouraged most operators from relocating to the UK.  

Online Casino News Courtesy of Infopowa

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