Betting: Gambling duty 'will keep firms offshore'

Changes in gaming duties could cost casino operators £100m over three years and will do little to encourage online gambling companies to relocate to the UK, industry experts warned.

Internet gaming companies were hoping the Chancellor would set a tax rate at around 2 to 3 per cent to encourage them to move back to Britain from tax havens in Gibraltar, Malta and Alderney. However, the Remote Gaming Duty was set at 15 per cent, in line with that for bookmakers and bingo halls. Online gaming companies said the Chancellor had in effect shut the door on the industry.

Casino operators were also disappointed. Gordon Brown scrapped the lowest tax band for small casinos and created a higher 50 per cent band for the super-casino planned for Manchester and eight large casinos in other parts of the country. GBGC, a gaming industry research consultancy, said by introducing this top rate of tax for casinos generating a gross win of over £10m, "the Chancellor has guaranteed that UK casinos will never have the non-gaming attractions which make Las Vegas casinos more than just centres for gambling".

The Remote Gambling Association, which represents the online industry, said it would now be almost impossible for a UK-based operation to compete with offshore businesses. Clive Hawkswood, its chief executive, said the Government "has missed a real opportunity to lead the way in terms of international regulatory standards".

The bookmaker Ladbrokes, which has remote gaming operations in Gibraltar, said it would be remaining offshore. Ciaran O'Brien, a spokesman, said of a move onshore: "You will just be disadvantaging yourself against operators in offshore jurisdictions."

The British Casino Association said the changes would cost operators £100m over three years. "It will hit the smallest casinos... hardest with a knock-on effect for jobs and industry suppliers," said Penny Cobham, the chairman. "But all British casinos, which have the highest standards of probity and integrity in the world, will be affected."