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07 Sep 09 Gambling market in United Kingdom weaker after move

This year has seen a lot happen in the gambling market in the United Kingdom, this is particularly true of the online gambling sector. The government’s Treasury stated that this year the new financial year would bring with it a marked increase in the level of taxation that gambling companies would have to deal with. This comes at a time when companies are struggling to ensure that they deliver value to their shareholders in the middle of a very difficult and volatile economic situation. One has only to look at the way the markets seem to go up and down to understand that there is definitely a lot of uncertainty in the market right now.  So when this announcement was made it was clear that the market did not welcome it and some companies have had to take quite significant actions.

This is certainly true of betting giants Ladbrokes and William Hill which have both announced that their online gambling operations are to be moved from the country to Gibraltar. The island nation is ideal as there is very little tax there and there is also a good regulatory frame work in place. This means that the bottom line will be healthier and also there is still the security that there is a good operational environment for the company. These sorts of things become more and more important to companies as they need to make sure that they are making the right decisions for the longevity of their business.

So it is now understandable why the companies have moved their online gambling operations but the broader industry is not happy with the situation in the United Kingdom and there are many that feel that the sector has actually being made weaker due to the companies’ move. There is a feeling that these companies were forced to move by the government given that there was little choice made open to them, secondly though there is the opinion that the government has effectively shot itself in the foot due to the fact that it will no longer benefit from the revenues coming in from the companies’ operations.

There is a lot of work that needs to be done to calm the fears of those in the UK online gambling industry as they are now worried that this is going to spell the end of the country’s leadership position in terms of the online gambling market.

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