Gibraltar to Raise Online Gambling Taxes

The British territory of Gibraltar is set to raise the tax rate on online gambling companies based there from 1% to 10%, a move that industry insiders say will reap it huge financial dividends.

Tax Rises Tenfold

Online gaming companies will now pay the standard 10% tax rate that all other businesses pay, but will still be exempt from Value Added Tax, British newspaper The Guardian reported.

Gibraltar has been a haven for many gambling firms, with the attraction of a low tax rate and relaxed laws. And it doesn't look like any of them will be leaving any time soon, even with the increased tax rate.

What Effect?

This includes Victor Chandler International, whose chairman Victor Chandler told the Spanish-language El País newspaper that nobody would leave the territory, "although we'll all complain about the tax rate going up."

Even with the previous 1% tax rate,Gibraltar's government made a tidy £10.5 million in online gambling tax revenue in 2009. Should all the companies with operations there remain, including leading Victor Chandler and fellow British companies William Hill and Ladbrokes, this amount would skyrocket in the coming years, and boost the already healthy coffers of this territory of only around 30,000 people.