Tasmania - New Home of Online Gambling?

Published October 26, 2009

Tasmania - New Home of Online Gambling?

Tasmania has upset the gambling world by canceling all taxes on internet gambling companies.

Tasmania appears to have rocked the world of online gambling by doing way with taxes for online gambling operators and introducing a cut-price, one-time license fee.

The island's decision to cease taxing online gambling companies has stirred rumblings of discontent, not only in mainland Australia, but throughout the world. Industry experts believe that heavy-weight online betting providers will be lured by the attractive tax-free existence, as well as the bargain license payment of just $250,000. Many Australian gambling firms, and indeed international companies, may decide to relocate their operations to Tasmania.

Economy Fears
Although online casinos are forbidden to serve customers located in Australia, sports betting is completely legal and very popular. The Australian authorities fear a potential loss of jobs and local tax revenue if some of the country's well-established gambling operations were to up sticks and move to Tasmania. And perhaps not without good reason - there are already reports that Betfair's Australian branch is considering relocation.

It may not be just Australians who need to be concerned. "This move by Tasmania is going to have a worldwide effect on the future of online gambling," said online gambling analyst, Roger Wheeler. Referring to Australia, he said "... it could end up in disaster, because Tasmania is undercutting all of their laws regarding online gambling."

History Repeating Itself?
Australian officials certainly have some foundation for their worries. There are several recent examples of successful online betting firms relocating to places where they have better financial conditions. Both Ladbrokes and William Hill moved their operations to Gibraltar, escaping a 13% tax rate in the UK. They pay 1.5% tax in their new home. The question is, would such companies consider moving again, for tax rate of 0%?

If so, there could be changes afoot in the international online gambling industry.

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