By Amanda Carter Thursday, December 30, 2010
Gibraltar, a territory under British domain, has been home to many major online casino companies. Many of those companies selected Gibraltar as their home base due to its low tax rate, but that may soon change. Officials with the Gibraltar government announced that they would raise the tax rate assessed to online gaming companies from 1% to 10%.
The island has been famous for centuries for its “Rock of Gibraltar”, a natural formation that has come to represent steadiness and dependability. All businesses in the territory are taxed at the 10% tax rate. However, the exemptions made for online poker sites, such as PartyPoker and 888Poker, made the area extremely attractive for other players in the industry to relocate.
The territory also had in place a tax ceiling of £425,000 (US$654,450) for online gambling sites. The new laws would also call for that ceiling to be removed. Peter Caruana, the first minister for the island, said that the changes were made to conform closer to the tax structures in place in other European Union member states.
“In order to sustain our successful economic model,” Caruana said, “we must retain a commitment to a very competitive corporate tax model.”
John Shepherd, a spokesman for PartyGaming, said that his company has known that the increase would come soon and that executives have “factored it in” to their decision to remain in Gibraltar. “The tax is still going to be very low,” Shepherd said.
PartyGaming is preparing to merge with online sports betting site bwin. The bwin offices will stay in Austria, while PartyGaming continues to operate out of Gibraltar.
