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Gibraltar Raising Gambling Taxes For Online Companies In 2011

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William Hill and Ladbrokes, two online gambling companies, bolted from the UK recently to get away from the thirteen percent tax they were paying. The companies opened up shop in Gibraltar, having to pay only a one percent tax.

It was a short honeymoon period for the two companies, Gibraltar lawmakers have decided that the online gambling taxes are being raised to ten percent starting in 2011. The new tax will be the same as other businesses pay in Gibraltar.

"Nobody will leave," said Victor Chandler, Chairman of Victor Chandler International, one of the gaming companies located in Gibraltar, to El Pais newspaper. "Although we'll all complain about taxes going up." That may be a sentiment shared by many of the online gaming executives in Gibraltar.

European Union law maintains that taxes must be comparable, and Gibraltar has had a tax level much below other countries. The government has decided to come into compliance with European law. Around twenty online gaming companies will be affected by the tax rate change.

The gaming companies are thriving of late, and the tax should not cause any of the companies to move. Even if they wanted to leave, it is impossible to find anyplace where they will receive a lower rate, even at the ten percent that the government is increasing to. Gibraltar lawmakers understood they could raise the rate and not risk losing business partners.

Companies located in Gibraltar have recently started to consolidate with other gaming companies. Ladbrokes is in the process of creating a bid to acquire 888 Holdings. If that were to happen, Gibraltar could see more companies moving into the area in the coming years.

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