William Hill is one of the largest gambling services providers in the United Kingdom with major operations in both land and online gambling. Its online operations received a significant overhaul recently with Playtech acquiring a share of the company. Of late there have been rumors that Will Hill is finding the tax levels in the United Kingdom too high and is looking to relocate.
One of the sources of these rumors is an interview that Will Hill CEO Ralph Topping gave to the Financial Times. In the interview Topping said that Will Hill was competing with about 400 English language based online gambling web sites located in various gaming jurisdictions throughout the world. He named Paddy Power and Bwin operating from low-tax jurisdictions as major competitors. Paddy Power in Ireland pays 1.5% tax, whereas Will Hill has to pay tax at the United Kingdom rate of 15%. Topping pointed out that Will Hill’s Internet betting operations were a major focus of the company and were being nurtured. But the tax difference was just too big. Topping added, “In these circumstances, clearly we do not have the luxury of being parochial about our future or taking a simplistic stance on complicated issues.” Reading between the lines this implies that moving offshore is an option that is being considered.
A more direct reference to Will Hill moving out of the United Kingdom had come in connection with Will Hill’s online horse racing operations. Speaking at a conference of racing industry leaders, Paul Dixon, president of the Racecourse Owners Association, had unequivocally said that Will Hill was “very serious about moving”. Dixon had also indicated that if Will Hill moved away then its main competitors in the online horse racing betting arena like Ladbrokes and Coral would be forced to follow suit. Dixon went on to estimate the loss of this move to the Treasury as well as to the horse racing industry. He said that the Treasury could lose £45 million a year in taxation, while the racing industry could lose £30 million. The bookmakers pay a levy of 10% of their profits to the horse racing industry.
In a follow up to the Topping interview the Financial Times approached the United Kingdom government for their reactions to the high rate of taxation. The government spokesperson said that the remote gambling tax regime was being looked at in order to ensure parity with competing jurisdictions and that it would be disappointing if Will Hill and others moved out before the new policy is announced. A few years ago many online gambling operators were looking at relocating to the United Kingdom from Gibraltar and the Isle of Man, when the then new gambling policy was being formulated. However the United Kingdom chose a 15% tax rate and hence no one relocated to the United Kingdom.