Industry News
Culture minister James Purnell last week announced a list of overseas territories that he said met "strict standards" of regulation.
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Tax Havens
Tax havens within the European Union, including Gibraltar, where the vast majority of online operators are licensed, automatically qualify to advertise in Britain under European law, according to Purnell.PokerStars became the world's largest Internet poker group in fall, and it is safe from legal problems, for it by keeps its computer servers in well-known tax havens.
The company operates under a Mohawk reservation gambling licence in Canada but is in the "process of switching" to the Isle of Man, off the coast of England. The firm William Hill, with casino and poker sites in Curacao, is also in the final stages of switching to a tax haven from which it will be able to advertise to British gamblers.
The rules governing online gambling advertising have changed radically in just the last few months, experts said.
At a conference on gaming last year, the Gambling Commission's chairman, Peter Dean, said: "Everybody who offers gambling in Britain will be required to be licensed by us. This applies to terrestrial gambling as well as e-gambling."
Thus far, none of the major Internet operators has sought a U.K. licence because of what is seen as the prohibitively high 15% remote gaming duty. A spokesman for one online gambling firm called the rate "a bad joke."
Those relying in on more relaxed tax regimes abroad include stock market-listed PartyGaming.com and 888.com as well as the poker and casino divisions of Ladbrokes, William Hill and Gala Coral, experts said.
Gibraltar-based firms said that they are subject to "strict regulation," but critics say customers pass an age test just by clicking an "over-18" box. The Gambling Commission requires operators to verify a customer's age within 72 hours.
Internet gambling companies have agreed a "voluntary code" on TV campaigns before rules on advertising are liberalized next month. The Gambling Act 2005 abandoned the core principle of previous legislation: that demand for gambling services should not be stimulated by marketing. Since the introduction of the lottery, this position has been hard to enforce, however, experts said.
