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Uk In A Gambling Frenzy As Betting Becomes Nationwide Craze

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Britain Bets on Internet Casino Games

By legalizing online gaming, it hopes to bring betting companies in from offshore -- and bring tax revenues home

BusinessWeek Online

By Kerry Capell

Updated: 12:00 a.m. ET May 16, 2006

It doesn't have any ritzy Vegas-style casinos -- at least not yet.
But Britain has gone mad for betting
. Newsstands are crammed with glossy gambling magazines and a national daily newspaper devoted entirely to games of chance launched last month. Some cable and satellite channels air nothing but poker and casino games. This year Britain even opened the world's first casino college, where croupier trainees learn the tricks of the trade. Now, the government hopes to make Britain the global hub of online gambling.
Britain has already laid out the welcome mat for online betting firms which allow customers to wager electronically on everything from horses and soccer matches to the winners of reality TV shows and the Oscars. Such Web sites are operated legally by traditional street-corner bookies like Ladbrokes and William Hill, as well as by Web upstarts such as Sportingbet, UKbetting, and Betfair. They pay 15% of their gross profits in tax. So far, that's been a pretty good bet for the government: Tax proceeds have topped $2.5 billion for the Treasury since 2004.
Now Britain is set to increase the stakes. Parliament has enacted sweeping new legislation that will open up the online market, starting next year
, to traditional casino games such as poker, blackjack, and roulette. Britons already play such games by the millions, but the companies offering them are based in offshore tax havens such as Gibraltar, the Channel Islands, and Costa Rica. The government hopes that by becoming the first country in the developed world to legalize online gambling, it can lure offshore outfits to locate on British soil and pump even more revenues into public coffers.
It's a huge opportunity. Bookmaking has been legal in Britain for nearly 50 years, and the British are notorious for their love of betting. But the Internet has drawn in millions of new punters who never would have set foot in the betting shops found in every British town. From the privacy of their own homes,
Brits wagered an astonishing $40 billion last year alone,
according to Christiansen Capital Advisors, a New York-based consultancy which tracks the gambling industry.
British investors also are playing the game. Attracted by the more favorable regulatory environment, three of the world's biggest Internet betting outfits, including Partygaming, went public on the London Stock Exchange last year in multi-billion dollar listings. "Britain is already the global leader in betting and now it looks likely to become the world capital of Internet gambling as well," says Professor Leighton Vaughan Williams, director of the betting research unit at Nottingham Trent University.
That's unleashing dot com-like wealth creation
. Partygaming's flotation last year made billionaires of its four founders. One of them, former electrical engineer Vikrant Bhargava had never played poker or seen the inside of a casino until he joined the Gibraltar-based company in 2000. Back then, he says it was "a bit of garage operation" with 40 employees. No longer. Thanks to aggressive marketing and the explosive growth of poker, Partygaming's revenues hit $978 million last year, up from $30 million in 2002, and earnings

THe UK seems to have become one giant speculative economy whether we bet on the next HPI or HPC or MEW to play online poker.

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they would obviously move the servers out of gibralter is the tax was raised.

plus i really feel the weath generation from casinos is ramped by casino vested interests.

oh yeah wow. it'll bring loads of jobs....

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  • 301 Brexit, House prices and Summer 2020

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