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Taxes and Online Casino Profits

If you’ve ever wondered about how it is that online casinos get licensed, well, it isn’t always the easiest process to go through. Quite often, the places where online casino companies base their servers are the places where the local government bases its laws on the ruling power – with a nod in favor or against certain industries or businesses setting up shop. This is the case, for instance, in Gibraltar, where it is easier to get a license to operate an online casino than many other places, but the operations are restricted by Great Britain, which controls that territory. Great Britain, though, passed a law some months ago creating a new gambling control board, and with that it has been speculated will, finally, come licensing procedures and allowances for online casinos. But the taxes are an important issue.

A tax haven is good for an online casino business because an online casino business stands to rake in significantly more profits thanks to reduced or non-existent tax laws designed to entice certain kinds of businesses to set up shop on their territory. Online casinos are such businesses, that prefer not to have “Big Brother” looking over their operations too much, even if they are honest, because with “Big Brother” usually comes more taxes or invasive financial inquiries.

Since online casinos prefer not to have too much attention paid to them, this usually means that the farther away from the mainland, its regulations and taxes, the better. The online gambling industry thrives in places like Antigua and Gibraltar because the combination of lax tax laws and relatively easy licensing are exactly the type of business environment that online casino operators tend to look for. Out of the way, off-shore, but mostly able to business on the mainland of certain countries – online casino companies are hardly the only businesses fleeing mainland operations or prevented from carrying such operations of business out in the first place.

OCA News Editor

Jenny McKinnley is OCA’s financial correspondent. After spending years on the trading floor in both NY and London, she offers insight from the inside out on world financial news and events.

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