Online betting, likely including online poker, will be taxed according to where the person makes the wager instead of where the gambling site is operated.
The tax is set to be implemented by December 2014 and is expected to be levied at 15% of gross profits.
The new law marks one of the biggest changes to the online gambling industry in the U.K. since it was officially legalized seven years ago.
Industry giants like Ladbrokes and William Hill quickly moved their operations offshore to benefit from cheaper taxes.
In a story with the Financial Times George Osborne, Chancellor of Exchequer, said he believed over 90% of online gambling is currently supplied from outside the U.K.
“This is clearly not fair – and not a sensible way to support jobs in Britain,” he said.
Analysts are already predicting there will be consolidation in the industry, as smaller online gaming sites will struggle with the potentially higher taxes.
“It’s going to be great for the big boys and a disaster for everybody else,” Charles Cohen, chief executive of Probability, a mobile gaming operator, told the FT. “It will cultivate a big black market.”
While the new tax law could potentially change the way online poker sites operate, U.K. online poker players remain unaffected and still pay zero tax on their winnings.
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