Norfolk Island May Not Be Such a "Safe Haven" For Gaming Anymore

People who follow the online gambling are aware of at least a couple of the territories in the United Kingdom that have a strange relationship with the government, in that they are quasi-independent And thus have had the latitude to act as a home and licensing "jurisdiction" for online gaming companies. The Isle of Man and Alderney are two of those places that come to mind immediately. Australia has a place like that too - Norfolk Island is not only a very attractive tourist destination, located 1,412 kilometers off the coast of the country, but it also exercises a certain degree of autonomy. Originally settled by Polynesians, it enjoys many of the trappings of its special status, including the fact that its residents do not pay Australian federal income taxes.

As a result, it has become an attractive home for a few online gaming operators - Betstar, Ladbrokes and Bookmaker.com.au - who are all licensed to do business through the Norfolk Island Gaming Authority. These sites pay a fee to the local government and experience the tax benefits that follow, although it is not considered to be something that makes an appreciable dent in the local economy. That's a shame, because Norfolk Island has found itself near bankruptcy.

Of course, one can expect that competitors of the aforementioned gaming destinations have squawked. The loudest, as expected, is Tabcorp, which has made plenty of complaints related to the proposition that there is no "level playing field" because of the different tax situation they have. Tabcorp has been lobbying with the Australian government for "loopholes" to be closed, so as to be good for racing.

None of this would be all that much to worry about, if it wasn't for the fact that Norfolk Island is in such bad financial shape that they have petitioned the federal government for a bailout. Because it has been suggested to the feds, by Tabcorp and others, that they should be seeing some of the money that is generated by the gaming sites under the NIGA's jurisdiction, the demand in return might be that the island's residents be compelled to start paying federal taxes, and there has even been a suggestion that Norfolk Island be annexed by New South Wales, which at that point would bring their licensed operators under NSW regulation.

Whichever way you slice it, this does not sound like a favorable situation for the island, or for the Ladbrokes-owned properties that are operating with their help.

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