New proposals for rules and sanctions to ensure that remote gambling operators pay taxes on their gambling profits from UK customers will come into force on 1 December 2014.

Remote gambling operators with UK customers will be liable to pay either remote gaming duty, general betting duty or pool betting duty, all of which are currently taxed at 15 per cent.

The internet has allowed companies such as Ladbrokes, William Hill and Betfair to base their online betting operations in tax havens such as Gibraltar, where they can avoid paying taxes while still serving customers in the UK and other countries.

The Gambling Commission estimates that the UK remote gambling market is worth over £2 billion ($3.1 billion) per year. The Treasury said that the new rules could bring in approximately £300 million per year in additional tax revenues.

Officials said the new rules will be supported by tough enforcement measures, including the creation of new criminal offences.

Failure to comply with them could result in prison sentences of up to seven years, unlimited fines, or the loss of a remote gambling operator’s licence to operate.

“It is unacceptable that gambling companies can avoid UK taxes by moving offshore, and the government is taking decisive action to ensure this can no longer happen in the future. These reforms will ensure that remote gambling operators who have UK customers make a fair contribution to the public finances," said Sajid Javid, economic secretary to the Treasury.