crackdown on offshore gambling companies that operate in the UK has been launched by the government in a move that is expected to clear the way for a tax grab by the Treasury.

John Penrose, the minister for tourism and heritage at the Department for Culture, Media and Sport (DCMS), said the plan would protect consumers and close a loophole giving web-based gambling companies an unfair advantage over British firms by insisting that all businesses operating in Britain are regulated by the Gambling Commission.

Penrose said: "These proposals are an important measure to help address concerns about problem gambling and to bridge a regulatory gap by ensuring British consumers enjoy consistent standards of protection, no matter which online gambling site they visit."

However, Vaughan Lewis, a leisure analyst at Morgan Stanley, added: "The government has to be careful, as you can't change the law just to raise taxes. But while the proposals claim to be driven by a desire for greater customer protection, they will also create an opportunity to levy duties on overseas operators."

When asked if it planned to tax newly licensed offshore gambling companies, the Treasury added: "We are aware of DCMS's statement and are considering it. We will make a statement in due course."

Meanwhile, Michael Caselli, editor of trade magazine iGaming Business, added: "The tax rate pretty much relates to how much less value the punter gets. A 10% tax rate is 10% less value for punters."

In a written ministerial statement that was short on detail, Penrose said the Gambling Act should be changed so "remote gambling" is regulated according to where bets are placed rather than on the bookmaker's location. Under the revamp, every company offering bets to British customers or advertising in the UK must hold a Gambling Commission licence.

Gambling industry insiders stressed that the government would have to proactively enforce the new regime and crack down on unauthorised promotions. Richard Glynn, chief executive of Ladbrokes, which has an offshore internet business as well as its retail and telephone services in the UK, added: "We will work with government towards a comprehensive solution which levels the playing field and helps protect British jobs."

Analysts said the licensing move might put further pressure on Full Tilt Poker, PokerStars and Absolute Poker, the websites that have been indicted in the US on allegations of violating gambling laws by processing cash transfers to and from players. When assessing licence applications, the Gambling Commission must consider "the honesty and trustworthiness of the applicant and or person(s) relevant to the application" and the "criminal record of the applicant and or person(s) relevant to the application". The three sites are believed to deny wrongdoing, but could not be reached for comment today.

Despite Penrose's announcement being expected, UK-listed gambling companies were still hit by the news. Ladbrokes shares dipped by 1.25%, William Hill lost 3.87% and online poker and sports betting group Bwin.party lost just over 1%.

Shares in the betting exchange firm Betfair held up slightly better, shedding 0.8% to 700.44p. However, Richard Stuber, an analyst at JP Morgan, said: "We would also note [Penrose's] comment 'As for whether people using betting exchanges should or should not pay the levy, that is precisely what we are in the middle of consulting on, so it would be rather premature for me to prejudge that.' So the tax risk on Betfair's large customers/players is not yet over, in our view."

Meanwhile, offshore operator Bodog claimed to have become the first operator to be granted a remote and non-remote gaming licence by the Gambling Commission. As well as operating online gambling websites for UK punters, it will also open high street shops.

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