WARNING ON UK INTERNET GAMBLING SECONDARY LICENSING AND TAX

01/03/2012 : Independent survey says online gambling tax plans may drive punters to unregulated sites.

With momentum in the UK building for a 'secondary licensing' regime and taxes, the William Hill gambling group has gone on the offensive as the new year starts, again drawing attention to an independent survey it commissioned.

The study, conducted by respected international professional services group Deloitte, found that the British government's proposals for a point of consumption tax on online gambling could backfire, with punters driven to unregulated sites, and smaller operators forced out of the market.

Deloitte concluded that levying such a tax at 10 percent would seriously hurt the government’s “consumer protection policy objectives”. It additionally found that as much as 27 percent of current revenues would disappear into the “grey”, or unregulated, market. And at 15 percent tax, that figure rises to 40 percent.

The survey found that the most marginal operators, accounting for up to 13 percent of UK online bets, could be “expected to exit following the introduction of a 5 percent tax”. That would not only push more UK punters into the unregulated market, but there would also be a knock-on effect on gambling companies’ revenues and marketing spend, hitting both corporation taxes and sports sponsorship.

William Hill has submitted the report to the Treasury, which is reviewing a possible new tax regime for remote gambling.

The Telegraph newspaper, reporting on the Deloitte study, says that UK consumers currently spend about GBP 1.7 billion a year – roughly 18 percent of total UK gambling revenues – with online gambling companies. At present many companies - including William Hill plc - escape the 15 percent gross profits tax levied in the UK by locating their internet operations in tax havens like Gibraltar, Malta, Alderney and the Isle of Man.

The new proposal would see any operator wishing to access the UK market being required to take out UK licensing and pay an as yet unquantified UK tax rate, on grounds that online gambling takes place at the point of consumption i.e. the player's hardware.

Deloitte points to the US, France and Italy in illustrating that attempts to control online gambling have “failed to prevent the emergence of a large unregulated sector”, not least because of the difficulties of introducing enforcement mechanisms such as blocking internet service providers or types of financial transactions.

Ralph Topping, chief executive at William Hill, told the Telegraph: “Money will always find a way out. More people will go overseas or to fly-by-night, unregulated sites where the consumer is not protected. I hope the Government sees sense on this.”

Assuming “ineffective enforcement”, Deloitte finds that a 15 percent tax rate would bring in incremental tax of GBP 116 million after adjusting for a GBP 57 million fall to GBP 76 million in corporation tax. That would be at the price, however, of exposing many more consumers to unregulated, and possibly unsafe, gambling sites.

A Treasury spokesman said: “Responses to the review are in and are being analysed.”

New Racing UK free-to-watch show - Wake up to Luck on Sunday – join Nick Luck and guests for new Racing UK free-to-watch show. BHA Chief Executive Nick Rust to appear on first broadcast this Sunday

MLB Odds: Stroman Gets the Nod Against Royals - The Toronto Blue Jays (70-80, –20.18 betting units) begin their final home stand of the 2017 campaign this Tuesday when they welcome the Kansas City Royals (73-76, +2.56 units) to Rogers Centre. Sportsnet has the coverage at 7:07 p.m. Eastern.

Microgaming QuickFire enters Coloumbia - Wplay signs for Quickfire; strategic deal sees Quickfire enter Colombian market. Colombian-licensee Wplay has signed a deal for Quickfire, powered by Microgaming.

Partypoker to sponsor WSOPC Uruguay - Partypoker to sponsor WSOPC Uruguay in December. Qualify exclusively on partypoker for WSOP Uruguay Main Event. December 7th to 17th in beautiful Punta del Este.

MLB Odds: Jays Hope to Spoil Orioles’ Visit - The 2017 season is just about over for the Toronto Blue Jays (66-77, –21.19 betting units), but they can play spoiler in Tuesday’s game against the visiting Baltimore Orioles, starting at 7:07 PM ET on Sportsnet.

Money Storm Casino - Money Storm is not your typical online casino. While many focus on the quantity of games they offer their players, this one is more focused on the quality of their games.

Big Online SLot Win on Ultimate 10X Slot - At 9.20PM on August 28th, Kasey R was enjoying the new Ultimate 10X three-reel slot at Miami Club. The game has a random 'must win' progressive jackpot that is guaranteed to pay by the time it reaches $25,000

MPN Greatest Poker Player in the Universe - The MPN announces the third annual Universal Championship of Poker (UCOP III), boasting €750,000 guaranteed across 59 tournament events this September