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.”

USA Gamblers : Did you remember to get your new, unique, exclusive Bovada Bonus Code ?

Improved mobile targeting For betfred - The campaigns, which reach over 100 000 subscribed players, aim to provide relevant and targeted messaging while bridging between the online and physical sectors.

Inspired Gaming Signs 5 Year Extension With William Hill - Inspired Gaming Group has signed a five-year extension to its long term partnership with William Hill for the supply of server-based video lottery gaming machines and Virtual Sports.

Asian Betting Sites Lying About LGA Approval - Malta regulator Lotteries and Gaming Association has warned it has no connection with Asian-facing online gaming website hg68.com, saying its licensing claim is both false and misleading.

Dutch Gambling Bill Moving Forward - Amendments to the Dutch Gambling Bill, which include gaming tax reforms, remote gambling law and laws on games of chance, have been remotely submitted to the Lower House of Parliament.

Move To Tighten Philippines Online Gambling regs - Policeman turned Philippines lawmaker Rep. Samuel Pagdilao is concerned about the dangers to young people that he feels online gambling represents, and this week launched House bill 4540 in an attempt to tighten regulation.

June revenues up 14.4 percent in Nevada - The latest performance figures from the Nevada regulator show that land casinos in the Silver State enjoyed a 14.4 percent increase in overall revenues in June, thanks mainly to a surge in baccarat win.

Parx Casino adds To Play4Fun SIte - The Parx land casino in Pennsylvania is spreading its free-to-play social casino games business around, adding the Play4Fun site with software from Williams Interactive to its selection from GameAccount Network .

Political donations Against Internet Gambling Up - Looser restrictions on the amount that businessmen can spend on political contributions have seen an up swell in political donations led by Sheldon Adelson's campaign against online gambling, the publication Opensecrets reports.

South Carolina Residents Negative On Online Gambling - Respondents to the latest Palmetta Politics poll in South Carolina gave a negative reaction to the hypothetical legalisation of online gambling in the state this week, with 68 percent opposed to legalisation, 17 percent in support, and 15 percent undecided.