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 ?

South African Draft Remote Gambling Bill of 2014 - The wheels turn slowly as the South African Draft Remote Gambling Bill of 2014 was published in the Government Gazette this week, but it still has a long way to go.

Jewel of the Arts Slot Launched - Showing distinctive and beautifully designed Asian style graphics, features include Wilds, Multipliers, a Free Spins Bonus Round and a Fan Dance Bonus Round.

EPT Season 11 Schedule - The European Poker Tour has released five dates for its Season 11 tour kicking off with the EPT Barcelona Poker Festival.

New Online Casino Launched BlingCity - The new online venue claims an innovative concept in melding online gambling with social media by offering a "constantly evolving world" where players can visit different locations.

REALISTIC GAMES LAUNCHES MOBILE PULL TAB GAMES - The four new additions to the provider's expanding portfolio combine the nostalgia of this popular game genre with the latest mobile technology, with titles like Golden Koi, which blends traditional fruit machine symbols with Japanese-inspired graphics and music, and the Irish-themed Pot Luck.

Patrick Clarke wins 2014 Paddy Power Poker Irish Open - Patrick Clarke will be delighted with his return on investment over the holiday weekend, which saw him turn a Euro 4 online satellite entry into a main event win totalling Euro 250,000 in the Euro 2,250 buy-in 2014 Paddy Power Poker Irish Open.

OPAP's exclusive deal could be in trouble - With the European Commission breathing down the Greek government's neck, the Emma Delta-owned Greek gambling group OPAP could find its sweet monopolistic online sports betting deal somewhat diluted.

888 Snap Poker Now Even Faster - Following an exhaustive testing process 888Poker has released its accelerated version of the popular fast-fold poker variant, dubbing its new product Snap Poker.

WEAK FISCAL Q2-2014 RESULTS FROM I.G.T. - International Game Technology's operating results for the second quarter ended March 31, 2014 show continued growth in the interactive division, but rather dismal numbers from the diverse group as a whole.

Amendments to the Polish Gambling Act allow wider gambling payment processing - In a bid to meet European Commission demands regarding free movement of goods and services within the European Union, the Polish government's highly restrictive and nationalistic laws on payment processing - a critical feature in online gambling activity - have been relaxed.