UK Remote Gambling Duty

[MiltonFriedman]

"For it they get the ability to advertise in the UK(and EU)..."

ANY EU licensee will have that ability. This was just a stupid, anti-competitive grab, like the last time they tried to overtax online gaming and companies left the UK.

[tangled]

Is the UK firm on this percentage do you think, or is this just the opening to negotiations?

[Richas]

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Is the UK firm on this percentage do you think, or is this just the opening to negotiations?

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It is firm. This was the budget announcement. Also this 15% is of profits NOT revenue. The arrangements with the Isle of Man and Gibraltar to allow joint licensing & advertising are not clear, I am not sure that they are in the public domain, but I would expect a tax revenue split to be part of it. This duty is for UK based gaming, the companies would still have their corporate tax wherever they are incorporated.

Betfair and Ladbrokes are probably fine with this as they pay the same rate on other UK gambling, they wanted to be sure that the online competitors were paying the same rate as them. Stars and Full Tilt will not be interested as they would have to give up taking US players (or run two setups), Party and 888 face a tough choice. New entrants like Harrahs though may well be happy to take the legitimacy and the certainty of continuing access to the market to justify the startup and startup marketing costs. It would also help a US firm to startup online as legitimately and regulated as possible and then use this to lobby for access to the US market after establishing themselves.

[context]

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Is the UK firm on this percentage do you think, or is this just the opening to negotiations?

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These things are anouced in the "Budget" - which is nominally a twice a year thing (though there is a "main" budget in march, and a "minor" one in autumn). Tax rates can be set/reset in either.


Seems a strangely clumsy move to put the tax rate at this level, Gordon is usually smarter that this. He must think that the benefits will somehow outwiegh the costs for thses companies.

[SmokeyRidesAgain]

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It's 15% on the revenue, not on profit.

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Government rake!

[Richas]

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It's 15% on the revenue, not on profit.

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Government rake!

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Well yeah but it is rake on the profit not the turnover.

I was hoping the rate would be a bit lower and that Gordo would be smart enough to do this but I think the problem was that the 15% rate already applies to UK bookmakers, if he introduced a lower rate for foreign owned/online only companies he would have to lower the tax in the UK. The fear of lost revenues outweighed the hope of new revenues.

[tangled]

Thanks for the info Richas.

Does anyone have an opinion on whether this would leave any room for profit for the player?

[Richas]

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Does anyone have an opinion on whether this would leave any room for profit for the player?

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Should be fine. Online sites are very profitable enterprises, it is a competitive market, they will not be able to push up rake or cut bonuses to cover the 15% and still grow the business. The deal is 85% of the profit in a regulated market, the owners/shareholders can eat that, in fact they can make more if they grow the business.

[Little_Luck]

Wouldn't this deal hurt rakeback and bonus deals? Is it 15 pct on their gross revenue, before accounting for affiliate kickbacks and bonus comps? Or is it 15 pct after accounting for all those charges?

[Richas]

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Wouldn't this deal hurt rakeback and bonus deals? Is it 15 pct on their gross revenue, before accounting for affiliate kickbacks and bonus comps? Or is it 15 pct after accounting for all those charges?

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It's on profit so after.