A KPMG report commissioned by the Remote Gambling Association (RGA) last year concluded that the UK’s 15% point-of-consumption tax (POCT), that will take effect December 1 of this year, will not only fail to achieve its stated aims of protecting consumers, it could put UK-facing operators out of business. Because the tax regime is causing a lot of buzz around the iGaming industry, we decided to ask our readers, how should operators make up the 15% POCT?
63% answered, “Just eat the tax”. As Global Betting and Gaming Consultants’ founder Warwick Bartlett pointed out in a recent blog post, any time that changes are made to the taxation of an activity, they are almost always going to heavily in favor of the government.
26% answered “Less Bonuses”. To make ends meet, it would be ideal for companies, specially the smaller operators to lessen the bonuses they give out because With no economies of scale to fall back on and smaller customer bases from which they will be receiving a reduced profit, it’s possible that several smaller operators will turn their backs on the UK or even cease to exist.
11% answered “Change the odds”. In a sector where value is a primary factor in the acquisition of many potential customers, being able to offer improved odds would be a simple move to increase profit. It’s not exactly a viable option but we’re trying to look at possible solutions, right?
While the UK government insists the true intent of the POC tax is to bring operators under the regulatory umbrella of the Gambling Commission and thereby offer UK punters greater protection from online shenanigans, the Treasury has estimated the POC tax would boost government revenue by £300m annually.
In other news from across the pond, Jason Ader said Bwin.party needs a management shakeup after a dismal Q1. With that in mind, we ask our readers in this week’s poll if Norbert will be the CEO of Bwin.party one year from now. Check back next week to see what our readers think.