- “In more mature markets such as the United Kingdom, we anticipate that there will be further consolidation given the advantages of scale, brand and technology that larger operators can employ in a more competitive environment.”
- 888’s positive take on a substantial new tax burden this year echoes that of William Hill who, in their Q3 2013 financials, asserted that the POC tax could lead to “market share gains,” adding that the group “[sees] that as an opportunity.”
In 888 Holding’s shining 2013 full year financial results, the group was bullish on the opportunity in the forthcoming introduction of the UK’s new Point of Consumption (POC) system.
“In more mature markets such as the United Kingdom, we anticipate that there will be further consolidation given the advantages of scale, brand and technology that larger operators can employ in a more competitive environment,” reads the statement.
“This trend will be reinforced by the planned introduction of a Point of Consumption Tax in the UK, due to take effect from December 2014,” it continued.
The UK market is critical to 888’s success. Revenue from UK customers amounted to $163.3m in 2013—more than 40% of the group’s total revenue—compared to $161.7m across the rest of Europe combined, $46.4m in the nascent American markets, and $29.1m in the rest of the world.
On December 1, new online gaming regulations will come into force in the UK. It will require all operators who accept wagers from UK customers, including online poker rooms, to obtain a license from the UKGC and must pay a 15% tax on gross profits from such customers.
888’s positive take on a substantial new tax burden this year echoes that of William Hill who, in their Q3 2013 financials, asserted that the POC tax could lead to “market share gains,” adding that the group “[sees] that as an opportunity.”
More colorfully, William Hill’s CEO stated in the investors call that, for small operators “who are struggling,” they would “shove a hosepipe down their throats and turn the tap on.”
Yet publicly, the industry is decrying the introduction of the new taxation with PR rhetoric, doomsday predictions and threats of legal action. According to the RGA, an industry group comprised of gambling operators licensed offshore, the new system “heightens the risk that British licensees will lose significant market share to black market operators,” as a large number of UK customers switch to more attractive offers on unlicensed sites.
