- Industry association, the Remote Gambling Association (RGA) has issued a press release strongly condemning the latest UK budget which continued to propose the point of consumption (POC) tax Gaming Duty at 15%.
- “Not only KPMG, but other respected experts at PwC and Deloitte, have all reached the same conclusion that any rate above 10% GPT is not sustainable in the long term” said RGA CEO Clive Hawkswood.
Industry lobby group the Remote Gambling Association (RGA) has issued a press release strongly condemning the latest UK budget which continued to propose the point of consumption (POC) tax Gaming Duty at 15%.
The RGA argues that the 15% rate poses three “dangers” which KPMG identify in a report it prepared at the RGA’s behest:
- Firms are unable to recover their costs and either go out of business or are forced to operate in the grey market;
- a very large number of UK customers switch to buying gambling products from offshore duty avoiding providers because they are able to offer lower priced, more attractive, products;
- Such consequences will be difficult to reverse, even with a subsequent reduction in the tax rate.
“Not only KPMG, but other respected experts at PwC and Deloitte, have all reached the same conclusion that any rate above 10% GPT [Gross Profits Tax] is not sustainable in the long term. We cannot make the case any more clearly,” said Clive Hawkswood, Chief Executive of the RGA.
The second issue which concerns operators is that the new tax regulations will not make allowances for bonuses and incentives.
“This heightens the risk that British licensees will lose significant market share to black market operators,” Hawkswood continued.
One member of the RGA, which boasts all of the large UK operators as members, is William Hill plc. In a presentation to investors following its third quarter results last year, CEO Ralph Topping saw advantages in the new POC tax.
“I’m confident that point-of-consumption tax has a silver lining in it, and that is the growth of market share,” Topping told investors.
“Our intention as we go through it is those who are struggling, we’re going to shove a hosepipe down their throat and turn the tap on,” He added rather menacingly.
The impact on players of the 15% is difficult to determine, and depends to an extent on the effectiveness of measures to combat the gray market. If licensed operators have the full market open to them, then they can absorb most if not all of the extra tax costs, but if gray market operators take a substantial share, they may have to pass on extra costs to their customers.
