Upon Further Review: UK Reverses Unattractive LegislationPublished December 11, 2016 by Lee R
In a constructive and innovative discussion, the UK has amended some online policy to meet operator needs more realistically.
A UK Parliamentary decision has revised a controversial tax plan for online casino and bingo freeplays.
Source of Controversy
The controversy began in March of this year with Chancellor George Osborne announcing the end of an exemption of online casino and bingo operators from the general 15% general betting duty on free or discounted online sports or race bets, which was slated to take effect on August 1, 2017.
Operators’ staunch opposition to the decision was compounded by other duties just levied from 2014, including a 15% online point of consumption tax on gambling revenue and a Machine Games Duty increase on retail betting operations of bookmakers from 20% to 25%.
In an innovative format of technical consultation, 10 online operators, three advisors or tax representatives, and a member of the Remote Gambling Association RGA were given the opportunity to express to Her Majesty’s Revenue & Customs (HMRC) their opposition to HMRC’s decision to conclude the exemption.
Concerns voiced by respondents included HMRC’s across the board tax on freeplay “re-wagering requirements” in which customers play through their winnings to pre-conditioned values before withdrawing their winnings that do not become taxable until the player has met said rollover requirements.
The operator spokespeople expressed concern that that would lower revenue contributions to the crown as well as discourage or freeze out new entrants.
HMRC’s Diplomatic Adaptation
HMRC’s solution is to harmonize the online freeplay regime by “taxing the first use of freeplays only” with winnings to “only be brought into the duty calculation at the end of the re-wagering process.”
HMRC further decided to exempt free-play games from the remote gaming duty while exempting prizes realized from duty calculation.
Glass Half Full
HMRC did throw back the request to push back the August 2017 delivery date for the new changes to take effect, deeming the timeline reasonable, implying that operators should quit while they were ahead after the already significant concessions.