Online gambling providers will pay for their incentives soon

The coming news is not very good for the UK online gambling providers. According to a couple of UK newspapers, the government plans to increase taxing free spins and bonuses launched by the online gaming establishments. The expected sum is about £100 mln on the online industry.  Online providers offer free spins, bonuses and other freebies as a means of attracting gamblers.

Reasons of new taxes

The reason for such initiative was explained by Her Majesty’s Government. Land based casinos have already been paying such taxes for bonuses or other freebies. By means of imposing taxes on the online freebies, the government intends to equal a level playing field between online and land-based providers.

As the department of Revenue and Customs has informed, the additional taxes will be introduced since autumn 2017.

Remote Gaming Association about the new taxes

The chief of the Remote Gaming Association Clive Hawkswood has criticized this intention. He noticed that the government had already budgeted £300 mln as tax revenue from the offshore operators by means of 15% Remote Gaming Duty. Gambling industry pays now twice more. He commented, “Since the tax was introduced, the industry has been growing by about 10% a year, which has contributed to the higher tax receipts.”

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The independent data have supported Hawkswood’s estimations. One of the minor online gaming providers has informed that they are already paying £10 mln per year as a consumption tax. And bigger gaming operators pay even more. For instance, last year William Hill paid £54 mln.

Possible consequences

The observers have commented that this plan is a hidden tax, which aimы to affect smaller providers in a negative way. This can lead to consolidation between gaming operators by means of acquisition of smaller companies or mergence with bigger ones. As a result, the competition in the industry will be reduced and online gamblers will have less variety in freebies offered. The providers will also have to reduce the number of incentives to pay fewer taxes. The same situation was observed a couple of years ago when the point of consumption tax was imposed. Big companies like 32Red and Fortune Lounge have taken smaller providers.