32Red set to go Dutch as PoC tax looms
London-listed operator looks further afield as it continues to lobby government for a point of consumption compromise
Gibraltar-based operator 32Red has laid out plans to expand its international footprint after criticizing the UK government’s plans to introduce a point of consumption (PoC) tax.
Ed Ware, 32Red CEO, listed Spain, Germany and the soon-to-be regulated markets of the Netherlands and the US as markets on the operator’s agenda for international expansion.
“I think if we had to pick out a favourite to kick-off with we would go for Holland who are actively invested in regulating the market and we are trying to be as involved as we can there, but I wouldn’t discount any of the others on the list,” he said.
Ware also confirmed the operator is in discussions with interested parties as it looks to replace Betdaq as its sports betting provider. A deal is expected to be announced in Q4.
Speaking following the announcement of a strong set of H1 results, Ware said the implementation of a PoC tax would lead to the emergence of a black market and could also prove to be an ineffective tax-raising measure.
The Treasury estimates a 15% tax on all gambling activities involving UK-based consumers could raise an additional £300m per year, a figure Ware thinks might not be enough replace the potential loss in spend by operators reducing their budgets as a consequence.
“If you put that figure up against how much businesses like ourselves collectively invest in the UK market through marketing and advertising it’s actually a small number and UK plc is in danger of making itself worse off,” he said.
The Gibraltar Betting and Gaming Association (GBGA), a 23-strong team of operators that includes 32Red, is in talks with the government over the proposed tax and hopes to have some influence on the final outcome.
“We are very happy that we have the Department for Culture, Media and Sport engaging with us and also the Treasury, which I think tells us that they know there are some issues that need to be dealt with,” Ware said.
The company said it had held preliminary talks with software provider Microgaming which it said would “share some of the burden” should a 15% levy be introduced.