Regulation round-up 20 August 2013
The biggest regulatory news from the egaming industry in the last seven days (14 August to 20 August 2013)
UK Treasury announces 15% remote gaming tax rate
UK-facing egaming firms will be subject to a 15% tax on remote gaming revenues from UK customers from 1 December 2014 under new draft regulations announced by the UK Treasury.
The Gambling Commission estimates the UK remote gambling market is worth over £2bn per year and says the new rules will attract around £300m per year in additional tax revenues.
The new laws will impact the entire UK-facing industry through the introduction of GPT on online gaming revenues, but will hit firms who have moved their online sportsbook operations offshore, such as William Hill, Coral and Ladbrokes, hardest.
UK-based firms, such as bet365 and Sky Bet, currently pay Gross Profits Tax of 15% on all sportsbook revenues compared to Gibraltar where gross profits are levied at 1% and capped at £425,000.
Analysis: UK tax rate, the games begin
The timing couldn’t have been more appropriate. Just a few hours before the opening weekend of the new Premier League season, the UK Treasury announced its long-anticipated proposal for a 15% tax rate on UK online gambling revenues. On the brink of what is expected to be the biggest spending EPL season on record from the egaming sector, the announcement will kick off a new round of lobbying and strategizing from an industry facing its biggest upheaval since the introduction of the Gambling Act.
The announcement of a 15% flat rate for all online gaming verticals drew headlines in the mainstream press in the UK with talk of up to £300m in additional tax being raised. Most of the coverage has revolved around the offshore operations of the likes of William Hill, Coral and Ladbrokes and the potential for them moving back onshore. But it will have a significant impact on all operators as the new tax will mark the first time casino, bingo and poker revenues for the vast majority of operators targeting the UK sector are taxed on a point of consumption basis.
Seven days in regulation:
Greece completes OPAP privatisation
Greece has completed the privatisation of its gambling monopoly OPAP after selling its 33% stake to Emma Delta.
The equity fund, led by Czech billionaire Jiri Smejc and Greek oil tycoon Dimitris Melissanides, has agreed a deal to pay 650m for the stake in the gambling company which exclusively operates and manages lottery and sports betting games in Greece.
The sale is subject to approval by Greece’s competition commission, and will see a downpayment of 620m in cash with the remaining 30 spread over 10 years.
LGA under pressure to resolve Everleaf repayments
The Maltese Lotteries and Gaming (LGA) has come under pressure after failing to reimburse all Everleaf Gaming players following the network’s withdrawal from the US market early last year, according to reports.
The Times of Malta reported that online poker customer have accused the LGA of “gross negligence” claiming they have lost thousands of euros to Everleaf.
The LGA announced last week that all remote gaming licences held by Everleaf Gaming Limited had been suspended and that the operator is now unable to register new players, take any further deposits or offer any games falling under the Authority’s licences until further notice.
Greek privatisation chief dismissed for ‘ethical reasons’
The chairman of the Greek privatisation agency responsible for selling the government’s 33% stake in OPAP has been dismissed after being pictured on a private jet belonging to Emma Delta investor Dimitris Melissanidis.
The Hellenic Republic Asset Development Fund (HRADF) completed a 650m deal to sell the stake in the gambling monopoly last week to equity fund Emma Delta, led by oil tycoon Melissanidis and Czech billionaire Jiri Smejc.
Pictures of Stelios Stavridis on board the jet were published in Greek newspaper Proto Thema on Sunday, prompting the country’s finance minister Yannis Stournaras to call for his resignation.
Apple amends gambling app guidelines
Apple has implemented two changes to its App Store review guidelines with egaming operators banned from accepting in-app purchases and all gambling apps required to be free to download.
The guidelines state all online gambling apps are required to have the necessary licensing and permissions in locations where they are used, and they must be free to download from the store.
Apps will also be forbidden from using in-app purchases to offer players credit or currency to use in conjunction with real money gaming, stating that apps offering to do so will be rejected.
Analysis: Apple’s changes hit casual games firms hardest
Changes to Apple’s App Store review guidelines have been welcomed by the online gambling industry as a means of removing confusion between casual and gambling apps in the growing mobile gaming sector.
The new App Store review guidelines block egaming operators from accepting in-app purchases to offer players credit or currency to be used in conjunction with real money gaming, and dictated that all gambling apps must be free to download.
PKR president Jez San praised Apple’s move, citing there to be a number of betting companies operating in countries they are not licenced to through the app store.