15% remote gaming tax for the UK

[LukeC]

Surprised not to have seen this one posted up already, but the UK Government have announced that from December 2014 all UK-facing gambling companies will be subject to a 15% tax on all remote gaming revenues from UK customers. It could cost the industry up to £300m per year. There's full details here.

[QuasarAffiliates]

Hi Luke,

Thanks for the link - just heard about it this morning. What is your opinion on this, do you believe it will go through?

Thanks,
Rebecca.

[LukeC]

Hi Luke,

Thanks for the link - just heard about it this morning. What is your opinion on this, do you believe it will go through?

Thanks,
Rebecca.

I think there'll definitely be a tax implemented, it's now just the level of the tax that non-UK based firms will try and negotiate on and also when it is brought in. It'll be interesting whether the big players up marketing spend to try and force smaller companies out of the market or whether everything is cut back, seeing as the tax will directly hit the bottom line.

[JackTenSuited]

Any idea how much this will affect Affiliates in the UK?
Will this affect revshare %s or is the tax based on company profits?

[LukeC]

Any idea how much this will affect Affiliates in the UK?
Will this affect revshare %s or is the tax based on company profits?

It affects UK players, so it would affect all affiliates regardless of where they are based. I don't know whether operators will pass the cost on to affiliates directly in the form of deductions from gross to net revenue (or whether operators are entitled to do this), but even if not, every deal is going to earn an operator c.15% less. In order to get the same ROI, you'd need to reduce a CPA by the same percentage. If operators are on tight margins, then spending at the same levels might not be feasible.

[-Shay-]

I don't know whether operators will pass the cost on to affiliates directly in the form of deductions from gross to net revenue (or whether operators are entitled to do this)

I don't know either
#GettingHaircut

I'm sure affiliates will absorb at least a portion from most operators & even more from others. I have no problems sharing costs as long as they're spelled out, reasonable, and SHARED (not passed through).

[xecutable]

Why is this only a one way street? If the operators get an additional tax, some of it has to come from the affiliate %. If the operator however manages to find a loophole and you know save something on taxes, nobody will ever hear about it nor your % will ever go up, hence clean profit. In a way looks like the gas prices around here. Oil goes up, prices go up, oil goes down, prices stay the same.