Point of Consumption on Gross Revenue from 2017

[casionmark]

I have been running an affiliate site for casino and slots for a few months. I recently heard from someone who works in the industry that from 2017 POC tax will be on Gross, not just Net Revenue. Does anyone have any further detail on this and any idea what the likely impact will be on affiliate revenues?

Did the introduction of POC on Net Revenue make a big difference when it came in? Has the full 15% been passed onto affiliates? I can't see it in the reporting - maybe Im not looking in the right place.

Thanks

[LukeC]

Currently casino POCT is on Gross Revenue - Bonus Costs. As is bingo.

From August 2017 casino / bingo POCT will be on Gross Revenue. This is already the case for Sports.

To use an extreme example, currently:
User signs up and gets £10 worth of free spins, then deposits £100, and is given a £400 bonus. They lose everything.

Currently the POCT tax obligation is £100 * 15% = £15.00

In 2017 the POCT tax obligation will be (£10 + £100 + £400) * 15% = £76.50

It is hard to anticipate how much bonuses will change, because the market is so competitive. I don't see a major reduction in bonuses because they are pretty much the only way that any casino retains players, which will hurt affiliate revenues. The one thing I don't expect is for operators that offer NDBs / free spins to withdraw them.

The one change I think you will see a lot less of the high amount, extreme % bonuses with horrific wagering requirements - as they will make a lot less financial sense (as above shows). Once you have taken out other costs (e.g. supplier fee), there's pretty much no net revenue left.

You won't be able to see this in any reporting because gross to net deductions are rarely told to affiliates. There are a few threads on here about them at the moment.

[casionmark]

Thanks. To my knowledge most casinos operate with bonus budget around 20% of deposits (although this is an average across different customer segments - new customers and VIPs get more). So the overall affect on affiliate revenues will be much smaller than it was when POC was first introduced - though clearly still unwelcome and making things even harder.

I'm assuming operators pass the entire 15% onto affiliates.