888 Believes the New UK POC Tax May Lead to an Increase in Marketshare
UK-facing gaming operators are bracing for the UK government to push through a new gaming bill into law adding a new point of consumption (POC) tax. While the Gibraltar Betting and Gaming Association (GBGA) promises to fight this new gaming bill in the higher courts, it isn't all doom and gloom for the biggest gaming operators, including 888.
If this bill is passed as expected, the POC will tax all UK-facing operators 15% on their remote gaming gross profits beginning Dec. 1, 2014. According to 888 Holdings' 2013 financial reports, 41% or $163.3 million of 888's group revenues come from the UK. To put this into perspective, this is more revenue for 888 than the rest of Europe combined with 40% or $161.7 million.
Gibraltar-based 888 plans to work with the GBGA and its more than 20 members to fight this bill in the higher courts.
Brian Mattingley, Chief Executive Officer of 888 Holdings stated in an interview with eGaming Review, "We are sat with the GBGA and all its members and working with them [to see] whether we believe it’s genuinely for the good of the consumer, as if it’s not good for the consumer you can’t employ regulation just enabling you to collect tax — that’s against the European directives."
"We are working with our colleagues to explore whatever avenues we can,” Mattingley said. “But if we get a year’s delay, well that’d be heaven."
While this may seem like all bad news for all UK-facing operators, 888 sees a potential bright side for the bigger UK-facing operators due to this proposed bill creating a more competitive marketplace thus allowing the bigger operators to potentially increase their overall UK market share. 888 also believes that we should see some consolidation, especially amongst the smaller operators to better position themselves when this bill passes.
Mattingley stated in the Market Overview section of the 2013 888 Holdings financial reports, "In more mature markets such as the United Kingdom, we anticipate that there will be further consolidation given the advantages of scale, brand and technology that larger operators can employ in a more competitive environment. This trend will be reinforced by the planned introduction of a Point of Consumption Tax in the UK, due to take effect from December 2014. "
Stay tuned at PokerNews for more news as it happens regarding the proposed POC tax in the UK and the GBGA challenge.