GPWA Times Magazine - Issue 29 - July 2014

Affiliates, get ready: The taxclock is ticking By LorienPilling W hen it comes to theWorldCup, the actionon the football pitch can seem adistant second in importance to the “globalmarket- ingopportunities” it presents for thevarious fast food, fizzydrinks, beer and car tire companies. The Internet betting sector is certainlynot exempt from thismarketingorgy. TheWorldCupgives betting companies an excellent hookwithwhich to lurenew customers and also extends the football betting season into theusuallyquieter summermonths. But the WorldCup inBrazilwill be the lastmajor football tournament before a regulatorywatershed takesplace in thebetting sector. Bothoperators and affiliateswill dowell tofill their boots before thefinalwhistleblows. At theheart of the changes is theU.K. government’sdecision to switch theU.K.’s Internet gambling regime to apoint of consumption tax.As I havewritten in thesepages before, thedecisions takenbygovernments and regulatorshave anastyhabit of filteringdown the chain tohave an influenceon affiliates’ operations. TheU.K.’spoint of consumption tax is certainlynodifferent. Begining in thefinal quarter of 2014, any iGamingoperatorwishing to takebusiness fromU.K.-based customerswill be required tohold a license issuedby theU.K.GamblingCommission.Alongside this licensing requirementwill come two important features that are already starting to influence the iGaming sector, andnot just in theU.K.: • Theobligation topay 15percent of revenues inU.K. remote gamingduty • A requirement for license applicants todisclose thegeographical sourceof certainparts of their revenues and the legal positionof theseoperations Manyoperators currently targeting theU.K. do so from low-taxoffshore jurisdictions likeGibraltar andMaltaunder theWhiteList setup,which will be endedby thenewpoint of consumption tax. Paying 15percent on revenues is an immediate increase in anoperator’s cost base and thebig players are already looking atways tomitigate thisnew cost. Speaking in an investor call earlier this year,WilliamHillCEO andCFORalph Topping stated: COVER STORY Affiliates, get ready: The tax clock is ticking