Yesterday the UK’s House of Commons reviewed the Gambling Bill for the second time. If the bill passes, it will have great effects on the gambling industry in Europe and worldwide. The introduction of the point of consumption tax or POC tax will greatly affect operators, customers and existing regulators.
The point of consumption regulation tax aims to solve the taxation problem for UK’s online gambling. Currently foreign online gambling operators can offer gambling products and services to the UK online gambling industry and they are not taxed by the authorities since they are not governed by the UK laws.
The POC tax will make sure that every operator that offers online gambling services to UK players is licensed and taxed in the country. This makes things difficult for operators as they already have to apply for a license from the Gambling Commission and if the bill passes they will also have to pay a tax proposed at 15% on remote gambling profits. The new regulations are scheduled to take place on December 1, 2014.
Even though most operators opposed to the POC tax at first, the larger ones seem to come around to the idea. The tax will cause big operators to become even bigger, while the smaller ones are likely to struggle and probably withdraw from the UK market. This will discourage the small operators which, in turn, will create more room for the big operators to grow even further.
On the other hand, the players will get worse deals. Because of the reduced competition the large operators won’t be motivated to offer special deals and benefits to their players, while the players will have fewer options to choose from and more expensive services. Right now the smaller operators are the ones that offer better deals to UK players.