The Place of Consumption tax has been a bruising issue for the UK gambling industry, ever since it was introduced in 2014. However, we’re not the only country that has been suffering through turmoil because of the tax. Australia has a history of borrowing British legislation into their own laws and it seems it’s no different when it comes to rules governing mobile casinos, because South Australia plans on introducing the tax.
Now, it seems a group of Australian bookies are making a collaborative campaign against the proposed bill, a move which is breathing new life into the debate between casino operators and the UK Gambling Commission (UKGC) in this country.
Have you noticed how in the last couple of years how loads of the mobile casinos you’ve been playing at have started getting licensed by the UK Gambling Commission, where previously they were regulated off-shore? That’s all because of the Place of Consumption (PoC) Tax.
Places like Malta, Gibraltar and the Channel Islands were once a stronghold of online and mobile casino operators outside the full regulation of the UK tax authorities. However, because of the nature of the service they were offering, the UK government grew unhappy that they were making money from UK players, paying no tax in the UK on their revenue and paying the lower rate of tax in the country or territory they were based.
In came the Place of Consumption tax, a 15% tariff designed to allow HMRC to tax the revenue of businesses operating abroad, but making money from consumers in the UK. This may seem like common sense and you may think it’s a good idea for the Australian government – which cites similar issues with companies based in Asia operating in Australia – to introduce a similar tax.
However, when you realise how damaging the introduction has been on the UK online and mobile gambling industry, you start to realise why it might not be such a good idea after all.
The introduction and implementation of the PoC tax has been a painful one for British casino operators and players alike. Firstly, the introduction came hand in hand with a new rule that all online or mobile casinos operating in the UK must hold a UKGC license. For many casinos this means great expense to acquire a license and a change in operating behaviour to be eligible for one.
Moreover, casino companies based outside the UK now found themselves effectively facing paying tax twice on their earnings from UK players – many of those who had the ability relocated at great cost to the UK, while others simply stopped operating in this country, merged their operations with other brands or simply shut up shop entirely.
This obviously impacted smaller mobile casinos much more than their larger counterparts who could better absorb the cost, and has really impacted the playing landscape throughout the industry, with less choice in casinos and lower profits meaning less generous bonuses and promotions.
As South Australia moves to introduce similar legislation of its own, a coalition of gambling operators has come together under the name Australian Wagering Council to try and prevent the state becoming the “most expensive place to bet in the world.” While many see the debate ended and the dust settled on the UK’s PoC tax, online and mobile casino operators and players alike will be watching what happens down under with great interest.
If the AWC can successfully see off the imposition of the tax in South Australia, then there’s every chance that we’ll see new legal challenges in the UK, using the precedent set in Australia as a new argument to repeal the tax. This could be a turning point in the fight against the Place of Consumption tax and we should all keep one eye on the action.