Casino City's iGaming Pocket Directory - 2015 Edition

98 Sponsored by Casino City’s iGaming Pocket Directory JURISDICTIONS The 15 percent point of consumption tax is a tax on gross profits collected on any revenue generated by bets placed in the UK. The new tax regime also requires any gaming operator doing business in the UK to acquire a UK gaming license. Prior to December 2014, most of the big operators in England operated offshore, where they faced tax rates as low as 1 percent. England’s new point of consumption tax is just the latest instance of a European country trying to generate a revenue stream by taxing the online gaming industry. In France, licensed operators can only offer sports betting and poker. Online casinos are illegal. Poker and sports betting are taxed heavily and in a specific way. Each poker pot is taxed 2 percent – which has to be paid by the players. The 2 percent tax is not figured into the rake. There’s also a 2 percent tax on tournament entries. There’s an 8.5 percent tax on each sports bet made. These high tax rates have virtually hobbled the industry in France. In addition to tax costs, the burden of complying with regulations in different countries has increased the cost of doing business as well. And once again, France has some of the most onerous regulations in Europe. Private data for French players must be stored on special servers. Just as important, French players cannot play against players outside France. The French market has been removed from the worldwide liquidity pool. So have the Spanish and Italian markets. The new regulatory schemes are also affecting players as well. Players are seeing higher rakes and poorer odds in many instances. But they’re also seeing some increased consumer protections. The US is in the process of repeating the same mistakes Europe is making – and seeing any progress it’s made wiped out at the federal level. At the end of 2011, the US Department of Justice gave the approval for intrastate online gaming – gambling (except for sports betting) that’s contained by the borders of one state. Three states – New Jersey, Nevada, and Delaware – have taken up the cause. And each has had a different set of regulatory standards. More importantly, in the November 2014 elections, the Republican Party took control of Congress. And with billionaire Republican power broker Sheldon Adelson pushing Congress to ban all forms of online gaming, there’s a chance federal action will be taken in 2015 that will curtail the growth of online gaming – if not outright ban it in most states. On both sides of the Atlantic, the online gaming industry’s inability to speak with a single voice has been a tremendous hindrance to the creation of a common sense regulatory scheme. The industry simply does not hold the ability to influence legislation that other industries with similar revenue profiles do. Until the industry learns to come together and speak with one voice, it won’t be able to solve that problem. And it will have to live with a mishmash of regulations, with no sign of harmonization on the horizon. IGAMING JURISDICTIONS overview