Casino City's iGaming Pocket Directory - 2016 Edition

90 Sponsored by Casino City’s iGaming Pocket Directory UNITED KINGDOM & EUROPE The online gambling industry’s first full year under the new U.K. point of consumption (POC) tax resulted in seismic shifts in the industry as online gambling firms looked to mergers and acquisitions to soften the blow of the new tax. The 15% tax on gross profits is collected on any revenue generated by bets placed in the U.K. The regime also requires any gaming operator doing business in the U.K. to acquire a U.K. gaming license. Before December 2014, most of the big operators in England operated offshore, where they faced tax rates as low as 1%. The new 15% tax on gross profits significantly eats into overall profits, and it’s changing the industry in ways that were expected and ways that were completely unexpected. In the expected camp, offshore jurisdictions like the Isle of Man are looking for ways to give operators financial relief from the new tax. Also in the expected camp, some operators chose to withdraw from the U.K. market. In the unexpected camp, some operators are restructuring player loyalty programs to account for the new tax. Full Tilt Poker announced a 20% reduction in the rate at which rewards points are given to players, citing the new point of consumption tax as the prime reason for the change. PokerStars announced that it would slash rewards for high-volume, high-stakes players in 2016, though it cited concerns about the poker ecosystem rather than changes in tax policy. UNITED KINGDOM & EUROPE