BREAKING: New Study Confirms that Gaming Tax Rate Higher than 20% is Counterproductive

 

A new study, of which GiH received an exclusive preview and which was published only moments ago, finds that in case of a gaming tax rate of 20%, a player channelling degree of 80% is on the upper limit of the expected range. Higher tax rates might result in a slower and eventually lower degree of channelling.

The study was conducted by Ecorys, one of Europe’s oldest economic research and consulting companies, which is perhaps best known for the work of its former director, Nobel Prize winner Jan Tinbergen.

According to the study, a high tax rate makes it difficult for legal operators to survive in a market in which both legal and illegal operators are active: “[…] operators in Spain (tax rate of 25%) and France (tax rate of >30%) are confronted with a sector wide negative operating result. In France, only one third of the (legal) remote gambling operators still exists after five years.” As a result, the illegal supply of (remote) gaming has actually increased in France since regulation in 2010.

Ecorys thus recommends a maximum initial tax rate of 20%. Only after the legal (regulated) market has proven to be sufficiently attractive, would there exist some potential to increase the tax rate in the future. “In that way, the likelihood of achieving the channelling objective of 80% in three years (and the underlying policy objectives) will increase,” the study concludes.

 

Dutch Court: “Current Betting License Not Awarded Transparently”

The District Court in The Hague recently ruled that the current, single license for organizing horse racing bets in the Netherlands had not been awarded in a sufficiently transparent manner.

Other operators, the Court found, should also have been given the opportunity to bid for the single license, which is valid for the years 2015-16.

Instead, the Netherlands Gaming Authority, following the government’s wishes, simply opted to renew the existing license held by Sportech Racing B.V. for another two years.

In its verdict, the Court ordered the Netherlands Gaming Authority to reconsider its initial refusal of the license application of a second (nameless) operator.

Additionally, it is likely that the Court’s finding will have major implications for other license holders as well, as all current Dutch lottery licenses, for instance, were renewed in a similar, non-transparent and wholly non-competitive manner.

 

Federal German States Oppose New Interstate Gambling Treaty

A majority of the sixteen federal German states have rejected the proposals by the state of Hesse to make a fresh start and design a wholly new interstate gambling treaty from the ground up.

As a result, only minimal changes (“minimalinvasive Eingriffe”) to the existing treaty will be considered in order to avert looming infringement proceedings by the European Commission for non-compliant gambling laws. Concretely, this means that the number of sports betting licenses will be doubled to forty, but other online betting options, such as casino and poker games, may still not be legally offered.

Not surprisingly, the Deutscher Lotto- und Totoblock (DLTB) is applauding the preservation of the status quo and current concession model: “This is a clear rejection of further liberalization of the German sports betting market and thus a clear commitment to far-reaching player protection,” Lotto Hamburg director Torsten Meinberg said.

 

Gaming in Holland Conference: Call for Speakers

Do you have fresh insights you would like to share with industry insiders, regulators, or other gaming professionals at the upcoming Gaming in Holland Conference? We still have room for speakers, for instance on the topics of:

  • the regulated remote market;
  • the lottery market in 2017, and beyond;
  • new product types: fantasy sports, eSports, or binary options/CFD’s.

Interested? Please send us a brief outline describing your topic and its relevance to Willem van Oort.

 

eSports Certain to Be Relevant to Online Gaming Sector

Operator Bwin, in any case, already agrees with that statement.

Wouter Sleijffers, CEO of professional video gaming team Fnatic, will have more to say on this topic at the upcoming Gaming in Holland Conference.

 

Are Gaming Companies Ready for the Upcoming EU Privacy Regulation?

“Gaming companies might need to speed up in order to get ready for the upcoming EU privacy regulation, its new obligations and massive fines,” gaming lawyer Giuilio Coraggio writes.

Although the new regulation will come into force in two years at the earliest, this might still be considered a narrow time frame. “If gaming operators or suppliers want to exploit the full potential of wearable technologies, analytics, big data, etc., […] a privacy impact assessment might be necessary, which might require more than a year of work,” Coraggio adds.

 

Swiss Casinos Blame Falling Revenue on Online Competition

Spurred by falling revenues, the Swiss Casino Association is now calling on the Swiss authorities to block access to illegal foreign online games and to allow casinos to offer sporting betting services and lottery products.

 

Other News

Suriname might finally get a reliable gaming board.

 

William Hill warns that player time-outs and automatic self-exclusions may reduce its online division’s profits by £20-25m in 2016.

 

The UK is now planning to tax all free and discounted online bets.

 

888’s earnings are hit hard by taxes, but its top line is growing.

 

LeoVegas commences trading on Nasdaq Stockholm.

 

Betconstruct entered into new content supply deals with Pariplay and Evolution Gaming.

 

Fantasy operators FanDuel and DraftKings suspend their real-money operations in the state of New York.

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