More than a year ago, the free spins Bonus tax was levied for UK online Casinos. This is a tax that has to be paid in order to offer customers bonuses without a deposit. As the costs for the operators are hardly reported, I would like to briefly introduce the System. The UK government also wants to increase taxes on Online gambling providers in general.
On 1. On August 11, 2017 there was significant change in the Gambling Act of Great Britain. At that time, additional taxes for the Casinos came into force. No deposit welcome bonuses, free spins and equivalent promotions must be taxed by the gambling operators. At that time, the No Deposit promotions were provided with the same Remote Gaming Duty (Online gambling tax) as all other wagers. Operators have been required to pay for some years 15% on the gross Player day (winnings of the casino from gambling, payouts of the players already included). The no Deposit bonuses wagers must also be included here since August 2017.
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Ultimately, Casino bonus offers are the most efficient incentives to advertise new players or to stimulate the gaming behavior of regular customers. The bonus offers of individual gaming groups are increasingly being reviewed by the UK regulatory authority and must be partially removed if they do not comply with their requirements.
In the UK, the “Free Play Tax” has caused uncertainty among many gambling providers, as the calculation was not quite clear and is partial. The providers are concerned about the increased tax payments in the UK. I will try to briefly outline the problems below.
When is the British Freeplay-tax?
The British government has decided to tax “FreePlay”. This relates to free spins as an introductory offer, and the corresponding deposits. The operators only pay taxes for the corresponding Bonus when they are used for the first time. It is important that only the deposit and bonus amount is included in the calculation of taxes. No account is taken of any turnover at the Slots required to comply with the bonus conditions.
In the case of free spins, the original stake will be taxed on the assumed Freespins. If the player has a win through the actions, the winnings can be deducted from the taxable amount. The losses of the player and must be taxed, however, normal.
How am I charged taxes for free plays?
In order to calculate the taxes, you just have to calculate the actual bets by the entire bonus promotion and from this value the paid winnings of the players by free spins are deducted. Of the resulting amount, Online Casinos must pay 15% tax. All in all, nothing unusual, however, the taxation of bonuses (ie the gambling money) has been new.
Suppose a player pays £ 50 and receives as a deposit Bonus. He uses the 50 pounds to Play and at the end of 30 pounds. Then he uses the free games, where he may have got 10 Spins on 1 pound bet. There he can secure the player perhaps 30 pounds, which must then be implemented. At the end of the day, he may still have a win by the free spins of 15 pounds, which he can really get paid out. Then the following calculation would result:
- Money paid and used: 50 pounds
- Bonus: 10 pounds through free spins
- Payout after playing: 30 pounds
- Free spins win: 15 pounds
- Gross gaming revenues (stakes minus winnings payable): £ 15
Of this gross player contribution, a casino would have to pay 15% tax, which would mean £ 2.25. If the player would leave the Casino with a profit, the Casino would not have to pay any taxes on it.
Tax increases are in the planning stage
In the UK, there is bad news for the Internet gambling sector. The government has now officially announced that it will take the first steps to bring about an end to the war. In the event of a dispute between the parties, the parties agree to the terms and conditions of the agreement, which shall be governed by the laws of the state of California. The revenue from the gambling tax for 2018 had not met the expectations of the government, therefore, the levy has been adjusted now.
It could have a relatively large impact on the UK market. New providers could be discouraged, small businesses will also be burdened, so they may have to fight for survival. Currently, it is assumed that the tax providers that have specialized in Live Casinos or Videopoker meets the hardest.
Overall, it is probably the 6. Change of taxation of Online gambling in the last 4 years. Overall, most industry experts are reassured that it was not 25% of the gross player earnings, as feared in part.
Use limitation on FOBTs will not occur until October 2019
One must see the tax increase in connection with a reduction in sales at the Fixed odds betting terminals (FOBTs). These are special slot machines that are available in UK betting offices. The stakes should be limited to you. This may result in tax losses estimated at more than £ 450 million (£514 million) per year. With the tax increase, in the next five years 1.2 billion pounds (1.37 billion euros) are to be taken, as the industry grows as fast as before.
While it is currently possible to place 100 pounds (about 114 euros) at the slot machines in the betting office per game round, it should only be 2 pounds (2.3 euros) per round. Against the rule, many gambling providers are up in arms. It was originally planned to tighten the rule for April 2019, but now it was postponed to October 2019, as the minister of Finance Philip Hammond announced. They wanted to give the bookmakers time to change, so that the resulting job losses can be avoided as far as possible.
The British minister for Sport, Digital, Culture and media was Tracey Crouch until recently. She resigned from her post after the decision. This is due to Protest, as the delay according to their estimates about 1.6 billion pounds (1.83 billion euros) more revenues are generated by FOBTs.
Tax revenues should be balanced
In the end, the British government is trying to balance tax revenues. Since the FOBTs limit eliminates a good source of income, the Online Casinos now have to be taxed more. Especially in the field of bonuses, the calculations seem to have become more complicated. Experts have sometimes found that many managers in the industry do not fully understand the requirements, especially as the complicated calculation makes it more difficult to plan actual tax costs. Many UK-licensed online Casinos therefore do away with the full range of bonus promotions that players will notice in the long run.