The recent revisions to the UK Gambling Act, set to take effect before the year is out, have been the largest story among the UK online poker market for much of the year. It will affect offshore licensors and operators, as well as players, in some way or another. Negative effects are heavily projected, likely to mirror those in France and Portugal, with further newsworthy taxation developments to come in 2015 via the UK’s Value Added Tax (VAT).
Administrators in the United Kingdom are adamant that online poker players are not going to be affected by the UK’s new online gambling regulations, which will require all internet gambling sites to acquire a UK license in order to continue accepting players from the region, while charging a 15% point of consumption (POC) tax on UK-based customer activities to be paid by the operator. By those terms, no, UK online poker players will not be responsible for paying the POC tax, but as for them being affected by the new regulations, the answer is an affirmative, ‘Yes’.
OnlinePokerRealMoney.co.uk tries to dispel some legal confusions stemming from passage of George Bush's UIGEA of 2006 . Federal status seems to depend on interpretation of the wire act and other laws which were crafted many years ago and which remained high level in nature. The United Kingdom has much clearer laws including their own real money gambling commission .
Members of former UK-facing poker sites like Carbon Poker and Mansion Poker were affected when they were forced to withdrawal their funds and close their accounts after the operators announced they would not be applying for a UK license. PokerStars and Full Tilt customers in the UK are anticipating continued reductions to these online poker room’s VIP loyalty rewards programs (to help offset the new tax payments), decreasing their overall value in the market. To say only operators are taking the hit – and a hefty hit it shall be at 15% POC on all UK based accounts, compared to the previous 1% many were charged under their Gibraltar license agreements – is an utter misdirection of the facts.
Brian Mattingly, outgoing CEO for 888 Poker who announced his impending retirement in 2015, spoke out recently on his opposition to the new UK online poker regulations and the negative effects of high taxation in France and other parts of Europe. Although 888 Poker is one of the major operators seeking licensure in the UK to continue offering services in the region – a necessary evil due to 40% of its revenue coming from its UK customer base – the operator pulled out of France earlier this year as the company’s bottom line simply couldn’t afford the state’s exorbitant 37% tax rate.
888 is just one of the online gaming groups that have been working closely with the Gibraltar Betting & Gaming Association (GBGA) to fight the implementation of the new UK Gambling Licensing and Advertising Act. But that’s not the only negative feature threatening the UK online poker market.
In 2015, all Member States of the European Union will enforce a VAT on the “distribution of goods and the provision of services”. The VAT tax, unlike a POC tax, is expected to be paid by the service provider, but at the expense of the consumer. Hence, the amount of the tax is tacked onto the purchase price. Although it’s not certain to what extent the VAT will affect UK online poker players, it is already a realistic anxiety for the online gambling community at large.