BB108-p01-news:09/10
4/9/13
12:38
Page 1
Fair betting: British bookmakers prepare to head to Wolverhampton to see the latest LBO innovations. ESSENTIAL GUIDE 18
Football signing: Betfred teams up with BT Sport in order to offer televised Premier League matches to customers B2BiRETAIL 28
Social club: Can the betting industry leverage social media in the same way as casino and bingo operators? COMMENT 38
£5.20 (€8.30) • ISSUE:108 • SEPTEMBER 2013 • www.betting-business.co.uk
15 per cent tax rate could be ‘serious mistake’
Hills gets bigger down under AUSTRALIA ACTION IMAGES / CARL RECINE
The UK place of consumption tax is due for implementation on 1 December 2014, but the industry will hope to get the 15 per cent rate reduced before then. TAX
he UK government is pressing ahead with its intention to impose a 15 per cent gross profits tax on all remote operators for any business they conduct in the country, much to the industry’s dismay. Despite warnings that such a high rate will create a much bigger black market for online gaming from UK customers that currently exists, the Treasury is persisting with it in an attempt to recoup a further £300m a year from the industry. Clive Hawkswood, CEO at the Remote Gambling Association, commented: “This is a challenging time for the industry and we will continue to engage with Treasury to ensure the impact of any tax changes is fully understood by the government. We have KPMG working on a report that will be completed shortly and hopefully that will help to persuade the government that it would be a serious mistake to set the tax rate at too high a level.” Indeed there appears to be an assumption that the Treasury’s figures are based on capturing only
T
ONLY LOCALLY LICENSED FIRMS WILL BE ABLE TO ADVERTISE IN THE UK
80 per cent of the market, with the remainder using non-licensed companies who will not pay the UK’s consumption tax. Given that the current licensing regime, while not directly regulated by the Gambling Commission, encompasses 99 per cent of the market there is a very real possibility that the new licensing laws will actually make online gambling less safe for UK citizens. Economic Secretary to the Treasury Sajid Javid said: “These reforms will ensure that remote gambling operators who have UK customers make a fair contribution to the public finances.” The news was revealed as part of the Treasury’s consultation on its proposed place of consumption
www.microgaming.co.uk/TDKR
tax for remote gambling. A positive for the industry is that the government has taken the sensible approach and decided that for the purposes of remote gambling the definition of UK customers will be based on where the customer usually lives. It explained: “This will mean remote gambling undertaken by a customer who usually lives in the UK whilst temporarily on holiday abroad will be liable for tax (as long as that gambling could have been accessed from the UK). Conversely, remote gambling undertaken by a customer who usually lives abroad whilst temporarily in the UK will not be. Premises based gambling will be unaffected.” There were also details over how
the Treasury intends to enforce the tax rate, which mainly involves working with other tax jurisdictions to recover outstanding tax debts under the EU Mutual Assistance in the Recovery of Debt (MARD) directive, requiring operators from certain jurisdictions to appoint a joint and severally liable fiscal representative and/or provide HMRC with a security. Several of these points will be enforced through the creation of summary criminal offences. The offence of fraudulent evasion of the duties for remote gaming duty carries an unlimited fine and imprisonment of up to seven years. LICENCE TO KILL COMMENT 38
illiam Hill has increased its share of the Australian market with the acquisition of local online betting brand Tom Waterhouse for AUS$34m (£19.6m), along with $6m (£3.5m) of liabilities. The deal also sees an additional earn-out of up to $70m (£40.4m), subject to tomwaterhouse.com achieving incremental EBIT on a sliding scale between $10m and $30m (£5.8m and £17.3m) in the year to 31 December 2015. It is only six months since William Hill paid £459m for Sportingbet’s Australian business, as the bookmaker aims to make the sector a second home market. Tomwaterhouse.com will join the Sportingbet and Centrebet brands, which are led by Michael Sullivan as CEO of William Hill Australia; however Tom Waterhouse will remain managing director at the brand that carries his name. Sullivan commented: “This is bringing together some of the best talent in the bookmaking industry into one formidable team. That can only be good for the customer experience. Add to that our commitment to the Australian market and the best practice standards we apply to our business and you get a company that is also focused on protecting and respecting the customer.” Australia is one of the largest licensed betting markets in the world and is attractive to William Hill for its long-term growth potential as a wellestablished and well-regulated market. William Hill has particular skills in those areas of the Australian market that are demonstrating strong structural growth: online, mobile, fixed odds betting and sports betting. William Hill expects the acquisition to be positive from 2014, enhancing underlying earnings before transaction and integration costs and the amortisation of intangible assets associated with the proposed acquisition in that year.
W