According to the famous old Benjamin Franklin quote, there are two things in life that are unavoidable – death and taxes.
As to the first of the proposition, I am not able to comment on the immortality of executives in charge of many of the leading online gaming companies; but I can say that the inevitable moment when the industry faces up to the prospect of paying tax is well and truly upon us.
The latest country to put into the spotlight the online gaming industry’s ability to reside in whichever low-tax jurisdiction gives it the best terms is the UK. Although coming in the opposite direction to many of its European cousins – effectively attempting to close the door on an otherwise wide-open regulatory regime rather than opening up a previous closed shop – the intentions are similar. To regulate and tax an industry which hitherto had been more comfortable outside the orbit of national regulation.
Though there are whispers in some quarters that the actions of the UK government in putting forward a point of consumption tax might be challengeable in court, it is our firm belief that having the certainty of being regulated in recognised and respected jurisdictions is worth the price of admittance that an online tax represents.
Italy has shown that a nationally regulated and taxed regime can work very well for the companies involved. Even if the French version of the same idea is rather less attractive, it still works for some (notably OpenBet customer Paddy Power who work with us on providing PMU’s online sportsbook).
Denmark has more recently followed the Italian path with a regime that has been almost universally applauded by the industry, and Spain and Greece will hopefully both follow suit this year. Even Germany might soon be opened up, either through the Schleswig Holstein window, or through a national regime.
Yes, any tax obviously cuts into profit margins. But as evidenced by Italy and elsewhere, a regulated market can lead to a secular online gaming boom. This is exactly what many in the industry have been lobbying for - the quid pro quo of higher taxes in exchange for more sustainable, regular and eventually profitable income. OpenBet believes that we as an industry should accept the certainty of tax, but acknowledge that it does more often than not come with some benefits.
