2015 marked the beginning of the implementation of the European Union's Value-Added Tax (VAT) on electronic services, a move which is set to cost Mas8 lottery online Malaysia operators tens of millions of Euros on a annual basis.
In the past, VAT laws supported Mas8 lottery online casino and gaming operators to only be subject to VAT payments as dictated by the laws enacted by the country in which their services were provided from. This also permitted online gambling operations to strategically run from countries that did not release VAT regulations, or those which waived the requirement, permitting them to avoid huge tax payments.
This year nevertheless has witnessed a shift in the way online gambling services will be operated as EU laws now mandate that VAT laws on electronic services are applied at the point of consumption, rather than from the country of supply. Some European countries will however continue to exempt online gambling or some forms thereof from VAT, whereas others require the payments.
It is foreseen that these changes will have varying impact on online gambling operators depending on the region of their player bases as well as whether these countries are a VAT-free area or not. For instance, UK based and facing gaming operators will not be subject to raise taxes on their activities as the UK offers exemption for online gaming products. That said nevertheless, UK operators have already been subject to tax raise due to the implementation of the new Gambling (Licensing and Advertising) Bill that has instituted a 15 percent point of consumption tax on Mas8 & M8win online betting sites operations.
Other EU countries such as France, Germany and Ireland will all apply unique VAT rules, depend on the type of gambling in question and whether or not it is known as skill-based or not.
According to tax attorney David Thompson, the new VAT laws will have a disruptive impact on organizations based in countries where there is either no VAT regulation or where full VAT exemption is used to gaming products. Thompson further added that VAT is charged to the net value of income from Irish and German players, and those with large customer bases in these countries will face diminishing margins due to raising VAT bills.
Currently in Germany, VAT is applied to online poker and casino games but sports betting is exempt but subject to a standard 5 percent turnover tax.
It is reported that some of the larger gaming operations like Bwin.Party Digital Entertainment will be issued with a seven figure annual tax bill in Germany alone because approximately 26% of its player revenue is from German players and the VAT rate on that will be a huge 19% unless the country takes steps to adjust its VAT laws to exclude online Mas8 lottery services. The company will also be hit with a huge VAT bill in France.
What this could all mean for you as a Player
Whereas online gambling operations will be requested to foot the newly imposed VAT bills, it is not all that far-fetched to anticipate that the new VAT regulations could potentially have a negative influence on players.
Already some poker rooms raise their rake and decrease their promotional activities and offerings. If things end up becoming too tight, in an effort to curb influences on their bottom lines, other poker rooms and Mas8 casino may follow suit.
There is also potential that the industry as a whole may see a fall in competition as companies remove their services to countries which impose VAT regulations. We have already seen certain casinos like Spin Palace and Ruby Fortune withdrawing their services from the UK in favor of promoting only a single property (in this case Betway Online Casino).
While bigger groups will find a way to combine the new cost structure into their existing operations, smaller independent operators can not compete in an already strained marketplace.
The repercussions of this may translate into fewer services in particular countries as well as decreased overall liquidity amongst online casino, which is never good for players. Also the potential for new comers into these market, which will mean less options for player, less competition and perhaps less in the way of competitive offerings.