Wednesday, July 18, 2012

Pokerfuse Responds to UK Treasury Online Gaming Consultation ...

Participating in the lawmaking process for online gambling, pokerfuse chimed in from an online poker player?s perspective.

Pokerfuse chimes in on the UK online gambling lawmaking process with a player's perspective

Pokerfuse submitted a response to the UK Treasury?s consultation paper ?Taxing remote gambling on a place of consumption basis: consultation on policy design.?

Consultations on policy are a regular feature of online poker regulation proposals but respondents are usually industry figures and pressure groups. Prior to the submission deadline at the end of June, pokerfuse decided to provide comment from the online poker players? perspective.

The main proposals concerned changing the UK taxation system so that all online poker and gambling providers would be taxed on their revenues from UK players no matter where the companies were regulated.

The Treasury proposed a 15% tax on Gross Profits ? for poker this would mean a 15% tax on total rake minus incentive payments to players such as cash bonuses. Other UK lawmakers are pursuing a similar path.

The scope of the consultation meant that not all issues that concern online poker could be raised. Pokerfuse was able to ask for specific consideration to be given to poker players in nine specific areas of the report. The conclusions to pokerfuse?s arguments were written as requests for the Treasury to consider specific proposals.

The full response and arguments for each point can be read at the bottom of this article. The nine points pokerfuse made were:

Pokerfuse asks that the Act be amended to require licensed gaming operators to hold player funds in a Trust which will ensure that players do not lose the money that have deposited if the company gets into financial difficulty and that the opportunity for companies to misuse funds for operational expenditures is strictly limited.

Pokefuse asks that the level of duty payable and the method for calculating duty payable reflect the status of poker as a professional game of skill and reflect the additional sensitivity of playing costs on the predominance of skill over luck which characterises the game.

Pokerfuse asks that following our argument in response to Question 2 and this question, consideration should be given to setting the rate of duty independently for poker. The rate that would maximise gaming duty from poker is lower than 15%.

Pokerfuse asks that consideration be given to charging the tax on net profits due to customers in the UK. By net profits we mean the definition according to UK GAAP or IAS.

Pokerfuse asks that any proposals to adopt a tax based on the amount of money wagered rather than on the fee paid by players to the site for offering the service should be rejected on the basis that it would create a barrier to future innovation.

Pokerfuse asks that the calculation of the duty owed on poker games should take account of the net money paid by players for the service offered. That is that the Gross Profit calculation should be:

a. Total rake paid minus all cash paid into player accounts in the form of bonuses, VIP benefits or rakeback.

b. We believe that due consideration should be given to also subtracting some or all of the sites player acquisition costs especially marketing affiliate payments, UK advertising and sponsorships.

Pokerfuse asks that consideration be given to treating poker differently to other remote gaming activities because players are more responsive to relative prices.

Pokerfuse asks that the level of duty be set at a rate which maximises tax income while minimising the migration of players to sites outside the regulatory jurisdiction.

Source: http://pokerfuse.com/news/law-and-regulation/pokerfuse-responds-uk-treasury-online-gaming-consultation/

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