Surprisingly, Britain’s online wagering, gaming and gambling industry looks to be booming right now, despite the introduction of new government regulations throughout autumn and winter 2014. It looks as though the turnover in the industry is actually increasing, as it looks set to easily surpass £3 billion over the next two years.
This estimated projection comes from the release of current figures which show that net gaming revenue has increased substantially in the past year, having gained 12.2% to reach a massive £2.31 billion. To support this, the Gambling Compliance Research arm GCRS also expects growth with projected gambling revenue increases of 11.4% in 2014, a further 10% in 2015 with another leap of 13.6% in 2016 pushing it over the £3 billion revenue mark. In terms of figures, it works out that revenue would grow from the current £2.31 billion to £2.58 billion by the end of 2014, increasing to £2.83 billion then £3.22 billion in 2015 and 2016 respectively.
Whilst the much talked about Point of Consumption Tax due to be implemented from 1st December is expected to be bad for online gaming, it could actually prove to be a more lucrative move. The tax itself requires remote gambling operators based offshore or outside of the UK plus land-based betting businesses like high street betting shops (but not casinos or bingo halls) to pay tax based on consumption by UK players, rather than where their main operations are based.
As this causes many offshore online and casino gambling operators to be liable to pay a tax they previously have not had to, there are fears that many of these offshore operators will pull out of the UK. While it may be true that this will stifle competition or choice for consumers in the UK, it could actually prove a boost in UK revenues. This is because any flight by offshore operators will leave UK based operators with more customers to fight over. As the UK online gambling space is already seen as crowded, the introduction of Point of Consumption Tax will not only slow the saturation of the market, but also mean that more revenues are brought within the UK as players from withdrawing markets are likely to find a home with a UK based operator.
In addition to this, the main priority of the Point of Consumption Tax is to create Treasury revenues, and as the tax is set at 15% the Treasury stands to benefit substantially. It’s predicted that the tax increase will raise up to £400 million extra in the Treasury pot. The idea is that such a boost for the Treasury will fuel growth in the UK both for government and private operators.
Another more imminent increase in revenues is set to come from a huge spike in activity ahead of the implementation of the tax. It’s thought that more revenue will be generated for all operators before the tax is implemented.
Aside from the Point of Consumption Tax affecting the revenue boost, the sheer popularity of sports betting and gambling in the UK is the main driving force behind the booming revenues. The effective transformation from land-based to online has worked largely in the favour of most of the big operators, with William Hill retaining the title of lead online operator in the UK in 2013 and Bet 365 following closely behind after experiencing a huge growth in market share of almost 10%. Britain’s love for betting certainly is booming!
New Topic: Betfair remains in New Jersey despite Trump Plaza Closure. More info. Click here!