Category Archive: UK
The Government has confirmed it will go ahead and bring the remote gaming duty treatment of freeplays in line with the less generous treatment of free bets under general betting duty. This will take effect for accounting periods commencing on or after 1 August 2017 as previously announced. We expect to see the responses to HMRC’s consultation on freeplays and the draft legislation on 5th December 2016.
Use and enjoyment VAT charge for advertising services
There is still no news on whether the UK is going ahead to impose VAT, under an extension to the effective use and enjoyment rule, on B2B advertising and marketing (including affiliate marketing) services which are supplied to non-EU established businesses. The UK had announced it was intending to do this, once it had imposed VAT on insurance repair services carried out in the UK, which has been done. With Brexit preparations ongoing, the extension of the use and enjoyment rule to advertising services may now be on the back-burner.
Avoidance Disclosure Regime to include gambling duties
In a bid to strengthen the tax avoidance disclosure regimes for indirect taxes, the government intends to extend the scope of the VAT Avoidance Disclosure Regime to cover all indirect taxes, including gambling duties. Provisions will also be made to move the primary obligation to disclose avoidance schemes from users to promoters. These changes will have effect from 1 September 2017.
For further information please contact Richard Woolich, UK Head of Tax.
Following the conclusion of the industry consulation, the Gambling Commisson has confirmed the new licence condition wording on placing digital adverts responsibly, as follows;
a) ensure that they do not place digital advertisements on websites providing unauthorised access to copyrighted content.
b) take all reasonable steps to ensure that third parties with whom they contract for the provision of any aspect of their business related to the licensed activities do not place digital advertisements on websites providing unauthorised access to copyrighted content.
c) ensure that the terms upon which they contract with such third parties enable them, subject to compliance with any dispute resolution provisions, to terminate the third party’s contract promptly if, in the Licensee’s reasonable opinion, the third party has been responsible for placing digital advertisements for the licensed activities on such websites.
The Commission’s response to the consultation can be read in full here.
Free plays – as a future tax change, from Finance Act 2017, the use of free plays will be included for remote gaming duty, but the award of a free play as a prize will not reduce the profit. Changes will be made to the definition of gaming payments and prizes. Operators will need to compare and contrast the various types of incentives, bonuses and rewards they give their players and VIPs in good time to make any appropriate adjustment to their Ts and Cs.
Replacement of Horseracing Betting Levy – as recently announced, the Levy will be replaced from April 2017 with a new funding arrangement, which will be payable by both land-based and online operators wherever they are based. The amount payable will reflect the degree of mutual interest between betting and racing, similar to the approach adopted in the French parafiscal levy. The rate has not yet been decided.
Gaming Duty Bands – as normal the gaming duty bands for casino operators have been increased in line with inflation for accounting periods commencing 1st April 2016.
Use and enjoyment VAT charge – there is no further news on whether and how the UK will be imposing VAT on use and enjoyment of advertising services in the UK by an operator based outside the EU.
The Gambling Commission has announced that regulations governing online peer to peer poker are being reviewed.
In the first stage of the review the Gambling Commission is seeking information from its licensees about collusion and cheating – including the use of automated poker robots and third party software.
The Gambling Commission has published its latest consultation on its proposed changes to provisions in the Licence conditions and codes of practice (LCCP) which link to the prevention of crime associated with gambling.
The consultation comes in the context of the implementation of the 4th Anti Money Laundering Directive, and includes proposed revisions to the LCCP and the Commission’s anti-money laundering guidance.
The Department for Culture, Media and Sport (“DCMS”) has published its response to the conclusions and recommendations of the Culture, Media and Sport Committee’s (“the Committee’s”) report on Society Lotteries.
The Government clearly intends to take steps to overhaul the way society lotteries operate and to also address the concerns raised by the Gambling Commission around the interplay between lotteries and other gambling products and the way they are collectively marketed and operated.
Further consultations are promised and the issues identified are now back with the Commission to take forward with clear support from the Government.
The Government’s statement can be read here.
The Advertising Standards Authority’s latest advice draws upon recent adjudications to offer useful advice about how to ensure gambling ads fall the right side of the line of Britain’s advertising standards.
Read the ASA’s advice here.
GB: Gambling Commission acts to reduce the confusion caused by “betting-on-lotteries” products and “lottery-style games”
Following the Government’s consulation on lotteries earlier in the year, the Gambling Commission has published guidance seeking to address the confusion that, research would suggest, arises in the minds of the general public when faced with a “lottery-style” game or a betting product where punters wager on the outcome of actual lotteries.
The guidance largely deals with the way such games are presented and marketed, but there is also a clear threat from the Commission that, if they dont see a noticeable improvement, then they will address the issue of confusion through the imposition of licensing conditions.
See the Commission’s guidance here.
The Gambling Commission has published industry statistics for the period 1 April 2010 to 30 September 2014.
The report can be read here.
In a recent adjudication, the Advertising Standards Authority (“ASA”) has issued a timely reminder of the need to place sufficient prominence to significant terms of a promotion in marketing messages. The adjudication comes in the midst of operators being asked by the Gambling Commission to demonstrate compliance with their marketing obligations under the Licence Conditions and Codes of Practice (“LCCP”).
The ASA concluded that the advert in question, which appeared on a full page of the operator’s website, had not stated significant limitations and qualifications of the ‘free bet’ offer. The LCCP require operators to ensure that significant conditions are made clear in the adverts themselves or, if the advert is significantly limited in space (e.g. banner ads), that significant terms are prominently displayed no further than “one-click” away.
Importantly, the ASA determined that, as the advert appeared as a full page on the operator’s own website, the advert was not significantly limited by space, and determined that the material terms of the offer should have been stated in the advert itself, rather than being one-click away. The advert was therefore misleading and breached the CAP Code.
It comes as a reminder to operators of their compliance obligations in the marketing of promotions, an area which has maintained a high level of public interest and regulatory scrutiny.
You can read the ASA’s adjudication here.
The Gambling Commission has “written to a number of website operators offering prizes of money or money’s worth to gamblers in Britain that are not licensed by” the Commission to alert/remind them that any operator offering gambling services to British citizens using bitcoin as the basis of depositing and paying out requires an operating licence or they are acting illegally.
It is unlikely to surprise the recipients of such correspondence that they may be committing an offence. When bitcoin first emerged, online casinos that used bitcoin as the only payment method also emerged and claimed they were outside the scope of gambling regulation. Anyone with even a basic understanding of gambling law saw through such claims. It should be well-understood by now that even though bitcoin is not fiat currency, it nevertheless has “value” and wagering with it will be considered as gambling.
The Gambling Commission has announced that Sarah Harrison will join the Gambling Commission on 7 September and will become a Commissioner when she takes over from Jenny Williams as Chief Executive on 1 October 2015.
She is currently a Senior Partner at Ofgem where she leads the Sustainable Development Division.
The Gambling Commission has published analysis of trends in gambling behaviour for 2008-2014.
The report’s main findings are:
- a “significant increase in remote gambling participation, in gambling participation amongst those from the AB (1) social grade and female participation in activities other than the National Lottery.
- a decrease in participation in National Lottery draws, virtual gaming machines in bookmakers (FOBTs) and fruit/slot machines.
- that frequency of gambling and average number of activities participated in has remained relatively stable since 2008.
The report can be read here.
By Jack Randles and John Wilks
The UK’s Committee of Advertising Practice (“CAP”) has introduced changes to the provisions of its advertising code which deal with the running of sales promotions, including prize promotions. The full regulatory statement explaining and setting out the changes is here. The amendments to Chapter 8 of the CAP Code came into force on 1 May 2015. The main aim of the changes was to increase consistency with European legislation.