Licensing, Taxes and Online Casinos

[nikantw]

What we have now, is every country doing whatever she wants, whenever she wants. Total chaos IMHO.

Don’t you think there must be one global gambling commission, one common set of rules, one common taxation?

Tax based on place of consumption? Are they going to make Apple pay taxes for every iphone sold in the UK? Coca Cola for every bottle? Microsoft for every software? Mercedes for every car?

Aren’t you tired of being treated like sick addicts, that need “help” in the form of lower RTP, more taxes and monopolization of the market?

What are your thoughts?

 

[Googobucs]

Globalization is far too complex a discussion for this forum, but i think it's safe to say that every county and even regions within those countries have different rules and taxes for the items you mentioned like coke and iphones. You can extend that to every other consumer good on the planet.
If i move just 5 miles the tax I pay for my cell phone and coke is different.

You're never going to get everyone to agree on even the simplest of concepts so IMO it's best left to each Country and region to determine the laws and rules that best meet it's needs.

 

[nikantw]

Globalization is far too complex a discussion for this forum, but i think it's safe to say that every county and even regions within those countries have different rules and taxes for the items you mentioned like coke and iphones. You can extend that to every other consumer good on the planet.
If i move just 5 miles the tax I pay for my cell phone and coke is different.

You're never going to get everyone to agree on even the simplest of concepts so IMO it's best left to each Country and region to determine the laws and rules that best meet it's needs.

But It is not about that kind of tax (on product price). It is a tax on companys revenew paid by the company (a totaly different thing). No other company pays that tax on any other country other than their own.

Another example, is the tax on players winnings. Sure, it is fair, but only on the net winnings, only if they reduct all you have lost!

 

[petro]

Aren’t you tired of being treated like sick addicts, that need “help” in the form of lower RTP, more taxes and monopolization of the market?

This might not be exactly related to what you are talking about but...
I used to be the kind of person that thought: why should I suffer because of stupid people. But when I thought about it I realised that it's right to take one for the team in order to reduce harm.
You know, you can talk about things like; responsible gun owners losing their rights, decent people being held up at the airport by security and scanned, etc.

IMO it's best left to each Country and region to determine the laws and rules that best meet it's needs.

The Greek philosophers say that murder is murder regardless of what country it's committed in. From this I would say that what is wrong in one country is wrong in another.
To my mind the differences in laws from place to place is some evidence showing society/the world is not very well refined. If it were, the laws would all be the same.
Maybe you could go even further and say that if we were highly civilised, we wouldn't even need laws.

 

[Googobucs]

But It is not about that kind of tax (on product price). It is a tax on companys revenew paid by the company (a totaly different thing). No other company pays that tax on any other country other than their own.

Another example, is the tax on players winnings. Sure, it is fair, but only on the net winnings, only if they reduct all you have lost!

Tax is tax. Corporate tax varies from community to community as well. That is why big companies choose to build their headquarters in certain places. They get tax incentives to do so.

As far as taxing winnings that is a whole different topic and I am 100% opposed to being taxed on winnings. They already took a % of my wager as a tax when I placed the bet so to tax winnings is taxing me twice.

Maybe you could go even further and say that if we were highly civilised, we wouldn't even need laws.

The key word here is “if”.
I don’t have the time or energy to debate philosophy with anyone. I'll just leave it at: I don't agree nor disagree, but that is just my opinion. One opinion in Billions.

 

[Balthazar]

But when I thought about it I realised that it's right to take one for the team

It's not right unless it's done on a voluntary basis. Fuck social engineering where they want to turn humans into ants or bees where one's life doesn't mean anything as long as the colony/hive survives. That's NOT how we evolved and that's NOT how we became a successful species.

 

[petro]

It's not right unless it's done on a voluntary basis.

Well, I would be the first to put my hand up to volunteer...
Or at least, I hope I would be brave enough.

 

[vinylweatherman]

But It is not about that kind of tax (on product price). It is a tax on companys revenew paid by the company (a totaly different thing). No other company pays that tax on any other country other than their own.

Another example, is the tax on players winnings. Sure, it is fair, but only on the net winnings, only if they reduct all you have lost!

The problem is that big companies "game the system" by being based on some tiny island state, yet doing 99% of it's business elsewhere. This means they escape their fair share of tax on profits, making others pay more. This in turn drives the others to try the same trick, and we end up with what we have today, a system where despite the headline higher tax rate for the rich, it's the poor that may far more tax overall because they can't afford to "play the game" invented by the rich.

Companies need to pay tax because they do NOT pay all of the costs of doing business. Take McDonalds for example, they do not clean up the rubbish that is produced by customers who leave the premises with a take-away. This is a job for the council, and in order to do this job, they need money, and this comes from taxes. If McDonalds creates a "game" that allows them to avoid paying tax, it just means that more tax is taken from those unable to join in the "game".

Online casinos tend to get a licence where the taxes are lowest, not where most of their customers are. The low taxes also seem to be related to poor standards of regulation, which leaves players poorly protected. These small states are also too small to stand up to such an industry, as the threat to jump ship and get regulated elsewhere is enough for them to get their own way when the regulators propose something they don't like. A bigger country would be taking tax revenue from a large number of companies in various sectors, and if an online casino operator told the UKGC that they would move offshore if they didn't get their way, the UKGC would say words to the effect "Don't let the door hit you on the arse on your way out".

 

[nikantw]

The problem is that big companies "game the system" by being based on some tiny island state, yet doing 99% of it's business elsewhere. This means they escape their fair share of tax on profits, making others pay more. This in turn drives the others to try the same trick, and we end up with what we have today, a system where despite the headline higher tax rate for the rich, it's the poor that may far more tax overall because they can't afford to "play the game" invented by the rich.

True, but this is not the solution and even if it was it doesn’t solve anything if applied only on online gaming.

Companies need to pay tax because they do NOT pay all of the costs of doing business. Take McDonalds for example, they do not clean up the rubbish that is produced by customers who leave the premises with a take-away. This is a job for the council, and in order to do this job, they need money, and this comes from taxes. If McDonalds creates a "game" that allows them to avoid paying tax, it just means that more tax is taken from those unable to join in the "game".

Also true. But where does this tax come from? They increase prices, lower the quality of products and services and lay off people, or even close causing more unemployment. Ask the countries with 30% unemployment how helpful the tax increase was.

Online casinos tend to get a licence where the taxes are lowest, not where most of their customers are.

Everybody does. Google gains most of its global profits from Ireland! Oil companies in EU buy their oil from Panama!

The low taxes also seem to be related to poor standards of regulation, which leaves players poorly protected.

I know the poorest regulation standards, and they come with 30% tax on gross revenue for the companies. And where is 32Red based? The only thing higher tax guarantees is lower RTP. And lower RTP = less fun. What is a game without fun? Nothing!

These small states are also too small to stand up to such an industry, as the threat to jump ship and get regulated elsewhere is enough for them to get their own way when the regulators propose something they don't like. A bigger country would be taking tax revenue from a large number of companies in various sectors, and if an online casino operator told the UKGC that they would move offshore if they didn't get their way, the UKGC would say words to the effect "Don't let the door hit you on the arse on your way out".

Yet again, super high tax is not the answer on online gaming because it means lower RTP. Especially taxes on gross revenue that attack directly the RTP instead of the company’s profits.

I believe in a small tax on the profits on the online casino, and forcing all offshore companies have a local subsidiary company that will pay taxes and local gambling commission can regulate.

Rich people like expensive things, don’t they? Let’s put more taxes on the expensive things, and leave the simple things everybody else wants as tax free as possible.

 

[vinylweatherman]

The rich people will not pay the tax, they will buy offshore and import the item themselves. Many even MOVE HOUSE to thwart attempts by governments to tax them, and because they are rich, they can build themselves a luxury villa in parts of the world where ordinary people live in wooden shacks with no services or sanitation.

The only way to get rid of the need for tax is to get rid of the state, and have everybody look after themselves. This will just lead to the powerful taking control and oppressing the less powerful.

Another solution is to have international tax agreements that prevent the rich and big companies avoiding tax by moving their domicile or legal offices.

The CURRENT solution is a point of consumption tax, rather than point of provision. It isn't only online gambling that is being targeted, the idea is being looked at as a more general weapon against offshore companies making their profits here, but having them taxed elsewhere at the lowest rate they can negotiate (or bully) out of another state.

If governments can't make it work, they will end up soaking the poor and middle classes with higher rates of income based taxation, knowing that these people are not rich enough to create the kind of artificial dodges that the rich use.

If the poor COULD "play the game" just as well as the rich, we would probably see more action from governments aimed at closing down the various dodges.

Regulation should prevent companies from unfairly passing on costs that their shareholders should be paying on to their customers.

 

[nikantw]

The CURRENT solution is a point of consumption tax, rather than point of provision.

Not fair for an offshore online casino to pay a tax that no other offshore company has to pay.

 

[vinylweatherman]

Not fair for an offshore online casino to pay a tax that no other offshore company has to pay.

It's not, ALL companies should be paying it. If ALL companies were made to pay it, the tax rate itself could be lower, yet raise even more revenue. It's not over yet in any case, the GRA have challenged this in the high court, and if they use this angle in their argument, they might just manage to chuck a spanner in the works that will delay the implementation for the foreseeable future whilst the government come up with a fairer and more EU compliant system. The challenge has already delayed the implementation for a month.

 

[petro]

...and because they are rich, they can build themselves a luxury villa in parts of the world where ordinary people live in wooden shacks with no services or sanitation.

That doesn't sound right. Let's say it's the third world; the rich have too many reasons not to live in those countries as they don't have access to the goods and services they desire.

You wouldn't see someone like Bill Gates moving to Somalia for example.
7th of October 2014: Somalia's first-ever cash withdrawal machine has been installed in the capital, Mogadishu.

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[vinylweatherman]

That doesn't sound right. Let's say it's the third world; the rich have too many reasons not to live in those countries as they don't have access to the goods and services they desire.

You wouldn't see someone like Bill Gates moving to Somalia for example.
7th of October 2014: Somalia's first-ever cash withdrawal machine has been installed in the capital, Mogadishu.

You do not have permission to view link Log in or register now.

Look at Manila, or even Rio. These are cities where the super rich live alongside the chronic poverty. If you are in the rich part, you have everything you could possibly want. Somalia may be an extreme choice now, but even the poorest country has it's capital city and seat of government, and this is where all the trappings of wealth will first show up.

Most of the super rich tend to go for small island states, or small tax havens like Monaco.

 

[Balthazar]

That doesn't sound right. Let's say it's the third world; the rich have too many reasons not to live in those countries as they don't have access to the goods and services they desire.

You wouldn't see someone like Bill Gates moving to Somalia for example.
7th of October 2014: Somalia's first-ever cash withdrawal machine has been installed in the capital, Mogadishu.

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There are many people that are very rich in piss poor 3rd world countries. Somalia is a very extreme example as there's no real authority over there and it's arguably the biggest shithole on Earth; rich people flew because there was no government left to protect them.

As a matter of fact I just employed a foreign student coming from Burkina Faso last week. Tuition fees for foreign students are almost 50k a year and this guy had never worked a single day in his life prior to last week. He drives a new Lexus that costs about twice the price of my car. Burkina Faso isn't exactly rich and he's not alone, there are thousands of students coming here from very poor African countries every single year. So yeah, wealthy people in 3rd world countries definitely exist.