Your Input Please UK Bonuses reduced??

[dunover]

OK, I had this from one affiliate manager today, don't know if this is endemic or just their view?

We have been informed today by EveryMatrix of new regulations regarding the Remote Gaming Duty calculation in the UK market. Despite the fact that this new Finance Bill was passed on November 16th 2017, we were informed of these changes until today, due to not having official guidelines yet.

These changes affect directly the Bonus Costs in the Duty calculation. Previously the Remote Gaming Duty calculation was: 15% * GGY = GGR real money + GGR bonus money - Bonus Costs + Jackpot changes.

However, starting October 1st 2017 (retroactive), the new Duty must be calculated as: 15% * GGY = GGR real money + GGR bonus money + Jackpot changes. Bonus Costs are no longer deductible.

These new taxes will force us to change back our Welcome Bonus to a 100% up to 50 GBP in the first deposit (only in the UK market), in order to reduce operational costs resulting from bonuses.

We will make this change effective until Thursday 25th, in order for everyone with UK sites to have enough time to change it back.

We apologize for these unexpected news, but they all came as a big surprise to us.

First I heard of this?

 

[SpinUk]

I well believe it - UK government poking their nose in and the UKGC sniffing out more revenue and doing nothing to protect customers before patting themselves on the back about what a good job they are doing.

 

[TradaCasino]

This is true, bonuses are now taxable in the UK unfortunately.

This means UK players will most likely be seeing a quite significant reduction in bonus value across the board.

As an example (from my understanding), if I give a UK player who signs up through an affiliate a 200% bonus on a £50 deposit, and the player loses, the following costs would now apply:

15% tax on deposit: £7.5
15% tax on bonus: £15
10% share to game providers on total 'losses': £15
25% share of deposit to affiliate: £12.50

That brings you to a cost to the casino of £50 for a player to lose £50, resulting in a profit margin of 0%. So it's lose-lose.

We haven't taken any decision yet on bonuses for UK players yet, we'll see how it goes for a while. Overall though, it's bad news for both operators and players.

Rachel.

 

[dunover]

Trouble is it will feed the big bookies who can afford to pay huge CPA costs and then subsidize bonuses. Anti-competitive.

 

[colinsunderland]

This is true, bonuses are now taxable in the UK unfortunately.

This means UK players will most likely be seeing a quite significant reduction in bonus value across the board.

As an example (from my understanding), if I give a UK player who signs up through an affiliate a 200% bonus on a £50 deposit, and the player loses, the following costs would now apply:

15% tax on deposit: £7.5
15% tax on bonus: £15
10% share to game providers on total 'losses': £15
25% share of deposit to affiliate: £12.50

That brings you to a cost to the casino of £50 for a player to lose £50, resulting in a profit margin of 0%. So it's lose-lose.

We haven't taken any decision yet on bonuses for UK players yet, we'll see how it goes for a while. Overall though, it's bad news for both operators and players.

Rachel.

Do you not calculate your net rev as net after costs? So the affiliate share in your example above would be 25% of £12.50 not 25% of £50?

Surely the value of getting a new FTD is worth the first deposit profit being £0.00 though as you will still benefit from the ongoing revenue in future?

 

[dunover]

CPA deals already pay the affiliate in many cases far more than the casino is guaranteed to earn from the player. Major affiliate groups get eye-watering amounts for NDP's, in the hundreds.

 

[colinsunderland]

CPA deals already pay the affiliate in many cases far more than the casino is guaranteed to earn from the player. Major affiliate groups get eye-watering amounts for NDP's, in the hundreds.

I used to get £150 for skyvegas so must be eye watering what the likes of catena get!

 

[SpinUk]

Do you not calculate your net rev as net after costs? So the affiliate share in your example above would be 25% of £12.50 not 25% of £50?

Surely the value of getting a new FTD is worth the first deposit profit being £0.00 though as you will still benefit from the ongoing revenue in future?

Not if they win with the £50 which a significant proportion will. So if they lose the casino loses and they if they win the casino obviously loses.

Not have good time of it on costs are the casinos, what with the ban on credit card charges the other day. Agreed is bad for everyone apart for the UK treasury.

Ive said it before, but I dont understand why the industry don’t collectively challenge such rulings - I mean in this case its a clear business expense which should be tax deductable. The UK government just merrily swipes away over 100 years of standard accounting practice and you guys let them with not a peep. This is thin end of the wedge stuff...

 

[orion]

maybe a different point of view ?

From my experience, if the casinos are reducing the BONUSES in such a situation, its bad news but not terrible.
Believe me, it would be much worst if they'd reduce RTPs (and keeping the bonuses).

Bonus is something the player can "control" (accept / refuse, basing on EV+/- and such)
RTP (or TRTP) is something the player can't control.

 

[dunover]

I used to get £150 for skyvegas so must be eye watering what the likes of catena get!

Peanuts. Trust me. I'd be retired young if to date I'd received these amounts for every NDP I'd ever collected.

 

[colinsunderland]

Not if they win with the £50 which a significant proportion will. So if they lose the casino loses and they if they win the casino obviously loses.

Not have good time of it on costs are the casinos, what with the ban on credit card charges the other day. Agreed is bad for everyone apart for the UK treasury.

Ive said it before, but I dont understand why the industry don’t collectively challenge such rulings - I mean in this case its a clear business expense which should be tax deductable. The UK government just merrily swipes away over 100 years of standard accounting practice and you guys let them with not a peep. This is thin end of the wedge stuff...

Not sure I agree a significant proportion will win, bonuses are designed to lose

Talking about the card charges, I notice Rizk etc are still charging this.

 

[slot_zombie]

Well it can't get much more dead on reloads than it already is. I have about 30 casino accounts and I'm going to close most of them because I never get anything worthwhile. I'll just stick to VS in 2018 and get a little cashback.

 

[dunover]

Well at lest EveryMatrix were honest - Cherry Affiliates simply aren't going to bother with the UK market and Mr. Win have been a little more devious and disguised the higher cost of UK bonuses as "market research leads us to believe free spins are preferred....blag...blag...bullshit.." We as players KNOW we would prefer bonuses to play on any slot not shitty St*rb*rst free games FFS!!!!

 

[goatwack]

I like how they have a new 'campaing' every day, based on that guy with the clipboard surveying the local shopping centre, I mean 'market research'

 

[brianmon]

Well at lest EveryMatrix were honest - Cherry Affiliates simply aren't going to bother with the UK market and Mr. Win have been a little more devious and disguised the higher cost of UK bonuses as "market research leads us to believe free spins are preferred....blag...blag...bullshit.." We as players KNOW we would prefer bonuses to play on any slot not shitty St*rb*rst free games FFS!!!!

View attachment 87079

And no doubt their 'market research' also showed that customers not only prefer free spins. but they also prefer less value than a straight 100% bonus would give them

£10 deposit - 30 free spins = £3/£6 (depending which game you chose) equivalent to 30% / 60% bonus
£30 deposit - 50 free spins = £5/£10 (depending which game you chose) equivalent to 16% / 33% bonus
£100 deposit - 300 free spins = £30/£60 (depending which game you chose) equivalent to 30% / 60% bonus
£200 deposit - 600 free spins = £60/£120 (depending which game you chose) equivalent to 30% / 60% bonus
£300 deposit - 999 free spins = £99/£198 (depending which game you chose) equivalent to 33% / 66% bonus

The £30 option is pretty shit

 

[Jono777]

Found out the hard way (but knew it was coming) after a life time Caddell ban, bonus players such as myself are pretty much fucked!!!

 

[goatwack]

Ahh who cares really, bonuses are dead and who can beat one nowadays anyway. It's not like it was even three or four years ago with good bonuses aplenty. It's all pants now, good riddance to 'em

 

[The Viking]

you got that right i hardly ever get match bonus offers anymore but
my indbox is full with deposit this or that for free spins, but truth is i couldnt care less
i much prefer match bonuses then free spins.
also some casinos have a cap on free spins like casino luck and there sister casinos
so if any operators read this give me match bonuses i deposit, give me free spins i move on

Ahh who cares really, bonuses are dead and who can beat one nowadays anyway. It's not like it was even three or four years ago with good bonuses aplenty. It's all pants now, good riddance to 'em

 

[dunover]

you got that right i hardly ever get match bonus offers anymore but
my indbox is full with deposit this or that for free spins, but truth is i couldnt care less
i much prefer match bonuses then free spins.
also some casinos have a cap on free spins like casino luck and there sister casinos
so if any operators read this give me match bonuses i deposit, give me free spins i move on

You'll run out of places to move on to I'm afraid. I forgot to mention that Calzone, Caribic and several other MT Secure or EM sites have also changed their bonuses from 40xB to 25xD+B thus effectively raising wagering by a quarter. That suggests they'll still be good for UK bonuses but are balancing it with reducing the chances of cashing them out. The communications never directly referred to the UK bonus tax (like with the MrWin example above), but it seems a coincidence.....

Then again what can the casinos do? They are torn between wanting to offer you incentives you like, and having to make a profit too and this UK guff has seriously squeezed margins as Rachel demonstrated.

I would personally hope that the various UKGC licensees would get together, hire a business/taxation lawyer and challenge this diktat as like someone said earlier, it's a discriminatory and summary removal of marketing tax-deductible expenses which are allowed in other areas of commerce.