It comes as no surprise that the UK is one of the best destinations for gambling in the world. The country is not only home to the biggest gambling companies, but it is also reputed for its strict gambling laws. As a result, this area has the largest market regarding gambling in Europe, with approximately 14.4 billion British pounds of Gross Gambling Yield (GGY). With the fierce competition standing out, the operators have been using no deposit bonuses to reward their customers.
This bonus scheme has been standard in online casinos as it provides an opportunity to the players to increase their chance of winning. Nonetheless, since the tax authority, Her Majesty’s Revenue and Customs (HMRC), implemented new regulations to remote gambling operators, No deposit bonuses have shown a significant decline.
The New Tax Regulations
According to the Finance Bill of 2017, free plays or free bets are subjected to taxation according to the General Betting Duty. In these new regulations, the operators must pay a 15% general duty on all free or discounted online bets. The definition of “prizes” to deter operators from assimilating the value of free plays with prizes offered in the goal to reduce taxable profit has also been modified by the HMRC. The target of the regulatory tax amendment is to require remote casino operators to pay duty for their gaming over the internet, radio, television, telephone, and other electronic media.
As stated by John Thompson, the HMRC chief executive, the new regulation aims to bring the tax treatment of free plays for remote gaming following the treatment of free bets under General Betting Duty (GBD). He also added that the costing included a behavioural impact to clarify a change in the marketing strategy of affected operators and the potential for companies that found ways to alleviate the measure’s effects. The regulation came into force on August 1, 2017. It is worth mentioning that the poker operators are not subject to this taxation.
The Importance of No Deposit Bonuses
No deposit offers are the crucial entities at the online casino as these bonuses are great opportunities for the players to play in their favourite games without depositing. The best online gambling operators always care for their customers by offering various bonus programmes. The No deposit rewards are the most attractive, pushing people to register and make deposits at the casinos. Using these free spins on registration without a GamStop requirement, the customers will have fun for free, and why not some prizes.
They can access the popular games free of charge. Apart from the bingo websites and other platforms, the online casinos have applied the No deposit offers to seduce more and more customers. With this extra cash without spending any amount, the gamblers feel as necessary to the gambling sites and have become more confident to bet on their preferred games.
The decline in the No deposit casino bonus will undoubtedly impact the players and the online casino’s revenue. The UK Parliament worried that this tax legislation would burden the gambling operators leading to their collapse.
The New Tax Code Affects the Operators
The new tax regulation has impacted the gambling operators since they are obliged to reduce the marketing and promotional strategies. Some companies have adopted increased promotion expenditures. A significant drop in the performance of casinos is predicted as the higher gambling tax rates can lead to a decline in customers.
Additionally, with the tax factor, online casinos are expected to decline the volume of profits. These new regulations required by the British Commission may discourage gambling operators from offering their services to UK customers. Some of the major companies have already lost interest in operating in this area and chose to enter more profitable markets in other countries. The communications director at William Hill, Ciaran O’Brien reported that the gaming operator has to look for ways to mitigate the tax on free plays.
The company stated that the tax regulation changes could reduce bonuses for online operators that offer casino games and bingo. Some of the leading companies like PaddyPower, Fantasino, and Casilando have to review their bonuses policies by eliminating or reducing their No deposit offers and other promotional packages.