Inside Asian Gaming

March 2010 | INSIDE ASIAN GAMING 43 Casinò di Venezia 27.5%. Gambling companies must also pay a regional tax of between 2.98% and 4.82% depending on the region in which they are established. 3. Outdated licensing systemwith low tax rates Ireland’s licensing system is far behind that of other EU Member States in simply not providing a regulatory framework for remote gambling or gaming operations. In addressing this issue, it is currently unclear whether Ireland will pursue an approach similar to that of the UK, which adopts the concept of mutual recognition of EU gambling operators, or whether it will follow the growing trend of jurisdictions such as France and Italy and impose a local licensing system and restrict access for operators without a domestic licence. Direct tax rates in Ireland remain low, being levied at 12.5% on Irish trading income. Betting tax is currently levied at the rate of 1% of turnover. Despite relatively reasonable tax rates, however, the major Irish-facing online and telephone operators, such as Paddy Power and Boylesports, have established their remoteoperationsoffshore. It is understood that the decision of the Irish Government to defer the proposed increase in the rate of betting tax to 2% of turnover was partially driven by a desire to tempt such businesses back to Ireland. Author: Stephen Hignett, Partner and Natalie Coope, Associate, Olswang Olswang is a full service European law firm specialising in the gambling, media and technology sectors. Stephen and Natalie both provide UK tax advice for clients in a wide range of industries including the gambling and media sectors. stephen.hignett@olswang.com natalie.coope@olswang.com Comparison table of tax regimes in typical jurisdictions for UK-facing gambling operators Alderney Gibraltar Isle of Man Malta UK No duty Category 1 licence (for gambling operators with contractual relationship with customers): annual fee of £35,000 - £140,000 depending on“net gaming yield“ (includes gambling) Category 2 licence (for operators of a gambling platform): fixed annual fee of £35,000 Duty on 1% of turnover (fixed-odds betting and pool bets) Duty on 1% of“gaming yield”being bets taken minus prices offered (internet casino gaming) All duty subject to minimum of £85,000 and maximum of £425,000 Annual licence fee up to £2,000 Duty upon 1.5% of gross gaming yield for online casino games, poker and sports betting (rate reducing as yield increases) Duty upon 15% of gross gaming yield for online pool betting Initial licence application fee of £1,000 Annual licence fee of £35,000 for a full online gambling licence Duty / licence fee depends upon class of licence Licence fee up to €7,000 per month Duty on 0.5% of gross amount of fixed-odds bets accepted Gaming duty of €1,200 per month Duty / licence fee depends upon class of licence Licence fee up to €7,000 per month Duty on 0.5% of gross amount of fixed-odds bets accepted Gaming duty of €1,200 per month 0% 10% for new companies 0% 35% but usually 5% or less due to tax refunds 21% to 28% No No 17.5% 18% (but may be mitigated) 17.5% Asia Pacific Gaming (online gaming bingo, poker and casino), Boylesports (online casino and gaming excluding any poker-style games), Gala (online bingo, casino and games), Sportingbet (online sports book) Ladbrokes, William Hill, Party Gaming (in each case, online fixed-odds betting and online casino), Victor Chandler (sports betting, casino, poker and games), Stan James (sports betting, casino, poker and gaming), 888 (casino and gaming), 32Red (casino, bingo and fixed odds betting). Paddy Power (online sports betting and Dial-A-Bet), BetOnMarkets (online gambling), BetInternet (online sports betting, casino and gaming), betChronicle (online sports betting). Totebet (pool betting commingled into US horse racing and greyhound racing pools) Betfair (fixed odds betting, casino, gaming and poker), Unibet (online sports betting), Bet 24 (some online betting and online gaming) Betfair (betting exchange), Coral (online fixed odds), Bet 365 (online fixed odds), Jaxx (online sports book and casino) 20% (after personal allowances) 30% (rates range from 0% to 40% by reference to income and basis of taxation) 18% (after personal allowances and 10% rate band) 35% (after nil, 15% and 25% rate bands) 40% (after personal allowances and 20% rate band; 50% rate from 6 April 2010) Duty/Licensing Regime Corporate Income Tax Rates VAT Main Operators Personal Income Tax Rates NOTE: The figures in this table are illustrative, based on our understanding of the local law in each jurisdiction, and in no circumstances should be relied upon. Regulation