Inside Asian Gaming

inside asian gaming November 2014 44 In Britain, the Tax Man Cometh The UK High Court has dismissed an attempt by online operators based in Gibraltar to quash legislation passed in Parliament earlier this year to tax and license offshore operators taking bets in the country. The Gambling (Licensing and Advertising) Act 2014 reverses a trend over the last decade that has seen nearly every major UK- based bookmaker and Web gambling operator relocate to offshore tax havens such as Malta, the Caribbean and Gibraltar, a British overseas territory, by requiring all UK-facing operators to obtain licensing from the UK Gambling Commission, wherever they place their servers, and pay the same 15% tax on their British revenue as operators in Britain. The Gibraltar Betting and Gaming Association, a trade group representing operators there, sued to block the law, calling it a violation of EU free-trade guarantees and decrying it as “unlawful, illegitimate, disproportionate and discriminatory”. The association insisted that “the UK regulator will find it difficult to hold companies to account in jurisdictions outside of the EU where it has no legal powers and common legal framework or culture.” But High Court Judge Nicholas Green said, “Parliament was clearly within its rights to act as it did.” The Gambling Commission responded, “Now we can get on with improving the protection for those gambling in Britain.” The commission said it had received license applications from 161 companies through September. Others wishing to apply had until 23rd October to file under an extended deadline prompted by the GBGA suit. The tax, which comes into force on 1st December, could add upwards of £300 million (US$480 million) to the Exchequer, according to industry estimates. Caesars Tops in Social Gaming New research forecasts online social casino games will amass US$2.7 billion in revenue this year, and Caesars Interactive controls the largest share of it. The Web gambling branch of US land-based casino giant Caesars Entertainment is credited with 21% of the market in the third quarter, according to Eilers Research, a gaming analytics and consulting firm headquartered in Southern California. Second place is held by IGT’s DoubleDown Casino with 11%. Zynga is third with 9%. Caesars Interactive is reported to have passed Zynga back in 2013 for the top spot in the sector, which operates legally in the US by offering wager-free gambling on Facebook and other platforms in exchange for in-game add-on purchases and fees for extra play credits. Caesars also markets legal real-money games in Atlantic City and Nevada, led by its World Series of Poker platform, but social gaming drives 95% of its revenue growth, according to socialcasinointelligence.com , and dwarfs the take from its real-money applications. In the social space, Zynga’s poker platform is reported to be more popular than WSOP, and VentureBeat says Caesars’ overall lead is due mainly to the popularity of its Slotomania brand, which has about double the users as WSOP on Facebook. Other leaders in the third quarter, according to Eilers: Big Fish Games, with an estimated 8% of the market; GSN + Bash Gaming with 7%; Williams Interactive with 5%; and Playstudios, High 5 Games, Double U Games and Aristocrat’s Product Madness with 2% each. Tinian Revokes Three Casino Licenses Tinian regulators have pulled the gaming licenses of two Korean developers and one from Taiwan for failing to follow through on resort projects on the western Pacific island. “The lack of progress in these conditional and plenary licenses has failed to bring about the economic development that has been much needed on the island,” the Tinian Casino Gaming Control Commission said in a statement announcing the revocations. The companies are: Marianas Resort Development —a Korean-owned group not to be confused with Marianas Stars, a company affiliated with the island’s only operating casino—which was licensed back in 2006 for a US$309 million, 400-room complex called Matua Bay Resort not far from the island’s airport. Neo Gold Wings Paradise Saipan , also out of Korea, licensed in 2008 for a $200 million project that was slated to include a 1,000- room hotel with a casino, water park and golf course. HW Gold Island Holding , a subsidiary of Taiwan construction giant Howarm. HW has proposed a number of resort-related investments on Tinian and was licensed in 2012 in connection with a failed bid to buy the Tinian Dynasty Hotel & Casino, the island’s sole operating casino. Tinian Dynasty was purchased last year by Marianas Stars parent Mega Stars Overseas, a Hong Kong group with Macau junket ties. Mega Stars has invested around $50 million to date in expanding and improving the resort in conjunction with Marianas Stars’ failed bid for a new gaming license authorized earlier this year by neighboring Saipan, which has never hosted a casino. The government of Saipan awarded the license to a company called Best Sunshine International, a subsidiary of Hong Kong-listed Imperial Pacific Holdings, whose portfolio also includes Macau junket investments. Saipan and Tinian are the largest islands of the self-governing US Commonwealth of the Northern Marianas. The Tinian commission said it will look to put one or more of the three licenses out for bid “within six months, if not sooner”. One of them is expected to be awarded to a Macau group with ties to HW Gold Holdings. Alter City Group Holdings, as the INTERNATIONAL BRIEFS Caesars Interactive’s lead in the social gaming space is due mainly to the popularity of its Slotomania brand.