10.20.2008 | 4:07 am | Taxes
There are sure signs that the US stance towards online gambling is softening as the recession in the US continues to grip every area of society. Income from traditional casinos is down, unemployment numbers are on the rise and it seems that we have yet to hit the bottom of the economic cycle. But how will a lifting of the online ban assist with increasing tax income for the US authorities?
As well as the speculation regarding the lifting of the online ban there are signs that a deal is being organised behind the scenes whereby companies will pay some for of fee or tax to operate their online betting companies in the US. As this was the largest market in the world before the ban was imposed it would still be a very lucrative move for many of the major sites which did once operate in that market. So what next?
As we near the Presidential Election the chances are that all major policy decisions will be put on hold until the dust has settled. While each candidate has mentioned the online betting ban in passing it seems as though John McCain may be the best bet for the online gamblers, but his chances of winning the election seem to be diminishing with each and every new day. So will Obama do the business for the online betting community?
There is some debate as to whether Obama will be as aggressive in his pursuit to lift the ban as McCain might have been but the signs are still there that the ban will be lifted in due course. US state by state income is suffering from the falling input of traditional casino taxes so they will need to look for an alternative as soon as possible. Would an online gambling tax be the answer to the local state tax shortfall?
07.11.2008 | 11:18 am | Taxes, casinos
If you check around the world you will see that there are thousands of casino venues which are bringing in literally billions of dollars a year for respective governments and corporations. However, while the likes of football has FIFA and UEFA to regulate and control the worldwide football market there is no recognised gambling regulator and everything seems to be done at a more local level. Why is this?
As we touched on above the casino industry brings in massive amounts of money and no country seems willing to give up local control of casinos on their patch. In the public eye the casino industry is often criticised by people in power, by governments and by local authorities but behind the scenes the casino industry is fast becoming one of the main contributors to local and government authorities. We have the weird scenario of people willing to accept money, and substantial amounts of it, from the casino industry while still being critical in public – often highly critical.
The truth is that gambling and more specifically the casino industry has always been around in some form or another. The authorities know that if they were even to consider banning casinos then the industry would just go underground. So rather that push the sector away from the outside world they very much prefer to try and regulate the industry on a local level and claim massive taxes for the pleasure.
In many states in the US the authorities are taking more money that the casino owners themselves take out of the business and as budgets become ever tighter there have been moves to increase this income stream. This is the one reason why there will never be a worldwide casino regulator and casinos will still be criticised in public, but contribute more than most behind the scenes.
06.12.2008 | 10:58 am | Taxes, News, casinos
Over the last couple of years we have seen some major changes in the traditional casino sector with gaming tax rising from 2.5% to 15%, the smoking ban and the stop start casino strategy of the current Labour Government. However, the online sector has remained relatively unscathed, apart from the obvious loss of US business, but is the sector next in line for tax hits?
The ongoing WSOP event has demonstrated how powerful a sport Poker real is as well as the worldwide appeal which seems to be growing. The online industry has not only brought Poker to the masses but it has actually created an appetite for attending more traditional offline casino venues. However there is a growing feeling that the online sector will be the next to be hit by an array of eye catching taxes, such as those forced on the offline casino companies. While many of the casino operators will argue that their online rivals should compete on a ‘level playing field’ it will be interesting to see how the government reacts over the coming months ahead.
Many of leading online companies have already, or they are in the process of, agreed various backdated tax settlements with the US authorities. It is hoped that by removing this hurdle, the online companies may soon be able to take their place in the US casino market. But so far we have not seen any similar type of action by the UK authorities or the EU – is it on the way?
As the supply of money continues to tighten in Europe and across the world we are seeing budgets come under pressure and governments intent on squeezing every last penny out of the business sector. A direct tax on online casinos operating in the UK might be difficult to administer, but it has the potential to bring in millions to prop up an ailing UK budget deficit.
03.3.2008 | 7:09 am | Taxes, Poker, casinos
While it has taken a while, the tax authorities are finally taking a looking at the casino industry and the winnings which many players take home. The plan for a national register of wins over $5,000 has long been in the background but it is now coming into play. Casinos will now be obliged to report wins of over $5,000 to the tax man and hand a tax form to the “lucky†winner. So what does this mean?
Even though there has been much controversy over this new regulation, the original plan had been to withhold 25% of the winnings for the tax authorities, ensuring that they got their slice no matter what happened. However, when you consider the various tax allowances and the ability to offset loses against gains it would have been very unfair to withhold 25% of the total win, as it many not have actually been due to the tax authorities.
On the flip side it has to be said that many people have been taking big poker and casino wins and not reporting these in their tax returns. While tax laws vary across the United States and the world, there has been an enormous amount of potential “tax avoidance†using the poker industry over the years. The net affect of these new regulations is likely to be very positive for the tax intake of the local states and federal government with substantial amounts likely to be received as and when the system settles down.
It will be interesting to see which other sports and industries the authorities decide to target next in the pursuit of higher and higher tax payments across the board. Surely there are other ways in which people are avoiding tax other than casino wins and poker?
12.28.2007 | 8:46 pm | Taxes
There are few industries in the world which can prompt such differing views and opinions than the casino industry. On the one hand you have the people who want to play and support freedom of choice, but on the other hand you have those who say they are dangerous and can cause major problems for the players and the surrounding areas (for offline casinos). However, over the last few years we have also seen a new player enter the arena, the politician (or the tax man!).
More and more we are seeing examples of politicians caught between a rock and a hard place when confronted with applications to build new casinos. The need to balance the needs and opinions of all in the areas affected have seen a number of agreements which mean that taxes from local casino operations are “ear marked†for local needs. But is this the right way to attract casino operations?
When it comes down to the bottom line, the various local authorities in any country in the world could always do with extra taxes to bolster services, etc. There are few industries in the world which can offer such high tax income - and on a surprisingly regular basis when you consider the laws of probability associated with the industry. The truth is that while there may be short term blips, the income from casino profits is often fairly regular when taken over an appropriate timescale. But is it right to offset the authorisation of casinos with the funds raised for local regeneration?
When you get down to it, if a local authority were to reject an application for a casino the operators would only go to the next state, town, city, etc and apply there. So the trend towards ear marking casino taxation for local regeneration is probably not a bad policy, although you will never please all of the people all of the time!
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