1. UNITED KINGDOM
Tax rate1 15%
2016 Market size2 €5,983m
2016-21 CAGR3 8.0%
Tax rate 35%
2016 Market size €300m
2016-21 CAGR 8.1%
Tax rate 2% S turnover 40% C P B
2016 Market size €256m
2016-21 CAGR 3.6%
Tax rate 1% S 23% VAT C P B
2016 Market size €973m
2016-21 CAGR 0.6%
EUROPEAN AND US REGULATED AND
REGULATING MARKETS TAX LANDSCAPE
GVC Holdings PLC Annual Report 2016
US (New Jersey)
Total interactive (excluding lottery)
gross gaming revenue (€m)
The regulatory landscape is changing at a rapid pace, particularly across
Continental Europe. Whilst we welcome sustainable legislation, the national
regulatory regimes across the EU Member States differ significantly due to
the lack of harmonised gaming rules at an EU level. Within the EU, we work with
the industry and those committed to upholding the open market values of being part
of the union.
In 2016, approximately 69% of our pro forma NGR was derived from territories where
we currently pay gaming taxes/VAT or where a licensing structure is in the process
of being implemented. The Group is currently licensed in more than 18 territories.
In Germany, bwin was among the 20 successful applicants for a sports betting
licence in 2014. However, this process was subsequently suspended after being
challenged by operators who failed to secure licences and licences were never
granted. Nevertheless, all 35 operators (including bwin) that fulfilled the minimum
criteria in the licensing procedure will receive temporary sports betting licences
on 1 January 2018. Further, the Second Amended State Treaty on Gambling is
scheduled to enter into force on 1 January 2018. With the exception of the state
of Schleswig-Holstein, licences for online casino/poker are still not available in
Germany. However, it was announced in November 2016 that the German federal
states agreed to evaluate a legal framework for the regulation of online casino and
poker. This evaluation will most likely be concluded in the autumn of 2017. In this
context, the state of Hesse has an extraordinary termination right to the German
State Treaty on Gambling which is linked to the satisfactory solution of the online
casino and poker situation until 30 June 2019. The Group pays betting tax/VAT on
all of its German revenues.
In 2016, the Group received a permanent licence in Romania having previously
operated under an interim licence. A licence application has also been made in the
Czech Republic following new legislation that came into force on 1 January 2017.
The Group will consider applying for a licence in Poland in light of amendments to
their gaming legislation.
In August 2017, the UK government will commence levying the point of consumption
tax on gross gaming revenue on all online gaming products (previously just betting)
as opposed to net gaming revenue. If this had been in place at the start of 2016 the
estimated incremental tax payable by the Group would have been approximately
€7m. Also in the UK, the CMA (Competition and Markets Authority) is undertaking
a review into the advertising of gaming and operators terms and conditions,
particularly in the area of promotions to customers.
Beyond the impact of currency movements there has been no visible impact on the
business from the UK's decision to seek an exit from the EU. The Group has greater
sterling costs than revenues and therefore the impact from the recent sterling
weakness is a net positive. The detail of how the UK intends to exit the EU is yet to
be decided, however, management believe GVC's global footprint gives it significant
flexibility to face any challenges that may arise.
1. % of GGR unless otherwise stated.
2. H2GC estimates for sports, casino, poker and bingo GGR, January 2017.
3. H2GC estimates, January 2017.
4. A licensing regime for online sports betting has been proposed in all 16
states but no licences have yet been issued. Taxes on sports betting are
at 5% of turnover on all German revenues. Taxes on poker and casino are
being paid at 20% of GGR on revenues generated by Schleswig-Holstein
residents and 19% VAT on all other German gaming revenues.
5. Draft legislation.