Back in the Autumn Statement of 2016, we first found out that a free play tax was to be imposed on bonus funds. This was due to come into play in August of this year but it has been postponed for now. In this article, we’ll be looking at what this free play tax could mean for players when it comes in.
In the initial bill, the Chancellor George Osborne stated that a 15% tax would apply to free bets given out by operators. This would mean that they would be forced to pay taxes on bonus funds and other theoretical funds. The 15% figure comes from the Point Of Consumption Tax that already exists on other money that is used within this industry. This would have the operators paying the tax on what they earn from a player and also the amount that they give out in bonus funds, a typical example of bonus funds being awarded would be £20 free on a spend of £10, this is the welcome offer at Rocket Bingo, one of the largest bingo sites. Most other bingo brands offer a comparable deal.
Right now, this tax is in a state of uncertainty, as the political landscape is always changing. If it is to come in next year, then this may affect our experiences as players. Operators will not be keen on paying charges on bonus funds so they may attempt to find ways to get around it.
One drastic change that we may see is the reduction of bonuses as a whole. This could affect the number of deposit and redeposit bonuses that we get from a site. This would potentially change the amount of bonuses that you get from a site but also how frequently you get them too.
In terms of no deposit bonuses, we may see these disappear altogether. This would be because with deposit bonuses, a site would still be generating the income from your deposit. With a no deposit bonus, this investment isn’t forthcoming from the player so they would be losing money on each one that they pay out.
There are other ways to get value for money from a site however, not just with bonus funds. One thing that we may see more sites moving towards are free spins and loyalty points. These are slightly harder to quantify and thus add a tax to, which may make them more cost effective for sites to give out.
The exact details of how this tax will work has not been specified as of yet. We’re not entirely sure of which bonuses will be affected or how non-monetary bonus funds will be taxed. There will most likely be operators that attempt to find other ways to reward their players, which may be even better for players.
Within the industry, taxes are seen as a necessary evil to allow the sector to thrive. These go towards funding the regulation and enforcement for the industry, so it is required for the industry to exist. The funding from this taxation also helps to promote responsible gambling messages and support those with gambling addictions.
While bonus funds have managed to escape some taxation thus far, this seems set to change. The next update on the bonuses will most likely come in the next budget statement in August but the actual implementation likely will not take place until next year. Until then, bonuses will remain the same but sites may start to reduce their bonuses in preparation to give their players time to acclimatise.
Super savvy shoppers will still be able to find deals and perks after the tax is brought in, no doubt. This may mean that we have to spend more time delving into the promotions of a site before signing up or reading a lot of reviews. We’re sure the industry as a whole will still be offering value for money, no matter what taxes are brought in.