Arbusers analysis on the new UK gambling tax

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Arbusers
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Arbusers analysis on the new UK gambling tax
« on: October 30, 2014, 11:59:44 AM »

Before anything else, it is important to mention that the vast majority of gambling operators already obtained a UK gambling license. This includes all well-known bookmakers of the UK. Our UK arbers will NOT lose these sources of income.
Another important fact is that the new gambling tax is aiming at the profits of the gambling operators and not the profits of the player.
The initial conclusion arising from these 2 facts is that the UK government has no intention to slaughter the gambling market the same way like Greece, France, Germany and other European governments ignorantly did. Consider your selves lucky UK arbers.
The number of bookmakers who will seize activities must be close to 0, because a 15% tax is not a fatal figure.
Now let’s go the mathematical part of our analysis. This 15% tax will be absorbed by the gambling operators predominantly but I believe that part of it will be rolled over to the clients. The tax goes to the gross profit of every operator and that means that every bookmaker will have to decide to which markets the tax will be rolled over. For example, a bookmaker looking to maintain a good momentum in the sports betting market might decide to roll these costs to the casino players. At the same time, a bookmaker wishing to maintain a good traffic in casinos, might decide to roll the costs to the sports betting clients.
I expect that all bookmakers will monitor closely the behavior of their competitors and the will of their own clients to accept bigger margins. So far, I have no information or indication that UK gambling operators made an under the table deal to absorb or roll over to the players an already designated percentage of the costs. The next 2-3 months will be a period of spying and testing.
Another difficult parameter in the equitation is that most bookmakers are not willing to offer dual lines to their international and UK clients and that means that part of the cost will be moved to international clients too. However, this is just a speculation right now and we have to see which bookmakers will seal the UK market from the rest of the planet. I doubt this will happen.
What is the result of all these? The result is that margins will grow slightly. If you see a 91-91 market right now, you might see it degrading to a 90-90 market in the near future. Having said that, I believe that arbitrage will be a little more difficult after November 1st (unless we see another appeal). We ve seen this phenomenon before, when bwin decided to stay in France offering higher margins to the rest of their clients.
What about the base books?
Betfair is there as strong as ever. This new law is betfair’s best dream, bringing more volumes to its markets.
Pinnacle, SBObet and the rest of the Asian bookmakers had no alternative. If they would get a UK license, the 98-98 lines might end up to 97.5-97.5 and as you all know this difference is fatal and enough to send volumes to those competitors who didn’t get the license.

This is a nice chance to thank you all guys for contributing to the ongoing discussion about the new point of consumption tax in the uk, here: http://arbusers.com/index.php/topic,2372.0.html
« Last Edit: October 30, 2014, 12:06:13 PM by Arbusers » Logged
Arbusers
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Re: Arbusers analysis on the new UK gambling tax
« Reply #1 on: October 30, 2014, 03:21:48 PM »

It worts waiting till Friday night.
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Arbusers
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Re: Arbusers analysis on the new UK gambling tax
« Reply #2 on: October 30, 2014, 04:25:25 PM »

I forgot to mention in my previous text, that affilaites will pay very high cost from this new tax, because it will be the easiest target for bookmakers. In fact, in many cases they could take all the burdain on their own.
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doubledavis
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Re: Arbusers analysis on the new UK gambling tax
« Reply #3 on: October 30, 2014, 04:27:12 PM »

Since when do the Asians offer 98-98 lines? At best if the juice is equal on the very top markets it's 96-96.
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yorkjoss
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Re: Arbusers analysis on the new UK gambling tax
« Reply #4 on: October 30, 2014, 04:46:28 PM »

I forgot to mention in my previous text, that affilaites will pay very high cost from this new tax, because it will be the easiest target for bookmakers. In fact, in many cases they could take all the burdain on their own.

are you sure about this? it's a bold statement, bookmakers do not wish to bite the hand that feeds them, in my opinion UK bookmakers will run a tighter run ship as they have been doing these past months and years, their extra costs will be recouped
from every possible source and evenly about their business, the poc tax is only the second worst thing to happen
to them this year, the higher levy on FOBT's in uk has cost them milions, they all had it so good in the UK, those days have now ended, their jobs now will be to maintain their profits as much as possible to keep their shareholders happy, this can
only be a negative for us, how much of a negative time will tell, I have a feeling the impact will not be too severe, in the end
they have to stay competitive, arbing was getting so much tougher any way, this new tax I believe will change little as regards
to what was already happening.

another thing, some uk bookmakers, not many never moved to Gibraltar or Malta or similar and remained in the Uk, these
bookmakers are little affected by this new tax as they were already paying uk tax, these bookmakers like skybet and bet365
have not changed at all, this tax will not affect them, ladbrokes and willhill didn't even bother signing up to the recent appeal,
there has been a lot of scaremongering on here recently, we arbers always find a way....somehow
« Last Edit: October 30, 2014, 05:02:48 PM by yorkjoss » Logged
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