blonde poker forum

Ut oh...

http://www.guardian.co.uk/uk/2011/jul/10/online-gambling-licences-full-tilt-poker

TBF, something has to be done. (The same for online bookies IMO)

Having said that, I wouldn't be surprised if it would be something half arsed.

This has all came about because of the US Government.

Fuck America.

I really don't think anyone has anything to worry about.  Regulation doesn't equal prohibition.  Chances are they will simply want to ensure that anyone offering services to UK punters passes some kind of probity test which is no bad thing.

Surely the one thing we all fear would come about because of this? Taxation.

Or do you think we're a long way from that?

It is pretty much impossible to tax unless you change the whole regulation framework of gambling in this country which they have already rehashed twice in the last ten years and even if they did manage to tax in some way it is massively unlikely the firms would be able to pass it on to the punters.

What's the problem? Don't see anything in there to worry about

the "problem" is that something which requires a simple solution wont get one

govt's dont miss an opportunity to get there pound of flesh

they will tax the sites, they will pass it on

I just don't see how this can happen tbh.  The companies don't have any need to have any presence here and the only veto that they UK govt have is on advertising in this country and the way they get around that is to give "white list" status to approved jurisdictions but they know that in all reality they have no veto in this day and age.  I worked for Victor Chandler when we were the first sportsbook to go offshore and basically stop paying tax and spent literally days with barristers and lawyers going over the reprecussions and basically the advice we had then was that we were totally able to avoid British taxation but the only potential issue was advertising and even then electronic advertising didn't fall under the remit.  That si why the Uk established the white list in the first place because they were pretty much unable to control any other way and at least through that they could impose their regulatory standards on other jurisdictins that saw the UK as a decent marketplace therefore protecting the UK consumer.

You are correct in all this, but since the whitelist etc, France for one has managed to get a law past the EU authorities that allows them to take action against companies that don't have a French license.  All the horse owning fraternity are moaning about the dire prize money in the uk and looking across the channel where the French are fleecing the punters to pay for much higher prize money.
 
So I think that the change is going to be "must have a uk license to market service to uk customers" and how they define "market" presumably depends on the reaction of the big bookies.

Also this review has been going on for a while - the FTP thing im sure just means the Grauniad asked the govt about it and got the "we are looking into it response".

 

The govt wont change the taxation of gambling for the punter as more lose than win - so there is more losers than winners so no point taxing winners as more people would come foward as losers and make it a net losing position for the inland revenue.

The majority of the stuff coming from the Culture secretaries office has been much more about not letting operators not on the UK white list to advertise in this country without paying a premium, not much about actually taxing punters or existing white listed operators. It will probably come up too, I think ultimately that's the way this is headed, but right now its much more about regulating overseas operators and the advertising.

"It is pretty much impossible to tax unless you change the whole regulation framework of gambling in this country which they have already rehashed twice in the last ten years and even if they did manage to tax in some way it is massively unlikely the firms would be able to pass it on to the punters."

The UK firms already get taxed via betting duty and they don't pass it on.

"The govt wont change the taxation of gambling for the punter as more lose than win - so there is more losers than winners so no point taxing winners as more people would come foward as losers and make it a net losing position for the inland revenue."

Correct - that is why at present betting duty effectively taxes punters' losses.  The Revenue know which way round they want to be.

Not sure I quite understand this. Companies not on the white list can't advertise in the UK, that's the whole point of the white list isn't it? Or have I misunderstood what you're trying to say.

Personally I think as someone noted above the main impetus for this was France and Italy making the UK look a bit daft and outdated in their approach to regulation. Nobody of any significance has even applied for a UK licence. Why bother when it gives you no advantage? So of course they are miising out on a load of lovely tax revenue. Mmmmm tax.

Never really understood why people think this precludes them from taxing winners.  The US IRS manage to do it very effectively.

Sorry I was a bit sleepy eyed this morning I, I wrote advertise when I meant operate. My understanding is that they want to charge operators not on the white list, possibly through the payment processors, for having UK custom. They also want to have a hand in regulating those currently on the white list, as they currently allow them to advertise while having no influence on how they are regulated.

This was all pre black friday, however, I can only assume that their line will be much tougher now.

Is the tax in UK prohibitively high for the online poker rooms to operate from here?  Bit of a missed opportunity for the government and the country if that's the case.  Should be trying to get them to base themselves in the UK and generate some revenue for the public coffers.

"The US IRS manage to do it very effectively."

The IRS are almost exclusively interested in generating revenue, sometimes to the expense of industry.  The Revenue take a longer term view and don't generally want to tax industries out of existence.  If they tax the losses (gambling duty) AND tax the wins (income tax) then it gets to a point where the turnover lost from the industry will outweight the tax collected.  I sometimes wonder if the US have ever heard of the Laffer Curve.

This is before we get into the administrative nightmare of tax relief for punters losses.  Can you carry forward/back to other years?  How do you prove your losses.  How do you account for "live" wins/losses which are not subject to a digital record.

It's an almighty can of worms, and the Revenue won't touch it imo.  
 
 
 

Sorry I was a bit sleepy eyed this morning I, I wrote advertise when I meant operate. My understanding is that they want to charge operators not on the white list, possibly through the payment processors, for having UK custom. They also want to have a hand in regulating those currently on the white list, as they currently allow them to advertise while having no influence on how they are regulated.

This was all pre black friday, however, I can only assume that their line will be much tougher now.
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They already have a hand in the regulation in that they don't allow juridictions onto the white list unless they meet their criteria.  I was involved in the process of getting Antigua onto the white list and it isn't an easy process.  Operators don't get onto the white list - that is for jurisdictions only afaik.

This.

Unless poker is perhaps seperated from every other form of gambling and there is an effective way of tracking player wins. They could have it by the end of the year if you have cumulatively made a profit of over 15k online over all the sites they govern for your profile for  the year you owe a certain amount. No chance really to tax live winnings. Even with the formula I suggest would be tough to monitor and again if you lose the second year could reclaim losses?

Ha - just checked on the IRS site and they don't allow carry forward of gambling losses.

So you could absolutely do your pods on roulette one year and lose 100k, but then if you happen to have a good night the following year and claw back 10k the IRS want a piece of the action!

Why does any American citizen gamble?  You have the beat the house edge, and give up a load to the taxman.  Unbelievable.

Short answer yes. It's not that's it's 'prohibitively high' it's just that compared with the near zero tax rates offshore it's just a non starter. Even Ladbrokes has been moving operations offshore to save money.

Just to add to this, France and Italy on the other hand said if you don't base some operations here and pay tax to us directly then you can't have an official site. That said we're already seeing in France that some people are just not bothering with a .fr site and taking french punters on a dot com site. And the tax rate there is so daft that nobody is making any money so let's hope they don't follow that model.

It just comes down to the definitions in their tax laws.  In the uk, income tax is only due on earnings from a trade profession or vocation and legal cases have defined that card playing is not covered.  To tax gambling as income a completely new type of tax would have to be created.  

Also when wondering why Americans gamble, you should remember that in uk casinos the rake is subject to betting duty at up to 50%, if that happened online it would be gg winning.

 

It doesn't really work that way in the States.  You are only ever going to have your details collected by the IRS if you win over a certain amount (normally $500 for a poker tourney, $10k cash winnings/chip redemption) and even then you can offset losses but you have to be able to present some kind of proof of your losses.  My local office will accept a hand written journal recording wins and losses and casino ATM receipts as proof of losses.  I also know of a few people that go to the local racetrack and pick up a load of losing racing tickets around tax time.  It does rely massively on you being honest. Obviously if you have a massive bink then you are looking at some level of payment but I have never really understood why professional gamblers think they should be exempt from contributing to society by paying taxes anyway.  The Uk is the only country that does it this way as far as I can see.

Very much this.

"I also know of a few people that go to the local racetrack and pick up a load of losing racing tickets around tax time.  It does rely massively on you being honest."

Now you are alluding that whilst IRS collects tax, it doesn't do it effectively.  This is the reason why HMRC doesn't bother to pursue this angle I'd imagine.

But agree with you that pro gamblers should pay tax.  However, administrating this is very difficult.

My guess would be that the number of people that overpay is at least equal to those that get away with things like this.  I only really know poker players and sport bettors that do this for a living but I doubt that some old lady that has a big win on the slots bothers to get any evidence of her losses when she maybe puts $20 once a week.  As in almost all industries it is the little people and uneducated that get screwed.  The States very much revolves around money.  The crack dealers are more scared of the IRS than the police!!!!

People often say this, but reintroducing 'betting tax' for sports punters and introducing, for example, a withdrawl 'tax' for poker and even casino players would be pretty simple to do.

It wouldn't be the same as income tax, obviously, but it would be something.

And obviously you could give punters the option of paying a 'tax' on deposits or withdrawls in the same way as the old betting tax used to work.

but then you are taxing everybody.  So the net effect is losses, not taxable gains.

I don't think someone who works and gets taxed at 50% should then be taxed again if he goes to the casino/racecourse and has a good night.  You'll kill the industry.

However, if someone earns their living by scalping betfair markets or playing online poker full time,  then they should be taxed imo.

Problem is - how do you tell?

In fact why are we even lobbying for more tax.  It just gets p*ssed up the walls by politicians on vanity projects and the usual imbeciles that inhabit the local councils.

Dont think you guys are getting the point - the courts have decided that gambling winnings do not fall into the defined categories of taxable income.  So saying that you can't understand is (admittedly exaggeration) like asking why murder is a crime. 

If the govt wished to individually tax winning gamblers, they would have to create an entirely new form of tax.  So this would mean drafting legislation, getting parliamentary time, setting up admin systems and ongoing admin.  All for an unreliable and unquantifiable income stream.

At the risk of getting dragged into a discussion I've had far too many times....

As I said you could, reasonably easily, reintroduce the betting tax that existed in the UK for many years. Remember paying tax on either your initial bet or your winnings? I do and I'm not even that old.

It's NOT the same as making gamblers pay income tax, but it is a way of making them contribute in some way.

It was abolished because the goverment didn't want everyone moving offshore and losing jobs and revenue that way. Ironically some of the firms that wanted it replaced are now moving offshore anyway.

Aren't you talking at crossed purposes here?

But why do you want to tax the casual punter?  Don't we think there enough tax out there?  Income tax, CGT, Corporation Tax, VAT, cigarette/alcohol levies, council tax etc etc etc etc

It is a myth that punters aren't taxed anyway.  They simply changed the burden of the taxation for bookmakers from it being a tax on turnover to being one on gross profits which was what the firms wanted.  In terms of actual revenue it is pretty much the same but allows the firms to compete internationally (although there is very much a move towards firms basing more and more overseas).  Pretty much the only reason that oevrrounds haven't increased substantially is that bookmakers/gaming firms have seen the breadth of their business increase and move away from the traditional racing, football etc to fixed odds betting terminals, poker, online casinos etc etc

Very much not this. Struggle to beat the rake.

Slightly, but my point is that there is no such thing a professional gambler where uk law is concerned so the question of whether they should contribute to society is irrelevant.

I don't think the Govt will ever tax poker winnings, or indeed any other form of gambling, at least not from the punters.
When the betting tax was abolished the betting firms turnover increased threefold, almost overnight. The Govt were making far more in tax on the profits than they ever were before.
Abolishing the duty made it far easier for casual punters to have a bet. It also opened up the 'odds on' markets. With the duty it was always a losing bet, even if you won. Now people can make a profit from odds on betting. These of course are bookies cash cows as the don't lose much when they come in and we all know how mug punters chase favs blind.
However, the online markets have changed a lot of this. In the current climate i can see the Govt saying to these companies you can only operate in our shores if you pay as a bigger % of your profits. This will be passed on to players via higher rake.

There are far too many losers for the Govt to tax gamblers as a whole

that's OK, we were talking about winning players. If you're struggling to beat the rake you're not a winning player (unless rakeback means you are profitable, in which case you should pay tax..assuming you make more than your tax-free allowance)

If the Government tried to tax individual punters for online poker winnings, would it have to be recognised as a skill game for that to happen? Surely you can't tax people on a game of chance?

Do agree with a lot of posts in here, particularly from the likes of vegaslover.

There have been no Cabinet level discussions regarding taxing poker winnings since the new Govt came into operation. This from, ahem, a senior govt source about a month ago.

Don't really understand your logic here.  Most countries tax lottery winners for example.

Isn't that because the state is in charge of the lottery?

I was talking purely theoretically. In the sense that it is possible. But yeah I think it's very unlikely.

It's interesting though that when the US government talked about raising $x gazillion dollars in tax revenue, when you looked at the study most of that was from the players paying taxes.

Did you hack his phone?  You don't work for News Int. do you ?

;)

 :D Nah, just met him and asked him. Taat's the old fashioned way to get information.  ;tk;

Wouldn't it be easier for them (if indeed they go down this route) to reclassify gambling as a tax assessable form of income?

"reclassify" - when did they classify and unclassify? /nit

They have to create a new tax schedule that has to go through parliament, they can't just decide to do it.

Isn't that because the state is in charge of the lottery?
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Not really.  By way of another example bingo winnings, roulette winnings and slot wins are taxed in most countries over a certain level.  None are games of skill although claw might want to argue that point.

Could tax under schedule D quite easily, though their clear problem would be quantifying profit loss and what losses could be utilised.

Schedule D (tax on trading income, income from professions and vocations, interest, overseas income and casual income)

very much this! gambling for a living is an incredibly unreliable source of employment for 85% of full-timers. Pay tax on huge wins, forget the rest imo. A full-timer can go broke very easily (even many times), with no gauranteed income. Sod tax.

errr that is exactly the schedule that the courts ruled does not cover the earnings of a winning gambler.  They stated that a winning gambler was not in a trade profession or vocation.

Judges aren't stupid when considering these decisions.  You just need to compare a bookmakers strategy in a horserace to a punters (ignoring "cheating strategies").  The bookmaker will offer short odds and try to minimise liabilities and will always be able to prove that there is a mathematical edge, the punter will only be able to say I think this horse is overpriced. 

The "winning" punter only becomes apparent after a long period of success and his success could still be variance.  Even if a bookmaker loses on a day or longer, his strategy should still be mathematically sound.  The bookmaker is obviously carrying out a trade and will be able to apply his method to every race, the winning gambler can't prove they have a strategy that will consistently lead to profits and can only bet when he thinks the odds are (unprovably) in their favour. 

Poker has plenty of variance and winning players have either been lucky or have played consistently against inferior players.  The internet has increased the opportunity to find inferior players, but finding them is becoming harder and no one has a strategy that is profitable and inexploitable.  So there isn't much difference between the pokerplayer and the horse punter. 

Rightttt ok then.

I will be alrite

"Schedule D (tax on trading income, income from professions and vocations, interest, overseas income and casual income)"

I think there is case law on this which have set precedents which means they can't?  They'd have to put through a completely new tax to do it.

You might want to check some of the tax commissioners decisions (Not the Courts btw). It can also be possible for a card player to be taxed on winnings from one of those decisions, if they also play in an event they organise. Most of the tax decisions were made decades ago and it could be possible for the Government to look into taxing winnings, without giving relief for losses to the small scale players with professional players taxed as a vocation or trade. The steer from HMRC recently has been to concentrate less on Large Corporations and aim at small/ medium sized businesses.

Whether anything will come of it or not is moot. Personally  I think its a long way away, but not impossible.

Irrespective of whether people think its fair or not there are just so few professional players in the UK that sodding about making legislative change so that they can come and get us would probably be way more trouble than its worth

Strictly online players I guess you can argue against but the live guys ship some to the IR, it just goes down the slot on its way there

This is what I was getting at, announced yesterday, plans for an offshore betting tax

http://www.telegraph.co.uk/sport/horseracing/8636182/Government-to-announce-new-offshore-betting-tax.html

Seems only fair IMO.

Not really, tax might be an obviously intended side effect, but it hasn't been mentioned by the govt other than

  At the same time, it is unfair to GB-licensed gambling operators that overseas competitors benefit from access to the market in Great Britain without bearing a fair share of the costs of regulation, or of research, education and treatment of problem gambling.


http://www.culture.gov.uk/news/ministers_speeches/8293.aspx

Could be worse IMO:

http://www.egrmagazine.com/news/1679057/government-announces-uk-gambling-reform-plans.thtml?utm_source=daily-snapshot&utm_medium=newsletter&utm_campaign=daily-snapshot

In fact sounds quite good for consumer protection.

And according to some it will be late 2012 at the earliest before this comes to pass. More than enough time for anyone to get a licence application in and approved.