Freeplays are a boon to the casino players. They are basically vouchers of free games offered by casinos on a selected range of casino games. For instance, you may get an opportunity to play free slots, table games and classic card games.
Yes, they even give you a chance to hit the jackpot and earn millions. The gaming operators offer various other kinds of promotions and incentives also to retain the existing customers and to entice the new ones.
Recently, it has been made known that the Treasury of the UK has declared to charge remote gaming duty (RGD) on all the remote gaming freeplays. It is an initiative to enhance the treatment of free bets and bring them in line with current general betting duty (GBD) regime. However, it is sure to put all the remote gambling operators under pressure to embrace the new freeplay taxation rules.
The new rules were already listed in the original Finance Bill 2017 but were dropped. From 1 August 2017, these rules are set to be enacted to offer a better betting experience to the customers. Since the proposal was earlier excluded from the cut down version, its implementation will not be delayed anymore now.
About Remote Gaming Duty (RGD)
The new freeplay taxation law is a part of Finance Bill No. 2 2017. The bill is going through the Parliament and the changes are expected to take effect for all the accounting periods starting from August 1. It will be applied to all the UK citizens who are going to participate in remote gaming. In addition to this, RGD is applicable over the radio, television, internet and on all the other electronic communications. This simply means that a player will not be exempted from the new law on any medium.
According to the new rules, all the customers betting on freeplays will witness a huge change. These freeplays will be considered while calculating the remote gaming profits of the operator. It would also mean that freeplays will no longer be treated as prizes given out by the operator. It will not be counted in the calculation of profits.
To add on, it is known that the new tax policy will directly affect around 130 operators. But will support in collecting more revenue. The estimated rise in revenue is almost around £45 million. This may further show a rise of approximately £110 million by the year 2020-2021.
While talking more about HMRC, it has brought about a major change with the development of this new tax policy. The change is regarding re-wagering, which is used by remote gambling operators. In remote gaming, freeplays are subject to re-wagering requirements. It’s unlike general betting where freeplays are used for a single time only. Remote gaming freeplays will allow the players to enjoy playing all through their winnings to a value or multiple that is already determined.
Repercussions of Freeplay Tax Policy
The UK government has concluded that freeplay taxation will prove to be a great burden on the operators.
Considering the same, it has been finalized that the revised tax will be applied only on the first use of freeplay. With this, the winnings will only be counted in the duty calculation after the re-wagering process has ended. This will lessen the burden on the businesses.
Furthermore, the government will ensure that there is no change made to existing policy of games that are free to play for all the players. In fact, the winnings or prizes from such free games have been excluded from the duty calculation. Therefore, it seems that the new freeplay tax policy is going to bring about a great change in the gambling industry.