888 Profits Prove Online Gambling Still Rocks

Posted by Gambling News | Gambling News | Thursday 15 May 2014 5:02 pm

There is a race on for online gambling brands to win investor confidence prior to Point of Consumption (PoC) tax being introduced into the UK. To qualify our opening sentence perhaps it is necessary to understand a little more about what PoC tax means to UK online gambling operations. Fundamentally, Internet Gaming operators have been able to avoid British taxation for the past 15 years or so, since the industry first kicked off online.

This type of "legal" tax evasion has been enabled by the fact that offshore territories have welcomed the industry with open arms, and enticed them with far lower tax rates. The UK levies 15% on gambling activities, compared with Gibraltar which levies only 1% of relevant income. One percent as opposed to fifteen percent, makes a massive difference to any corporations bottom line.

The concern regarding PoC is from investors who are genuinely worried what it may entail for public companies. Companies such as 888 which are listed on the London Stock exchange. Already when fixed-odds terminal betting increased from 20% to 25%, we saw panic set in, where some online gambling stock prices plummeted. But because 888 have shown such good profits in the lead up to implementation of PoC, shareholder skittishness should not be of such great concern.

Currently this online gambling company is not the only concern in the industry that is concentrating efforts to win investor confidence, as well as new customers. However, 888 has reported a whopping 30% increase in pre-tax profits, as well as an increase of 7% in revenues for the same period in the last tax year. They have declared dividends, and paid out an additional “special” dividend, and this act in itself will shore up shareholder confidence.

Of course an online gambling concern does have to make money in order to dish it out to shareholders, and it seems that 888 have hit the jackpot in this regard. They have seen more interest from consumer of their bingo product, and virtually every internet gambling firm is seeing massive profit jumps in mobile sports betting.

The date set for implementation of PoC tax is December 2014, when if it gets off the ground on time, will be bound to cause some major regulatory upheaval. Essentially it means that an additional 15% in tax will be levied on any revenue generated from members situate in the UK. It pays to bear in mind that millions of British online gambling fans play at hundreds of offshore websites.

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