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and I think they want this. The industry has good representatives in various interest groups, such as the RGA. They have access to the right people and will make a strong case. There isn’t a voice, though, speci?cally for smaller operators whose businesses and investment plans will be at risk if a ?at 15% rate is imposed. Mark Davies and I are setting up the High Growth E-Gaming Companies Forum to try to amplify the voice of the high-tech end of the business in this process. The formal consultation is starting within days and we have very little time. We’d love to hear from you if you have less than £10m annual turnover and an interest in this space. Please email charles@ probability.co.uk or Mark. Davies@cambertonuk. com
Charles Cohen is CEO of Probability, a mobile phone gambling business he cofounded in 2004 with John Scaife. It ?oated on the London Stock Exchange in August 2006 and the company continues to grow rapidly.
Walking blindfolded to the guillotine
> By Charles Cohen, > CEO, Probability
March’s Budget announcement of a “point of consumption” tax on offshore operators might not feel like a re-run of Black Friday but the implications for highgrowth and high-tech businesses in the sector will be just as dark. Yet I see much of the industry walking blindfolded to the guillotine. The problem is not GPT per se. If you have to tax gambling at source, GPT is the best way to do it. Tax the take, not the turnover. It’s like VAT, although the operator pays it rather than the customer. And that’s the problem with it. One reason why there are so few independent bookies is that GPT favours larger operators. You need serious economies of scale to give you enough margin to be able to absorb the impact of giving Her Majesty 15p of every £1 your customer loses. Egaming could easily go the same way if this reform goes through without any allowances or variations for smaller companies and those with a high R&D requirement relative to their income. This industry is going through an extraordinary wave of change brought about by new technology. The way in which marketing, CRM and support are delivered are being reshaped by social media. Nothing will be the same in ?ve years. My feeling, from having had meetings with officials and politicians, is that they are open to a positive discussion about how this reform can be made to work for smaller companies and those investing in the new technologies. It’s not in their interest to collapse the market to a few big players, to create a monster black market, raise no revenue, and deliver us another Full Tilt. There is also, at all levels in government, a lack of understanding of the different situations and economics of egaming businesses. Not their fault, this, but ours. I have been asked by several MPs and officials why we can’t just pass on the cost to customers by changing the odds on our roulette or slots. We need to educate –
“As you delve past the obvious things neither Black Friday nor Tilt’s demise happened in a vacuum”
Bill Rini on how last year’s events ?t into the wider US picture
turn to page 36
Chad Elie
Utah-based processor who
was alleged to have stolen US$4m from PokerStars in a separate, sinceresolved case. Elie changed his legal team earlier this year and changed his plea to guilty in late March. Pre-trial hearing adjourned.
John Campos
Former partowner, SunFirst Bank, and was
introduced to the poker companies by Elie. Reached a deal in March whereby he pleaded guilty to a single misdemeanour charge, approved by Judge Lewis Kaplan in April.
Ryan Lang
The last of the indictees to plead guilty
before Chad Elie’s plea was changed. Canadian citizen later publicly apologised after admitting to tricking banks into processing online poker transactions.
Bradley Franzen
Resident of Illinois and Costa Rica. Initially
pleaded not guilty in April 2011, before reverting to a guilty plea one month later, agreeing to cooperate with the authorities.
Ira Rubin
Costa Rica resident, arrested
in Guatemala last April and was refused bail. Pleaded guilty to three counts this January. Previously sentenced to four years in prison on a seperate conviction of fraud.
Daniel Tzvetkoff
Australian payment processor whose
Intabill firm dealt with indicted processors and poker firms. Arrested in 2010 but not indicted, and believed to be in witness protection in New York
Jeremy Johnson
Utah-based processor with
ties to Elie, but not indicted. Accused of ‘hiding’ US$51.4m in poker-related funds by moving them between various holding companies. Elie accused him of 'stashing' gold, cash and silver
www.egrmagazine.com
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