Delivering yesterday’s Budget, Chancellor Philip Hammond delivered a hammer blow to the British betting industry, confirming an increase from 15% to 21% on remote gaming duty (RGD).
Hammond argued that the RGD hike will be implemented to help cover the loss in tax revenue generated by fixed-odds betting terminals, but affiliates are worried that the trickle down effect will be seriously detrimental for the sector.
“With the remote gaming duty impacting major operators it’ll ultimately trickle down to the users and affiliates. Whether this is tighter purse-strings with CPA and commissions, or stricter rules for “qualifying affiliates” remains to be seen,” claimed Tipstrr Managing Director Damien Fearn, a startup that launched an affiliate program earlier this month.
“Ultimately though, it’ll be the end user that gets the worst of the deal. With margins tighter for operators you could see account closures and restrictions become even more aggressive as they look to balance the books for shareholders – to the detriment of their customers.”
However OLBG CEO Richard Moffat was a little more pragmatic in his Budget response: “Affiliates will need to wait and see what impact this has on them as it isn’t a given that operators will pass all of the increase on or whether this will be done immediately.
“One area significantly affecting the affiliate/operator relationship at the moment is the lack of transparency from most operators around the deductions they make between gross and net revenue which consequently affects the revenue paid to affiliates on revenue share deals.
“There is an opportunity here for operators to improve transparency by detailing the exact deductions which they pass on to affiliates. For some programmes the current deductions may well be more than enough to cover this rise already.
“We all know that affiliates have a significant impact on the growth of operators, driving large numbers of new players at a very low cost compared to other sources.
“Reducing the revenue of such important partners may not be the wisest move for operators fighting for market share in the UK. Perhaps there is an opportunity here for some operators to increase their share of affiliate business and steal a march on their competitors.”